The airlines can and should beat Amazon Go to the punch at airports
It all comes down to one big question: Will the airlines actually have the guts to try this? Will they just give into apathy and inertia and let Amazon win?
This past week in the ongoing saga that is, "As the Amazon Turns," a Reuters report surfaced that Amazon may have plans to implement its Amazon Go checkout-free store format in airports. These reports also came on the heels of Amazon opening another Go store the size of a college dorm room, only 450 square feet, in Seattle, bringing the total number of Amazon Go stores launched thus far in 2018 to eight.
None of this news should be a surprise. Bloomberg reported in September that Amazon may open as many as 3,000 Amazon Go stores by 2021. Getting smaller in size and finding new locations, like airports or even hospitals, as other reports have indicated, only accelerates the probability of Amazon meeting this lofty goal.
Airports, specifically, are a genius next plot twist in the Amazon Go soap opera, if the reports are indeed true, because Amazon has one thing that no other retailer has.
Yes, Amazon has MAU -- Mobile App Ubiquity. According to Statista, there are roughly 95 million Amazon Prime members in the United States. That's almost one-third of the U.S. population! The American public is just flat out comfortable with Amazon. Amazon is the cozy afghan blanket by the fire on the warm winter's night of American consumerism.
Which all begs the question -- Is the game already over? Has Amazon already won the battle for convenience across the national landscape with its Amazon Go innovation? Or are there hidden opportunities lurking within the shadows for those opportunistic enough to grab them?
Well, in the case of airports, it is definitely the latter. Amazon, believe it or not, is not the most equipped to win the airport convenience battle, no matter how Yuppie Nirvana Amazon Go may be.
The airlines, in contrast, are not burdened by the same issues as retailers. Travelers, especially business travelers, willingly download mobile apps to help them speed through airports and onto planes, and the airlines also operate out of "hubs" -- i.e. physical centers of activity where their planes and travelers come and go quite frequently. In essence, the airlines already have the pre-loaded access to customers, along with the physical locations, that they need to give Amazon a run for its money in the airport convenience store business.
Checkout-free convenience stores at airports could easily become extensions of Delta's, Southwest's, United's, or any other airline's business model in just a few quick steps. To show you what I mean, let's take Delta as an example.
Unlike Amazon, Delta would know the information about everyone traveling on a given date. Delta would know who they are, how old they are, with whom they are traveling, and, my favorite, they would even know if their flights are on time or delayed by weather.
The promotions and incentive schemes that the airlines could devise to incent travelers to shop within their airport convenience stores would be beyond compare.
At the end of the day, it is easy to think that Amazon is the be all and end all of retail, that it is just Amazon's world, and that everyone else is just doing what it can to pay rent. But that is not the case with airports. Amazon does not actually have the advantage here. Amazon has no right to win the airport convenience game. Airport convenience could and should belong to the airlines if they play their cards right.
But, it all comes down to one big question: Will the airlines actually have the guts to try this? Or, will they stay stuck in the past like many of their retail brethren and continue to look within their business models instead of outside of them for opportunity? Will they just give into apathy and inertia and let Amazon win?
Only time will tell if the airlines will put up their dukes in a fight they can win, provided, of course, Amazon does not know all the above already and one day buy an airline just like it did Whole Foods.
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