The Risks and Rewards of Amazon Go Technology for Clothing Retailers

Jeff Bezos continues to disrupt the retail industry with the introduction of Amazon Go, a digital shopping platform that meshes online shopping with in-store purchases. This technology was recently unleashed on the grocery industry, creating stores without checkout lines. The fashion industry will likely be one of the first non-grocery sectors to adopt the Amazon Go retail experience, making it vital to understand the risks and rewards of the technology for clothing boutiques and retailers.

Rewards

Reduce Spending on Closing Sales

The amount of money that retailers spend on closing sales may be significantly reduced through the implementation of self-guided, mobile checkout. In addition to reducing the amount of resources invested into training, monitoring and compensating personnel, customers who pay through online apps don't have to deal with long lines, especially during busy periods such as the Christmas holidays. Anyone who's worked in a retail shop knows that long lines lead to lost purchases, as people go elsewhere rather than wait in a 10-minute line.

Accurate Recommendations and Sales Promotions

Online checkout systems based on Amazon Go may access centralized databases which utilize algorithms that make superb recommendations based on location, preferences and sales strategy. Dozens of datapoints may be used to target ideal customers for sales promotions, recommending other items similar customers bought or upselling directly through the buyer's mobile platform.

Connecting Customers With Experts

Customers often look to experts to guide their purchasing decisions, which can make or break a sale depending on the content and quality of the advice provided. Mobile checkout platforms can rapidly connect shoppers with experts on a wide variety of products, gently nudging customers closer to a sale.

Content provided may be in the form of an article or a video that reviews the details of the product or service. For high-end or high-profile shoppers, you may arrange an online chat with someone who personally guides customers through their purchasing decision, adding value to the shopping process.

 

Risks

Depersonalization of Shopping Experience

In terms of sales processes, one of the biggest risks that clothing boutiques face with Amazon Go tech revolves around the depersonalization of shopping, which reduces the effectiveness of your sales team. Big data analysis and communication across digital platforms helps to move customers through the new buyer's journey, but shouldn't result in the sacrifice of warm, genuine, human interaction.

Instead, digital platforms should seamlessly transition online communication to human discourse, with live representatives ready to interact through online chat, phone discussion or an in-person meeting. Digital touchpoints should work to bridge the gap between online and human-driven marketing.

Inventory Shrinkage

Technologies such as Amazon Go promise to reduce the cost of processing the purchases of converted customers, but also carries the risk of increased inventory shrinkage. Some shoplifters will be emboldened by the lack of a human presence, using this new shopping technology as an excuse if they get caught. Others will genuinely make mistakes while using the technology, accidentally walking out of the store without paying for your product.

Scalability and Cost

The cost of implementing Amazon Go-style technology for fashion retailers will vary according to the requirements of each business environment. Boutiques that specialize in small volumes or specific types of inventory will experience fewer problems with implementation due to the reduced size and complexity of the data involved. Large retailers with considerable inventory who profit from high sales volume must spend more time and money converting their assets, revealing increased cost due to issues with scalability.

Clothing retailers interested in this self-checkout technology need to consider the impact on their own bottom line before rushing to implement this innovation. Trends that work well for some types of business don't always translate to other sectors and industries. Plan new technological integrations carefully to minimize risk and maximize rewards.

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