Self-checkout for everybody? Amazon bets on future of groceries
In 2008, a man named David Humble thought he changed grocery buying forever. He introduced the very first self-checkout machine. It was a temperamental device, prone to frequent errors and crashes. The technology has improved, but it has remained little more than a peripheral attraction. Very anti-social people can avoid even the rudimentary small talk that comes along with buying bread, eggs, and milk by scanning and bagging their own groceries using an upgraded version of Humble’s machine, but most transactions are still processed by dedicated human clerks.
Automated checkout hasn’t created quite a splash in the real world, but it works smoothly every day in the digital one. Every transaction that occurs on sites like Amazon uses self-checkout. Users select the items they want and input their financial information while the grabbing of products off shelves is handled remotely by a small army of warehouse workers. That’s the model the grocery store machines sought, but never quite arrived at.
That’s why Amazon’s foray into the grocery business is interesting. They announced plans for an 1,800-foot grocery store in Seattle, set to open in early 2017. The store promises complete automation on the payment side: no lines, no waiting. Customers use their smartphones to identify themselves and their purchases, and the whole transaction is billed through Amazon’s app. Customers just take what they need and go.
Futurists and efficiency lovers may be excited about this change, but consumers have been sluggish to embrace digital grocery shopping. Amazon’s grocery segment, Amazon Fresh, represents less than 1% of the total market in groceries. Digital grocery shopping comprises only about 4% of grocery buying generally. While Amazon hopes that the addition of a physical store to its offerings will bolster sales, there’s reason to be skeptical.
Earlier this year, HSBC completed a wide-reaching analysis of the grocery industry, and found little reason for excitement for digital grocery delivery. The report cites much faster growth of discount and bulk grocery outlets compared with their online counterparts. People value low cost more than they do online delivery.
We’re not far removed from the madness of Black Friday, which is a clear reminder of the willingness of people to stand in lines to save money. If there’s any kind of price difference between online and traditional grocery delivery, people will continue to choose offline delivery options. Perhaps it is the result of consumers undervaluing their time, but people are willing to wait for savings.
This may be the point Amazon and Humble both missed. Standing in line at a grocery store just isn’t that much of a hassle. For many people, this may be a rare break from the demands of their world. The grocery store checkout line is a solitary bastion of quiet contemplation in a noisy, hectic world. Consumers are unwilling to surrender the ritual attached to buying their groceries the good old fashioned 20th century way.