Panera Bread announced that it will roll out Amazon One checkout technology to speed customer checkout and enhance the experience of its 52 million loyalty program members.
Customer hand over an Amazon One palm scanner in bakery
Customers will be able to make purchases without credit cards, loyalty cards, or mobile devices. Once enrolled, they will merely scan their palm when checking out. Their loyalty account and saved payment method will be used for the transaction.
Only three months ago, I described Amazon’s palm-scanning technology as “One-Click For Retail.” Just as Amazon’s One-Click established the lowest possible friction for an e-commerce purchase, Amazon One arguably does the same for retail. Only Just Walk Out technology, also from Amazon, might be able to claim an even lower level of effort since it eliminates the checkout process completely.
Panera vs. Starbucks
For years, I did my early morning writing in coffee shops, and my main options were Panera and Starbucks.
While I tended to prefer the Panera ambiance, checking out required retrieving a loyalty card and a payment method. This was mildly annoying, and there were definitely times when I forgot or simply didn’t bother with the loyalty part.
Starbucks, on the other hand, was one of the first companies to see the value of integrating payment and loyalty in a streamlined checkout process. Once you load money into the Starbucks app, a quick bar code scan of your phone is all you need to both pay and earn loyalty points.
Amazon One trumps the Starbucks app by further reducing friction. There’s no need to open an app on your phone or even carry a phone. And, you don’t have to prepay. Amazon One uses your preferred payment method on a pay as you go basis.
A More Personalized Customer Experience
A near-frictionless checkout isn’t the only benefit for Panera loyalty members. According to Dilip Kumar, Vice President for AWS Applications at Amazon, a quick palm scan will enable Panera associates “to welcome them by name and provide a highly personalized experience.”
In addition, Panera staff will be able to let the customer know about any available rewards and reorder their favorite menu items if desired.
Long Term Benefit: True Loyalty
In and of themselves, most retail loyalty programs don’t create true, emotional loyalty. Rather, effective programs keep customers coming back to accrue rewards like free product or other benefits. They can also guide habit formation. If a customer repeatedly stops at a store on the way to work, the habit can persist even if the frequency or value of rewards declines.
While they can increase sales, rewards programs generally don’t change the way people feel about a brand. (Panera might be an exception. For a while, at least, their rewards popped up with apparently random timing. Surprise
Using Amazon One might have some additional long-term benefits. Many customers don’t bother signing up for or consistently use reward programs because they don’t want to scan cards or open mobile apps every time they make a small purchase. A frictionless loyalty program will encourage both new enrollments and increased use by members.
While being greeted by name after I scan my palm doesn’t impress me as truly personalized service, it’s likely that staff members who do that will actually learn the names of regular customers. Being greeted with a smile by an associate who knows you without prompting is a much higher level of personalization. A human connection is an experience that engenders a deeper level of loyalty.
In addition, Gartner research shows that another key to true loyalty is a low-effort experience. Even unconsciously, people will gravitate to brands who offer simpler, easier interactions.
A Big Step For Amazon One
Currently, the Amazon One website lists just a couple of hundred locations - many are Whole Foods, Amazon Go, or other Amazon properties. Panera Bread alone has more than 2,000 stores in the U.S.
Neither company has provided a schedule for the rollout, but Panera offers a major opportunity to scale the number of non-Amazon locations for Amazon One in a big way. Beyond that, the pre-checkout personalization and integration with customer data that will be offered at Panera goes beyond current functionality at, say, Whole Foods.
Amazon has emphasized a frictionless customer experience since its earliest days as an e-commerce bookseller. Now, they are exporting the concept to other companies under the Amazon Web Services banner. If all works as planned, customers will benefit. Even companies that don’t adopt Amazon One will feel the pressure to offer an equally effortless experience.
