The concept is very interesting. You walk in, get your groceries, pay, and walk out. No lines, no cashiers; nothing to waste your time needlessly. That’s what Amazon proposed to Londoners with its Amazon Go store at the Dalston in North London.
Even though this experience is as close as it gets to a real-world Amazon, the store is closing its doors after just two years of its grand inauguration. Was it a bad business idea, a conjuncture issue, or simply an experiment?
Many Factors Converge
According to an Amazon spokesperson, the closure of the Dalston store is simply a revision of their business model. In other words, Amazon won’t give a specific reason for the decision, but it’s a given that the business didn’t work as intended.
One of the reasons might have been the context. Opening a high-street store during the pandemic isn’t the best timing, even though Amazon’s concept was perfectly suited for such a scenario because it’s as contactless as it can get.
However, high-street pedestrian traffic has been low throughout the last few years, and it’s only now that’s picking up. That might’ve been one of the reasons behind Amazon Fresh’s failure in London.
Another issue is whether Amazon’s JWO (Just Walk Out) technology is partly to blame. For you to shop hassle-free, some heavy monitoring is taking place. JWO is based on AI, sensors, and image recognition.
There are sensors and cameras everywhere in the store, and you need to identify yourself with your mobile phone before entering. Every activity is tracked, giving Amazon a massive data trove to collect. Online and personal data privacy is a sore topic nowadays, which is very likely one of the reasons why this store didn’t succeed.
Another issue is a growing concern about mega corporations like Amazon monopolizing everything, while smaller businesses get destroyed in the process.
Finally, some people like other people. Having humans at the stores greeting you and making small talk is one of the perks of shopping in the real world rather than simply buying online. It also gives people jobs. It remains to be seen whether convenience can offset basic human interaction.
Amazon Go not Dead
Even though there are several potential reasons why Amazon might have shut down its London store, they’re still committed to this business model. Amazon Fresh has a strong presence in the USA and two Amazon Fresh stores are coming up in the Greater London area.
Perhaps different locations will make the difference this time, as a different economic situation most likely will. However, some important issues still remain. In a world in constant change, some things are doomed to fail, but valuable lessons are learned in the process.
Amazon experimenting with its model in real-life retail is just one of the innovations coming. After the pandemic, many are willing to try new models and make their businesses more able to withstand events such as those. Only time will tell which ones are a good idea.