Building brand loyalty: the real reason why Amazon has opened physical stores

Whilst Amazon has been dabbling in physical retail since 2015, it’s Amazon Go Grocery is their first ‘Just Walk Out’ shopping experience – an environment where you basically go in, take what you want, and walk out.

Amazon Go Grocery stores sell everything you will find in any decent local grocery outlet, from fresh produce and meat to bakery items and household essentials.

On entering an Amazon Go store, you open the app on your phone and hold the screen to the gate’s scanner. The ‘Just Walk Out’ technology automatically detects each item you take from a shelf and tracks it within a virtual shopping basket, charging your Amazon account as you exit the store.

The checkout-free shopping experience is made possible by the same type of technology used in self-driving cars, including computer vision, sensor fusion and deep learning.

Physical retail is another way for Amazon to reach a customer in order to test what resonates with them. The technology not only remembers what has been bought but also what has been picked up and put back on a shelf.

Amazon uses its ‘Go’ stores to also promote its ‘Prime loyalty programme’, tapping into the simple marketing ethos that if you ‘get shoppers hooked they’ll be customers for life’.

Whilst Amazon’s online customers tend to go to a website knowing what they intend to buy, customers visiting their physical stores are more likely to make impulse purchases. Even if they had gone into the store to buy a specific item.

The result: Amazon learns more about that serendipity from its stores, and in doing so, can transfer its findings to increase the likelihood of impulse buying becoming a sales feature online.

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