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Platinum PM
Interviewer confirms.
Now what is the goal and purpose of Amazon Go? In my clarification with the interviewer it was hinted that it’s the viability of a grocery store without checkout. I’d explicitly clarify that goal with the interviewer.
Say we align on this goal…”Prove Amazon Go concept is viable”
Now we need to determine what success for that goal looks like. I’d discuss options with the interviewer to align how we measure success.
A few options include:
1) number of successful shopping transactions?
2) number of repeat customers above x%
3) number of items in checkout
4) average $ value of shopping cart at checkout
We would also need to have a standard grocery store with normal checkout to compare as an A/B test to insure the metrics above are at parity with or better than standard grocery stores. Reason I say this, if Amazon Go launches and gets 1M users right away it may not be a success if they spend less in shopping cart value, buy less profitable items, etc. In grocery business margins are key, quite often grocery stores will have a loss leader item that attracts users but shoppers have to spend more than the loss leader loses to make it worth it. Will discuss this further during pre-launch and launch.
Final decisions
-Goal: Prove viability of Amazon Go concept by proving that Amazon Go saves shoppers time shopping while causing no harm to required margins to stay profitable”
I would have two stores with the exact same suite of products including loss leaders to attract users, price points, etc. This will allow me to compare impact of the time savings without checkout on core metrics for grocery stores of margins, total $ volume, and # of users = profit.
Pre-launch:
Now we need to clarify who the target user is and location of launch along with the strategy to get target user in target location.
I would look at several possible target segments of grocery shoppers:
a) young (18-30) single adults
b) married but no children/dependents (likely 30-50 years old)
c) married with children/dependents
d) married and/or single but older retired with no children/dependents
I would focus on segment C) as that is the group that likely spends the most money on groceries. You could get more narrow by sub segmenting this group into high income, low income, etc. but for simplicity lets focus on the broader whole of segment C).
What’s the focus area for launching the product?
Locations:
a) rural
b) suburban
c) metropolitan
I’d target location C) here as that gives the highest opportunity to capture the most grocery store visitors and making some assumptions I’d propose that metropolitan life is busier and users in this area value time saved shopping versus the more laidback lifestyle in rural and suburban areas.
Also going to go with a metropolitan area where we have a presence to easily monitor and test the concept in with quick and frequent changes.
Launch:
We need to focus on announcing and drawing target users into store once it’s launched. We’re in a metropolitan focusing on married couples with children/dependents. Making assumptions here but going with the fact that they read newspaper, watch the news, and are active amazon app users. Would run campaigns in all three mediums announcing the launch of the store.
I wouldn’t mix things up too much during launch as I don’t want to muddy the variables of the A/B test. If there are more than the above stated goals we could always run a multi-variate test with 3+ stores with each having a different mix to find out which one most greatly impacts revenue. I’m sticking with one control store and one test store for simplicity of first test and MVP.
Post-Launch:
This is where critical measurement of core metrics matter.
I would look at:
1) total number of customers from test store with Amazon Go compared to total number of customers at control
2) then compare number of successful transactions (users bought items) for both stores
3) I’d look at time from entry of store to exit for successful transactions of users at both stores
4) I’d look at total $ of purchases at both locations
5) I’d look at avg $ of each shopping cart at each location
6) I’d look at profits from each location
If the number of shoppers at one location was different than the other I’d take a random number of users from the store with more shoppers equaling the store with less shoppers to help compare exact numbers apples to apples on top of totals. For example, if Amazon Go had less shoppers but was more successful in terms of profits, $ volume spent, less time spent in store per successful transaction but had less total shoppers you would consider it successful and see if you can run another test to find ways to attract more shoppers.
First, I will make sure that I have a good understanding of Amazon Go. From what I know it is a brick and mortar grocery store where in customers can essentially pick up the groceries and leave without being in a checkout line.
The user’s amazon account gets billed. The interviewer agrees that my understanding is correct.
Once this is clear, I will understand the requirements of Amazon Go. 1. smartphone/tablet with Amazon Go app. 2. Amazon account with a registered/ valid credit card.
I will understand what the target customer segment is. whether any location/city has been already decided.
Assume the answers given to me are – Working couples with family. Location is Seattle Downtown.
I will then understand the products that are going to be provided in the store – say regular groceries as you would find in a Safeway.
Goal for Amazon – Market share, vs. revenue,
Goal for customer – Efficiency – time spent in the store.
Goal for app – Ease of finding things that the user wants.
Assume it is revenue.
Pre -launch:
Location – Decided: Seattle downtown
Pricing – I would price products competitively taking into account the groceries stores available in the neighborhood.
Partners: I will partner with local farmers to get fresh produce to the store in addition with partnering with regular partners that will be useful to stock the store.
Launch –
Promotion – Advertise in location TV, Seattle times, in Seahawks, Washington Huskies and Mariners games. In addition I will target users who work in the area via location information obtained from the amazon app and present ads via Amazon prime and when the use their Amazon application. I will also get influencers in Seattle to serve as brand ambassadors. The advertisements will illustrate the advantages of Amazon Go – Efficiency without sacrificing on cost.
Post Launch – Goal is revenue. Salient point of store is efficiency
I will track the following metrics – Two products here – One is the store, second is the application.
1. Number of footfalls
2. Number of conversions once people enter the store.
3. ID of people who frequent the store
4. Who have the opportunity to visit the store and yet are not visiting the store.
5. Revenue/day.
6. Average time spent in the store.
7. Time to find items.
8. Customer feedback (positive/negative)
9. Number of items searched that is not present in the store.
10. Efficiency of the application.
11. Number of downloads of app.
12. Cost of acquisition of customer.
13. Ease of search in the application
Use feedback and metrics to improve products that are available as well as improve the application.
Bronze PM
Checkout process often is a bottleneck for grocery stores .. Improving them will save customers time/hassle ( and on the business sides they will be able to direct their employees where they are really needed)
Solution:- remove traditional checkout process with grab-go-charge automatically tech solution
GTM strategy
-Ensure the value/convenience/fairness of the new solution is messaged correctly in GTM docs
- This will primarily be a Digital/Paper channel advertising ( ensure 30-60-90 days ads are scheduled in Paper, TV, social media etc) and the campaigns are monitored for performance
- Ensure there right educational material +FAQS are socialised pre, during and post launch ... in store, outside store and in GTM docs about how to use this new service , how customer should expect to get charged, how they can dispute a charge, return items etc
- Device a mechanism to seek feedback on customer experience with new service as well as monitor the performance through # of customers who entered, were charged for how many items, avg visitor, shopping cart size, return count/size, customer's needing in-person attention
- Have -in-person backup for customers to answer questions, help with selections
- Monitors and confirm the hypotheiss and Advertise after collecting sufficient data about how many minutes can customers save through new amazon go stores compared to traditional stores for X items in a cart at Y time of the day
PMAmazon is a disruptor in the retail space where it uses technology via a mobile / web app (amazon.com), and a door-door customer service logistics network to service its clients. Its the category creator for online e-commerce.
Amazon Go is a brick and mortar retail store; very similar in concept to the chains like Wallmart, Tesco, etc its was disrupting.It is differentiated by being cashier less in which case it uses technology to provide a unique customer experience (however, is this sufficient for getting customers inside the door?)
Clarification Questions:
First set of question around market research:
Who are the customers?
Customers who buy premium products which might be
- high salary professional singles who might want to buy lunch
- DINK families = no cooking
- high income people looking to buy a new dress or jeans etc.
- high income professionals looking to buy electronics goods like mobile or laptop
Older professionals might want to go out to a shopping mall for a family outing to get work done as well as completing the shopping work - NOT FOCUSSING ON THIS PROFILE
What customer problems will a Amazon Go store solve for the above professionals?
For premium products or new products that customers might want to experience and wont buy online probably
- high end laptop, mobile phone,
- premium fruits and vegetables, ready to eat food e.g. lunches, premium drinks e.g. organic juices, wines, shakes, etc., premium breads etc.
- high end shoes, clothes, jackets, etc.
High income professional might want a warm lunch or something different from his regular eat, they might want to not goto a restaurant because of time limits around lunch break but might want to still eat ready to eat semi prepared food, this might be a break from office work
While there they might be stocking on high quality foods like breads, fruits, juices, shakes for their other meals
While buying something off the counter they might want to check out the latest mobile phone or laptop
Going to another retail store might mean long queues during lunchtime - an automated checkout might be much faster
What is the size of the market?
For highly paid professionals, providing retail items like food, electronics or clothes is a large enough segment any ways you look at it
What is the competition around this?
For ready to eat food , it is restaurants, its other retail chains (where check out time might be longer if not automated),
What is the differentiation from competitors?
Shorter waiting time because of automated check outs
Location preference close to them in business district, home rental
Access to a larger set of items at a more reasonable price
Why does Amazon want to get into this market?
Ans: Amazon might see that they are not able to grow at previous pace because they are not able to sell products in certain segments, or they might see a market opportunity and since they are such a leader in this space that they want to
Why do want to get into this space now?
Ans: A smaller competitor has shown them the possibility of the market
What is the work that they have done on this till now?
Ans: they have recognized the customer segments and their problem --> This is the most critical piece of the question
So some segments might be -
High earning single professionals
DINK (Double Income No Kid families) - WE WILL FOCUS ON THESE
Focus on what problems we might be able to solve
| High Income / DINK Professional coming out to grab a quick lunch and doesn't want to waste time | High | High | High |
| High Income professional / DINK professionals buying premium grocieries | High | High | Medium |
| High Income / DINK professional coming to buy clothes | Low | Medium | High |
| High Income / DINK prof buys a laptop / mobile | High | Med / Low | Med |
So we will choose Amazon Go to sell ready to eat semi cooked lunches, or might have fruits, veggies, premium breads, other grocery items
Silver PM
Q: How would you launch Amazon Go
To launch a product, we need to understand its USP and what problem it is solving.
Amazon Go is a grocery and daily needs store that aims at making physical shopping quick by making the payment on the go (using a linked Amazon account).
Thus, the USP would be the checkout process and the problem it is solving is that of saving shoppers' time.
Goal: The goal is to understand if it is helping users save time at the checkout and improve the overall shopping experience.
Launch Strategy:
Target Audience - Married individuals with/without dependents are our perfect target audiences. These individuals make digital transactions, require a good amount of groceries per day/week/month and most importantly, they benefit from time-saving.
Target Geography - I will pick up a tier 1 city where I can find a good bunch of working, married individuals - our target audience.
People belonging to these geographies live a fast-paced life and will consider time-saving as a reward.
The store should be opened in an area that is
1. Within the city (not on the outskirts) and in a densely populated area
2. Preferably with other physical competitor stores nearby to gauge the effectiveness of our offering
Launch Campaigns
1. Aggressive marketing campaigns running within the Amazon Apps, in the decided geography for the target audience
2. Local marketing campaigns like pamphlets in the newspaper and sending awareness Whatsapp messages to the Housing society groups by approaching the secretary/management
3. Banners in the public transport vehicles like buses, local trains and cabs - this is the biggest means of transport our target audience uses. Banners can also be placed on bus stops and railway stations closest to the store.
4. Geo-synced social media promotions with short videos explaining how is the time saved
Success Metrics:
1. To track the marketing success, we look at the weekly percentage increase in the new consumers
2. The weekly/monthly stickiness - Anything above 50% will be a good retention number and a leading indicator that the product may be habit-forming
3. The average order value
4. The average shopping time
5. The average payment (checkout) time - should be below a target threshold value
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