Essay: Impact Of Digital Disruption On Amazon's Grocery Business

Work Centered Analysis (WCA) prior to the disruption event

Discuss about the Impact of Digital Disruption in Amazon.com.

Digital disruption is a new trend in the businesses caused by new and innovative technologies. These new technologies are impacting the business models and the values of the existing goods and services in an outstanding way (Gilbert 2015). Since, these technologies are disrupting the normal way of market and businesses and make them rethink about the way of businesses and reevaluate the goods and services; these are called disruptive technologies (McQuivey 2013). In almost every industry, the digital rivals are taking the advantage of the new platform, tools and equipment and relationships for disrupting the existing market, undercutting the competitors, get closer to customers, and wrecking havoc with the general way of doing the business. According to experts, adopting their method off business is the only way of sustaining in the market for the other businesses. This report will address the impact of digital disruption introduced by Amazon on the company itself and its Work Centered Analysis (WCA) prior and post to the implementation of the digital disruption event.

Amazon is the biggest e-commerce company, holding the third position among the most valuable companies in the world, surpassing Microsoft (Carr 2018). Only Apple and Alphabet stand ahead on Amazon in the list published by Fortune. The company is the largest online retailer in terms of market capitalization and revenue. The company started as an online bookstore and later diversified into almost every category of products that can be sold online. Currently, the company operates in 15 countries across different continents and has different websites for each country. Amazon started their business with a disruptive technology back in 1994 by introducing the concept of online shopping (Amazon.com 2018). Once again the company has introduced another huge level of digital disruption in the name of Amazon Go.

Amazon sells groceries too online along with other products. In 2017, it acquired Whole Foods Market, which is an American grocery supermarket chain. Jeff Bezos, CEO of Amazon, had introduced a revolutionary concept of grocery shopping, launched under the name of Amazon Go. This is a digital disruption event in the grocery supermarket industry. In the Amazon Go store, people are able to shop the groceries without having to checkout through a cashier or a self-checkout station. This is a huge technological revolution, which includes computer vision, sensor fusion and deep learning algorithms for automating the purchase checkout and payment process of the retail transactions. This store concept takes the advantage of the smartphones and geofencing technology as a fundamental basic for managing the auto-purchases by the customers along with managing the inventory and supply chain management (Wingfield 2018). It requires the linking of the Amazon Go app with the Amazon.com account of the users before they start purchasing from the store. They can also add others in the family in their account so that their purchases are also linked with the main account. The only store of Amazon Go was launched in Seattle, on January 22, 2018 (Day and Morley 2018). This report aims to analyze the impact of this new revolutionary technology on the company by comparing the work centered analyses of Amazon before and after the implementation of the event, followed by the challenges faced and recommendations to overcome those.

Work Centered Analysis (WCA) post implementation of the disruption event

Work Centered Analysis (WCA) refers to the system of work involving 6 major elements, namely, customers, products, business process, participants, information and technology (Naikar 2016). Customers are the internal and external purchasers of the business process. Products refer to the goods and services produced by the business. The business process refers to the steps in the business. Participants are those who get involved in the business to make it happen. Information refers to the knowledge that the business uses or creates for the customers and technology is used by the business to conduct the required activities. The WCA framework and the elements are shown below.

From the WCA of Amazon.com, working as a basic e-commerce website, it can be inferred that there are some issues with it to work as a grocery seller also. People would always want to buy the groceries, fresh fruits and vegetables, raw meat and fish, bakery items and dairy products by seeing the condition personally and checking the manufacturing and expiry date, unlike for shopping the consumer goods. This feature is not possible for e-commerce purchasing. Knowing this, Amazon.com never provided these items through the online shopping. At the same time, the e-commerce website does not have the option of credit during the check out process. The customers have to pay through one of the many payment options available while placing the order. It may so happen that the customers do not have the enough money at the particular time of purchasing or the card processing might be having any server problem and thereby payment gets delayed or cancelled. It is assumed that this can create several problems, such as, expiry of any special offer, goods going out of stock, end of sale. Had there been any option for buying now and paying later, the customers would not have faced these issues. The introduction of Amazon Go aims to offer more convenience during the grocery shopping.

With the launch of Amazon Go, the company made entry into the supermarket grocery business with a twist of purchasing without having a checkout process. This is a revolutionary step in the business process of Amazon. Eliminating the traditional checkout process of a purchase is the first and one of the most innovative technological inventions in the modern world. When people prefer the convenience of shopping from home for almost all types of goods, Amazon found the opportunity of expanding its business into the grocery department through a twist, which makes grocery shopping all the more convenient to people. Not having to stand in the queue for billing saves a lot of time for the people (Wong 2018). Amazon had already given tough competition to the brick and mortar stores for various types of goods with its e-commerce business, which was a digital disruption itself (Evans 2017). With the launch of Amazon Go, it again introduced a new digital disruption to the supermarket grocery rivals. The WCA after the implementation of the new technology has been illustrated in Appendix B. However, the company has opened only one store in Seattle and has plans for opening more stores across the world.

Since the entire system of this digital disruption event is based on higher level of technology, it is possible that the store faces some issues. To handle those issues, the company can follow some of the following recommendations.

• The employees working at the back of the store should be vigilant enough to help the customers with their shopping. Since, there will be no cashier; the customers would not be able to ask any one if they face difficulties while searching for a particular product. Hence, there should be adequate store assistants to guide the customers through the store and purchasing process. The older generation has the chance of facing much problem with the new system and hence, would require more help from the assistants.
• Some people might want to take the advantage of the absence of the checkout system and would want to shoplift. Although, there are hundreds of cameras in the store, the employees must keep a sharp eye on the CCTV monitor.
• The technology team should be up-to-date with the changes happening on the system. Since, the system is entirely new, the company must ensure that it works smoothly and does not crash.
• Amazon Go does not accept any type of food stamps or meal voucher. In the app, it should create an option for accepting the food stamps or coupons for payment.
• There can be privacy concerns as there are hundreds of cameras everywhere in the store capturing numerous photos of the customers. The company must ensure that it is not using those photos for any other purpose.

• Amazon should employ more efficient employees and train them about how to assist the customers with the new system.
• It should ensure the accuracy of the technology so that not shoplifting, even if accidental, can happen.
• Option of accepting the food stamps for the grocery purchase should be incorporated as a payment method.
• Amazon should declare that they are not using any customer image for any other purposes.

Conclusions

Amazon has been a pioneer in the field of technology. It transformed the world of shopping with launching the concept of online shopping. Apart from online shopping, Amazon has entered into manufacturing and selling of its own branded products, prime membership and its advantages, video streaming and all at a very low cost. The recent digital disruption introduced by the company is in the market of supermarket grocery business. The concept of grocery shopping without enduring queue and process of checkout is entirely new and has been revolutionizing the grocery shopping. This concept has disrupted the usual business process of the supermarket grocery stores, where people have to stand in long queues for check out. The stores also have to employ many cashiers and user operated systems. However, the elimination of checkout system is very new and can face many challenges in future, but it is definitely a digital disruption that has the potential to change the way of traditional grocery selling business.

References

Amazon.com, 2018. Amazon.com: Online Shopping for Electronics, Apparel, Computers, Books, DVDs & more. [online] Amazon.com. Available at: https://www.amazon.com/ [Accessed 17 Apr. 2018].

Carr, F., 2018. Amazon Is Now More Valuable Than Microsoft and Only 2 Other Companies Are Worth More. [online] Fortune. Available at: https://fortune.com/2018/02/15/amazon-microsoft-third-most-valuable-company/ [Accessed 17 Apr. 2018].

Day, M. and Morley, K., 2018. Amazon's new store without checkouts doesn't quite Go to plan. [online] Stuff. Available at: https://www.stuff.co.nz/business/world/100796913/amazon-go-store-with-no-checkouts-opens-to-the-public-in-seattle [Accessed 17 Apr. 2018].

Evans, M., 2017. 5 Ways Amazon Will Disrupt Commerce Before Amazon Go Comes To Your Neighborhood. [online] Forbes.com. Available at: https://www.forbes.com/sites/michelleevans1/2017/01/05/5-ways-amazon-will-disrupt-commerce-before-amazon-go-comes-to-your-neighborhood/#1c3339c1358b [Accessed 17 Apr. 2018].

Gilbert, R.J., 2015. E-books: A tale of digital disruption. Journal of Economic Perspectives, 29(3), pp.165-84.

McQuivey, J., 2013. Digital disruption: Unleashing the next wave of innovation.

Naikar, N., 2016. Work domain analysis: Concepts, guidelines, and cases. CRC Press.

Wingfield, N., 2018. Inside Amazon Go, a Store of the Future. [online] Nytimes.com. Available at: https://www.nytimes.com/2018/01/21/technology/inside-amazon-go-a-store-of-the-future.html [Accessed 17 Apr. 2018].

Wong, R., 2018. Everything you need to know about shopping at Amazon Go. [online] Mashable. Available at: https://mashable.com/2018/01/22/everything-you-need-to-know-amazon-go/#dXxY81fwmmql [Accessed 17 Apr. 2018].