What does Amazon’s move into bricks and mortar mean for UK retail?

Amazon Go

Amazon Go

Following the news earlier this month that Amazon has launched its first ‘brick and mortar shop in the UK in Ealing, West London – what does it mean for the future of retail in the UK? Business Leader investigates.

The Amazon Go stores may be a physical store but there is no need for any actual physical contact – as the shops are contactless and cashierless.

Amazon have already seen success in their physical stores in the USA, and hope to replicate it in Europe. There are reports that the global firm will look to create 30 stores across the UK – should this initial venture be a success. Amazon uses its innovative ‘Just Walk Out’ technology to track what a customer purchases before leaving the premises.

When a customer enters the store, they must scan the Amazon Go app on the gated turnstile before entry. Following this, customers are monitored by cameras. Weight sensors on the shelves help Amazon determine exactly what people are purchasing – and those items are then added to a virtual shopping cart. Shoppers then automatically pay when they walk out of the shop, through the bank card a user has associated with their Amazon account.

What do Brits really think?

Amazon opened its first physical store in London this month, bringing the fully-automated ‘Just Walk Out’ shopping experience to British consumers.

Piplsay, a global consumer research platform, surveyed 6,005 Britons to find out their excitement about the tech-heavy retail concept.

  • 17% of Britons have visited an Amazon Store before (9% in London); 86% were happy with their shopping experience
  • 54% of Britons think Amazon Fresh will be a threat to top grocers like Tesco and Morrisons
  • 39% of Britons say they prefer less tech-heavy retail stores or online shopping over Amazon Fresh-like stores

Could the pandemic have helped this shift towards tech-inspired bricks and mortar?

The opening of the first Amazon Go cashierless grocery store in the UK is perfectly timed to reduce physical contact during the pandemic, says ParcelHero’s Head of Consumer Research, David Jinks MILT.

Amazon decision to introduce till-free stores wasn’t due to the pandemic. In fact, it has been trialling the technology since 2016 and opened its first Go store to the public in the US in 2018. However, the impact of Covid created the impetus for the company to open its first contactless store outside the US.

Shopping at Amazon Go stores looks set to become one of the safest shopping options outside of having groceries delivered direct to your home. The first step is to download the Amazon Go App, which is now available on Apple and Android for UK users.

Once at the store, shoppers hold their phone screen to a scanner at the gate to open it. Anything they take from the shelf is automatically added to the virtual cart. When they have finished shopping, they are good to go – there are no queues, machines or checkouts. Providing shoppers keep their distance from each other, there is no need for any physical contact in the store.”

New Amazon store just the tip of the iceberg

The opening of the new Amazon store in London is just the tip of the iceberg, say tax and advisory firm Blick Rothenberg. Daniel Burke, a partner at the firm spoke to Business Leader about what it means for the future of retail in the UK.

Amazon clearly have a plan and we will see more and more of these stores opening up around the country over the next few months.

Amazon are one jump ahead again in introducing artificial intelligence to retail shopping. They know who their customers are, where they live and what they like to buy. This will enable them to plan where the next shops should be and what those shops will stock in the future.

Initial reports suggest that people have found the shopping experience scary, but it is only a matter of time before this becomes more of a norm. Shoppers want convenience and a quick and cashless experience like this fits the bill for many.”

This is another challenge for the major supermarkets who have been improving their technology over the past few years, but they still require goods to be scanned in and store personnel to deal with payment.

Although this move into bricks and mortar retail by Amazon could assist the traditional high street by developing a new shopping experience that consumers should embrace over time; It may also mean the retail experience of the future will employ fewer people.