Are you Ready for Unready? It’s Launch and Learn Time!

The old days of retailers quietly testing new tech offstage are a relic of the past. Welcome to the launch and learn era, where retailers are ditching the warm-up act and releasing tech straight into consumer environments before the kinks are worked out. It's a gutsy game of moving fast and iterating even faster based on real-time shopper feedback. This high-risk, high-reward strategy aims to keep retailers innovating at a rapid pace, but it isn’t without potential pitfalls.

Carol dives into this new frontier, unpacking how major retailers like Best Buy, Walmart, and Amazon are unleashing shiny new tech onto unsuspecting customers first and figuring out the bugs and backlash as they go.

Key examples discussed include:

• Best Buy's new AI assistant built to support (or replace?) human assistance.
• Walmart's rocky road with self-checkout scaling.
• Amazon's pivot to smart Dash carts after pulling "Just Walk Out" tech from Fresh stores. 

Carol explores how the exponential pace of tech innovation, razor-thin competitive windows, and the lure of cost cuts are fading the idea of perfecting solutions before launch.

But diving head-first into uncharted waters has its hazards. Consumers expecting seamless experiences are instead being used as guinea pigs, sparking confusion and triggering control issues. On the flip side, retailers are placing big bets that the efficiencies will pay off by hitting "launch" first and making the business case later.

Key Takeaways:

• How tensions can flare when consumer expectations and retailer justifications are at odds.
• How some retailers are balancing high-tech and high-touch solutions on the front end rather than lurching between extremes.
• Why retailers are trading between live experiments instead of defaulting to the tried and true.
• Why Amazon’s checkout tech pivots are the ultimate launch-and-learn case study.

Want to be a guest on Spieckerman Speaks Retail?
Contact team@spieckermanretail.com
Check out more of Carol's retail insights and updates
Follow Carol on LinkedIn
Follow Carol on Twitter

Transcript

Welcome to Spieckerman Speaks Retail with me, Carol Spieckerman. I’ve been knee-deep in B2B retail sales and marketing for my entire career and I know how hard it is to stand out from the herd. So I launched my consulting business with a clear mission: Create an integrated thought leadership, market positioning, and sales process so my clients can navigate B2B sales with confidence, attract the right partners, and be legit thought leaders, not just another vendor. My podcast curates fresh takes on the wide world of retail through my latest retail trajectories and interviews with experts who help us chart the course to what's next.

It's been a minute since our last episode. I’ve been immersed in a really cool onsite project that’s had me bopping back and forth to California. But I couldn’t wait to get back in the saddle to talk about one of my newest retail trajectories because it just keeps playing out. In fact, I’m glad I waited to talk about it because even more headlines have popped up that back it up. And, like always, this new trajectory links to several evergreen trajectories that continue to gain steam.

I’m talking about a seemingly slight change in how and when technology is entering retail that will have a big impact on how successful it is over time. We’ve gone from test and launch to launch and learn.

Retailers futzing with new tech behind closed doors, running clandestine tests to get it right, and launching once the bugs are worked out? All of that’s out the window. 

In the launch and learn era, retailers will unleash new tech before the training wheels are off, the testing phase will be performed on live subjects – otherwise known as shoppers – and the learning and course correcting will happen after going live. That could mean tweaking the tech further, slamming on the brakes, or both. 

A lot of it will be kept under wraps and just appear out of nowhere…in some cases,it’ll disappear just as mysteriously. Remember the days when retailers would boldly announce their launches, complete with rollout timelines? That’ll also be a remnant of retail history. 

 I can’t tell you how many tests I’ve heard about, either from retailers or third-party solution providers that were deeply involved IN the tests, that were live-tested on shoppers then quietly shut down without any evidence it ever even happened.

This daredevil shift to launch and learn is all about keeping retailers ahead of the curve because, in this fast-paced environment, perfect is the enemy of the good. But pushing out embryonic ideas isn’t without its perils. For one thing, shoppers aren’t always thrilled with the trial versions of new technology and they don’t love being guinea pigs. They expect stuff to be worked out and ready to go.  And sometimes retailers can’t catch a break because, right after launch, retail watchers are giving the thumbs up or thumbs down, and portraying any pull-backs that retailers DO announce as clear evidence of spectacular failure.

 But I say it's time to stop applying old-school assumptions to modern-day retail realities, PARTICULARLY on the automation front because that’s where launch and learn is flourishing. After all, customer-facing automation is where live subjects are available that enable the testing to happen in the first place. But that’s also what makes it so high risk.

 As I’ve noted in countless podcast interviews, presentations, and media contributions over the last year or so, retailers are determined to strike the right balance between high-tech and high touch. It’s emerged as a top goal because retailers have so many options on the high-tech front. In the launch and learn era, they’re having to make snap judgments on when it makes sense to lean into all the awesome automated capabilities that are available to them and when to tap on the brakes and make sure that humans are at the helm or at least at the ready. 

 Best Buy is proactively implementing a hybrid approach. They’re introducing a GenAI-powered virtual assistant that will directly help customers troubleshoot product problems, but it will also make recommendations to service agents in real-time. So it balances out high tech and high touch – or at least that’s the plan.

Best Buy has already laid off some Geek Squad field agents and phone support personnel but the rationale they gave is what’s most interesting. They are doing it in part to better capitalize on the investments they’re making in AI. There’s a lot of this going on whether retailers are copping to it or not. The tail is wagging the dog. They’re making investments in AI and, in some cases, scrambling to justify it – maybe before they’re ready.

Retailers from Target to Tesco have unleashed automated checkouts, for example, only to reinstate or re-enforce people-powered support in the wake of consumer backlash or buggy execution. 

Walmart has been dinged for upping the automation in its stores, particularly self-checkout. Walmart’s made attempts at going all-in with self-checkout in some locations, only to reintroduce people power after taking consumer comebacks into consideration. Shoppers have all kinds of reasons for carping about automated checkouts. Some worry about it putting people out of work, others look FORWARD to interacting with store associates, still others think they’re paying for personal service and it’s being yanked away.

Companies in and outside of retail are starting to pull the trigger on AI-powered customer service options too and it’s leading to massive call center purges. LL Bean, American Airlines, and Verizon have announced big pull-backs. They’ve calculated the COST savings, but will they track customer backlash and make adjustments like retailers have or just power through? We shall see!

But by far the best example of the launch-and-learn dynamic at work is Amazon’s announcement last month that it’s removing its “Just Walk Out” automated checkout technology from Amazon Fresh stores and the two Whole Foods stores that had it. Predictably, the “I told you so’s” started rolling in right away, with some pundits erroneously assuming Amazon had completely done away with Just Walk Out altogether when in fact it’s very much alive.

Just Walk Out is still powering Amazon’s smaller “Go” format and it’s rocking along in other high-traffic-but-tidy storefronts in venues like stadiums, airports, and hotels. These operators have been really happy with the technology for the most part – they’re seeing nice sales upticks and it’s a great fit for their business models and formats.

But it just wasn’t such a good fit for Amazon’s Fresh format. It fares better in smaller shops where folks make smaller purchases. But Amazon pulling Just Walk out from its Fresh format wasn’t an automation fail. Amazon just switched over to smart carts – or Dash carts as they call them – that have bells and whistles like onboard item scanners and touch screens that display nearby items. Automatic billing lets folks skip the checkout line just as with Just Walk Out, but at a far lower cost and in a way that scales based on usage. The carts also provide quite a bit more feedback to shoppers. Amazon learned that shoppers like to have receipts, they want to make sure their coupons are being credited and see how much they’re saving…or not. So, it turns out we’re a bunch of control freaks…but different shoppers define control differently. Some see people-powered processes as a way to stay in control, others (and I put myself in this category), feel perfectly in control using kiosks, self-checkout, mobile checkout, and so on. For now, high-tech at its best when it complements high-touch experiences. 

So that’s the backdrop but I want to switch to a quote from a recent interview with Dilip Kumar, he’s the Amazon VP who helped invent Just Walk Out. What he said brings everything back to the real crux of the matter. 

He called the Dash Cart "A much better platform for experimentation and continued invention in large-format grocery stores than Just Walk Out.” Did you hear that? “ He DIDN’T say that Dash Carts are much further along and ready for prime time… instead, he called them a better platform for experimentation.” So that’s the criteria, folks.

In other words, the plot of this story isn’t that a behemoth platform got humbled, then went back into a corner and vowed to take longer to work out the bugs next time. Amazon didn’t trade a newfangled, unproven technology for something tried and true – it just switched out one launch-and-learn experiment – Just Walk Out, for another one – the Dash Carts. Mr. Kumar went on to say that as time moves along quote “all kinds of things will happen to the cart”. So, Dash Carts are a work in progress that’s being unleashed on shoppers so Amazon can learn and adjust accordingly. But maybe for different reasons than you’d think.

In fact, every article I’ve read about the Just Walk Out walk-back has buried the lede. Here’s what jumped out at me. This year, Amazon expects to double the number of third-party operators that license its Just Walk Out technology. The growth is gonna come from those concession and kiosk companies and hotels and so on that are happy with Just Walk Out and ready for rollout. Word is spreading. So Amazon is leveraging its still pretty limited physical footprint to test and improve Just Walk Out, not so it can force it into Amazon-owned brick-and-mortars but to explode its LICENSING business with all those third-party operators. 

If you think about it, it’s not that different from running a third-party marketplace – HELLO! Bottom line: The saga of Just Walk Out isn’t a failure or even a stretch – it’s by design and it's a lather, rinse, repeat of Amazon’s platform monetization business model. But this time, it’s an automated solution and it’s being live-tested right now on shoppers.

So two things to consider in a launch and learn world, 

On the consumer side: If you ask me, there’s a little bit of “you’re not the boss of me” psychology at work with a lot of these automation experiments. Just the ACT of putting the tech out there can trigger backlash because it reminds consumers that they’re losing more control. So even if relinquishing control IMPROVES the overall customer experience, the knee-jerk reaction can be – “Hey, not so fast,” or “Wait a minute, I don’t remember signing up for this.” And no one sent out a memo letting shoppers know that a lot of the tech they’re interacting with is experimental and in the early stages of development. So there’s a disconnect between retailers’ intentions and shoppers’ expectations. And that can get retailers into trouble.

Which brings me to the retailer and brand side of the equation:

They're making massive investments in automated solutions and of course, AI is enabling a lot of it. The payoff comes through cost savings over time. But if justifying investments and racing toward cost savings are the primary drivers for these decisions, retailers run the risk of unleashing half-baked technology on consumers when and where it might count the most. With all the capabilities that HAVE been unleashed, many of them provided by third-party tech companies, it's so tempting for retailers to "just do it," then try to rationalize how it might actually help customers after the fact. Did shoppers really ask for it? But does it really matter? After all, to quote Henry Ford “If I had asked people what they wanted, they would have said faster horses.” That was one of Steve Jobs' favorite quotes and threw in his own twist by famously saying “Some people say give the customers what they want, but our job is to figure out what they're going to want before they do.” That’s the perfect rationale – but in the launch-and-learn era, that “figuring out” will be happening live…Ready or not.

Thank you for listening in today. I hope you enjoyed the episode and if you did, you can invite me to your organization or event to bring conversations like this to life in your spaces. This is what I do for a living, retail B2B coaching, training, and executive consulting. If it has to do with retail thought leadership, B2B market positioning, and business development, it’s probably something I can help you with. If you’re interested in how we can work together, reach out to me at spieckermanretail.com or email team@spieckermanretail.com to book a discovery call.

See you next time.