Amazon One Is One-Click For Retail

After a cashier rang up my purchases at Whole Foods, I got my Amazon Prime member discounts and paid with my credit card. That doesn’t sound unusual, but what might be surprising is that I did it with a single palm scan. Holding my hand a few inches over an Amazon One scanner next to the cash register did everything. No reaching for a phone or wallet, and no need to scan an app, swipe a credit card, or anything else – just one quick wave of my hand.

Why Amazon One Matters

At most consumer-facing companies, “loyalty” and “payment” are different issues. You usually have to scan a loyalty card or mobile app bar code before processing your payment with a credit or debit card.

Starbucks saw the friction inherent in this process and fixed it years ago. Their mobile app integrates payment and loyalty. The catch is that it uses funds placed in your Starbucks credit with your credit card. Still, it’s more convenient than traditional payment methods. Reportedly, Starbucks created their multifunction app after observing that most customers standing in line already had their phone in their hand.

Brands can recognize you in various ways. Home Depot, for example, offers to send an email receipt as soon as I scan a credit card associated with my account. They lack a rewards program for general consumers, but such integration would be possible.

Pickup and delivery orders via app or website bring loyalty and payment together when the customer logs into an account. But most brick-and-mortar retailers still do the majority of their sales with in-store checkout.

Amazon One’s One-Click Roots

In 1999, Amazon was awarded a patent for One-Click ordering. This seemingly obvious concept – checking out with a single click using stored shipping and payment information – was a key part of Amazon’s explosive growth.

Since the early days of ecommerce, “cart abandonment” has plagued online retailers. Customers put items in their cart, but never complete the checkout process. Even today, more than two thirds of ecommerce shopping carts are abandoned.

With One-Click, there is zero cart abandonment because there’s no cart. Click the button, and the order is on its way to the warehouse for fulfillment.

In retail settings, customers are far less likely to put items in a physical shopping cart and leave the store without completing the transaction. But, the checkout process can be effortful – hunting for credit cards, loyalty cards or apps, etc. Amazon One, like the original One-Click process, uses the customer’s saved information to allow frictionless checkout.

Loyalty and Rewards Gotchas

Many loyalty and rewards programs require proactive effort to get discounts for an in-store sale. The consumer must scan a barcode, enter a phone number, or take some other action while checking out.

This isn’t always an accident. If the customer is already making a purchase, why give them an incentive they didn’t need? Most often, though, the extra step is there simply because the brand hasn’t invested in the technology to automate identifying the customer’s account.

Customer Focus

Arguably, Amazon is costing itself money if it ensures every Prime member who checks out at Whole Foods gets the discounts they are entitled to. Without Amazon One at the checkout, the customer has to open the Whole Foods mobile app and scan a QR code. Not every customer has the app installed, and even those who do may neglect to get their phone, open the app, and scan the code.

While some retailers might be happy when customers fail to claim discounts, Amazon has always focused on the customer. Amazon One not only allows a near-zero effort checkout, it ensures the customer is getting the best possible price. This builds trust and emotional loyalty.

Amazon One still seems to be an experiment, but it’s growing quickly. Not long ago, my suburban Austin Whole Foods was one of just 71 locations in the U.S. offering it. Today, there are more than 200.

Biometric Competition

Amazon doesn’t have a lock on biometric checkout. In China, some retailers have used facial recognition for contactless checkout for years. Los Angeles-based PopID is testing facial recognition with a variety of restaurant and retail partners. Mastercard is testing both facial recognition and hand-scanningd, along with fingerprint card authentication.

Not Just For Amazon

Amazon may have created Amazon One to use in its own stores – Amazon Go, Amazon Fresh, Whole Foods, etc. – but they aren’t stopping there. Just as they turned cloud computing into a profitable service, Amazon is now offering One to other businesses.

The number of non-Amazon locations with the technology is tiny now, but it’s easy to see why retailers would adopt it to speed up checkout lines and increase customer convenience.

In 1999, Steve Jobs and Apple paid Amazon one million dollars to use One-Click technology in their new iTunes store, a deal made in a single phone call. Will retailers today be as quick to adopt Amazon One? Perhaps not – integrating a new checkout process with legacy point-of-sale systems can be complex.

Knowing Amazon, though, they will do their best to make it easy.