Op-Ed: Pandemic is Spurring Airport Innovation, Amazon is Poised to Benefit
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In this instalment of Expert Opinions, APEX Media’s Op-Ed series, Ramon Lo, former publisher at Airport Experience News, dives into the pandemic behaviors that travelers have adopted for the long-term. A company like Amazon, he believes, is well-positioned to dominate in this new era. Lo is currently director of Marketing at insurance and risk management company Century Risk Advisors.
Amazon: I bet nine times out of ten people don’t think of the rainforest, but of the online juggernaut founded by Jeff Bezos who, as of this writing, recently announced he is stepping down as CEO.
Approximately three years ago, Amazon launched Amazon Go. It’s essentially a convenience store, but with no need for an interaction between customer and cashier. Using an app linked to an Amazon Prime account to access the store, visitors walk in, grab what they want and walk out. Payment happens automatically. It’s that easy.
The company investigated entering the airport market, but radio silence followed. Then last year, Amazon released its Just Walk Out technology, allowing retailers to mimic the frictionless experience of its original Go store. In December 2020, New York City-based OTG opened the first airport store to feature the technology. This month, travel retailer Hudson opened its Hudson Nonstop store at Dallas Love Field, and hopes to expand across other US airports in the future.
While some have seen COVID as a change agent, I align with those who see it as an accelerant. Contactless, autonomous and self-service experiences have been in airport development queues for a long time, they just needed a shot of adrenaline to get things going. That adrenaline shot, unfortunately, was COVID.
So, why would it be a smart move for more airports to deploy Amazon’s Just Walk Out technology? Firstly, the curved Amazon arrow (or smile) is as identifiable as the Nike swoosh. There’s trust in what it provides, what it delivers, and that it’s safe and secure. Secondly, Amazon already has a large global following. According to Digital Commerce 360, there were 126 million Amazon Prime members in the US as of September 2020, and that figure is just a subset of overall Amazon users.
Are there other solutions that a retailer can combine together to mimic the Amazon Go experience? Sure. There are smart fridges, smart shelves, and even another store concept that has been offered up as completely cashier-less and unmanned. The sum of those solutions would certainly go a long way towards replicating what you would get from the use of Just Walk Out technology.
However, I predict that many will go towards Amazon’s way. Why? Apple created a suite of products and software that tied everything together. First it was a re-vamped computer. Then iTunes. Then a cool MP3 player called an iPod. Then a new cellphone called an iPhone. Suddenly, we were in so deep with a brand it became difficult to extricate ourselves from it.
My iCloud is linked to my MacBook Pro, iPhone, iPad and Apple Watch. Oh, and my AirPods too, I’m sure. It’s this closed system that has prevented many from “breaking up” with Apple.
Apple played the long game. Could the Just Walk Out technology similarly serve as a Trojan horse from which other Amazon services will spring forth? It’s likely. Amazon Web Services (AWS) is the company’s cloud platform which, as of February 2020, accounts for over 30 percent of the cloud computing market. Consider Amazon Lockers and Alexa-enabled devices, among others. I’m not pushing the product, simply pointing to its impending arrival.
I have no doubt that the airport industry has been looking for solutions to reduce friction in the travel experience. These solutions, be they Amazon’s or another’s, will make their way into terminals as they become part of our learned behavior. According to McKinsey, COVID-19 has already had an impact on the way people shop: A July 2020 report noted that 15% of US consumers tried grocery delivery for the first time during the pandemic. Of that segment, 80% were satisfied with their experience and 40% said they’d continue online shopping for groceries moving forward.
The hesitancy comes with a mindset that many do not want to be first, but the industry knows that the permanency of pandemic behaviors carrying over into the post-pandemic world will result in having to meet the needs of a new kind of traveler.