Amazon's recent Whole Foods acquisition seems focused on adding a new distribution channel for its existing online retail business. But beneath the surface, the real opportunity is opening APIs for a range of new types of retail UI apps for AWS developers.
The Whole Foods acquisition could present an opportunity for developers to work with an entirely new interface modality that's possibly more significant than the Alexa voice UI. Over the next year, AWS likely will shift its focus to optimize and streamline back-end logistics. This approach, which would follow in the same pattern of Alexa and the Amazon Dash Button, involves working out logistical bugs -- unintended orders, privacy challenges and new vulnerabilities, among others -- while securely providing basic functionality for early adopters. But in this case, the early adopters represent households with smart devices in tech-savvy neighborhoods across the country.
The Whole Foods acquisition could create a paradigm shift in how consumers engage with Amazon and other retailers. The retail UI hasn't evolved much since the advent of the barcode in the 1990s. Amazon is in a better position to provide a variety of consumer- and enterprise-focused apps that improve shopping experiences at brick-and-mortar stores, increase product feedback, offer new marketing opportunities and simplify implementation of new packaging strategies. Here's a look at some of these new classes of apps:
The current sales receipt has not evolved -- except for the minor upgrade of email delivery. That leaves the consumer with a black box of information that says very little about what the total sales amount represents in terms of actual goods. Was it toiletries or food? Kale or ice cream? Amazon already gives customers an exact accounting of their purchases online, and it would be a minor step to provide this same level of depth to physical purchases. Third-party vendors could seize the opportunity to launch apps with health tracking, nutritional analysis and tax category tracking, which could take into account not only products but also their ingredients -- think mobile applications like Mint and MyFitnessPal on steroids.
For the most part, customer feedback on products is limited to purchase data. Retailers must perform analysis on product packaging, product location and marketing efforts to determine why products sell. Amazon could dramatically increase the amount of data that retailers can collect about their sales through standard APIs. This process could even include anonymized emotional tracking capabilities, like Affectiva facial analysis. These standardized APIs will provide new opportunities for third-party consumer applications to provide improvements to product marketing practices.
New packaging strategies
A growing market of third-party food services provide packaged food experiences for consumers. These meals range from semiprepared meals that only need to be heated up to boxes of ingredients packaged with a specific recipe for at-home cooks. Now, Amazon could provide APIs that allow third parties to generate recipe-building apps and virtual storefronts, much like they do for physical products. This allows a marketplace of famous chefs and local connoisseurs to easily sell their best creations.
Amazon has already tested novel retail UI designs in Seattle around payments and inventory optimizations. The Whole Foods acquisition could accelerate this process. Developers should be particularly interested in the opportunities to create new applications for retail UIs of the future that seamlessly blend physical and digital channels. In the short term, AWS could create a specific marketplace for these types of applications and perhaps even build a venture capital fund on the same model as its Alexa program.
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