Amazon’s store of the future, Amazon Go, has become reality in 2016 and has been a leading example for the use of in-store technologies ever since (Amazon, 2018). The notorious checkout-free convenience store opened its doors for an employee-only focus group after years of development (Rey, 2017). It took the e-commerce giant an additional year to tweak its technology, which appeared to run into difficulties when items were being misplaced, when it had to track over 20 shoppers simultaneously, or when their movement was too fast (Dastin 2018; Mogg, 2017). Amazon’s reported goals? By increasing the level of convenience in its convenience store, Amazon may be able to increase its online base of customers offline, which is where the majority of retail sales are still made (Thomas, 2017). Moreover, increasing data collection would allow Amazon to learn even more about the shopping habits of its customers (Karsten & West, 2018).
Within the Amazon Go store, Amazon’s “Just Walk Out Technology” enables shoppers to go about their regular groceries without waiting in line for the checkout. Instead, shoppers simply walk out and are billed through their Amazon account. All shoppers need is an Amazon account and the Amazon Go app, with which to enter the store.
To realize checkout-free shopping, the Amazon Go store is filled with cameras and sensors to allow the use of computer vision and sensor fusion. To illustrate, image analysis may be able to cut down the list of likely matching items, whereas combined with weight sensors, the single item in question may be identified. To continuously train the accuracy of its results, and hence the accuracy of its virtual shopping carts, Amazon is using deep learning technology (Deoras, 2018).
Amazon’s tech grocery store has not remained unnoticed for incumbents in the grocery retailing industry. For example, the largest Dutch grocery chain, Albert Heijn, has recently introduced checkout-free shopping at two of its AH To go stores. Using the “Tap to go” technology, shoppers simply tap against the price tag of their selected product(s) and are billed ten minutes after their final tap (Andersen, 2018).
Even though checkout-free shopping is not mainstream yet, I do see much potential for it to become so. If Amazon’s planned expansion to 3.000 stores by 2021 becomes reality, Amazon Go would become one of the largest chains in the United States (Soper, 2018). The aforementioned may lead to a snowball effect of retailers implementing checkout-free shopping technologies in an attempt to compete with the e-commerce giant. Such will have many implications, the most obvious one concerning the eliminated need for cashier jobs.
Opinions differ about when checkout-free shopping will become a widespread reality. Although I do believe that it will be a gradual process, I would not be surprised by a proliferation once shoppers’ patience for waiting lines ceases as they get used to the heightened level of convenience.
Sources:
- https://www.amazon.com/b?ie=UTF8&node=16008589011
- https://www.volkskrant.nl/nieuws-achtergrond/bij-albert-heijn-kun-je-met-de-tap-to-go-pas-in-een-halve-minuut-je-boodschappen-doen~b82f09ff/
- https://www.analyticsindiamag.com/understanding-ai-behind-amazon-go/
- https://www.brookings.edu/blog/techtank/2018/02/13/amazon-go-store-offers-quicker-checkout-for-greater-data-collection/
- https://www.recode.net/2017/3/27/15072084/amazons-go-future-store-delayed-opening
- http://www.scanpaygo.be/index.html
- https://www.bloomberg.com/news/articles/2018-09-19/amazon-is-said-to-plan-up-to-3-000-cashierless-stores-by-2021
- https://www.cnbc.com/2017/08/03/retails-not-dead-and-physical-stores-still-matter-goldman-says.html
Hi Sandra,
Very nicely explained how you believe the near future of the grocery retailing will look like. I do wonder if and how normal grocery stores can compete with Amazon’s technological capabilities. For example, Albert Heijn’s newer tap-to-go technology is far inferior to Amazon Go’s technology. Most grocery chains have the technological nor the financial capabilities to compete with Amazon on these new developments.
Hi Sandra,
Thank you for the interesting read! I share your thoughts about the gradual introduction of checkout-free shopping. Just like the introduction of the self-scanners and the self-checkouts, I think checkout-free shopping will become more popular gradually. I think it’s a great new step in the retail sector, and I believe it will become an abundant reality in the near future (within 5 years). Finally, no more waiting for old ladies in the checkout line.
However, according to an article by Forbes, there seem to be some issues with Amazon’s ‘innovation’:
”
People admit that grocery trips of 20 to 30 item purchases will still require some type of boxing or bagging for transport.
Urban consumers start to ask themselves, “Why do I give a crap about not standing in line for checkout, if I still have to lug my toilet paper home through blocks of busy streets or on the subway? Wouldn’t I just be better off having some or all of my stuff delivered to my apartment?”
Moms and dads of irascible and accident-prone toddlers realize, “This is insane. Yes, I can pick everything myself off the shelves, but my hands are tied keeping my devil children at bay, and I still need to somehow get all this stuff into my car. Couldn’t I just elect to have all my purchases waiting for me at the door upon exit or, better yet, at my car, at a curbside drive-thru, or even at home?”
” (Forbes, 2018).
These are some examples, named in the article, that depict the likeable problems for Amazon Go. The digitalization of the retail industry, and the increasing availability of delivery options, seem to be too large factors to make Amazon Go a tremendous success. E-commere, in which Amazon is the best of the best, may be the nemesis of its new innovation.
Curious what you think!
https://www.forbes.com/sites/christopherwalton/2018/08/03/in-the-era-of-alibaba-and-new-retail-amazon-go-may-have-a-fatal-flaw-that-limits-its-potential/#1875d94b24f0
Hi Sandra,
thanks for this interesting article! I really like the idea of Amazon Go’s store concept of check-out free shopping! It introduces the customers to a more efficient and convenient way of shopping. I agree with your point, that, if Amazon’s planned expansion to 3000 stores in the United States within the next 3,5 years actually becomes reality, customers might get used to this service fast and see it as a “standard” feature in the supermarket. This might put traditional supermarkets in a challenging position. As existing supermarkets are not designed for a checkout-free shopping process, nor do they have the necessary IT infrastructure or even knowledge, supermarket chains like Walmart, Target and many more might be required to either accept Amazon as competitor and implement similar technologies in their businesses to be able to compete, which comes with very high costs, or they have to adapt their business model, to meet customer demand in another way.
Another interesting read!
It’s quite telling to me that the reduction of cashier jobs can be seen as a good or bad thing depending on perspective. Amazon, Albert Heijn and even Mcdonalds enjoy increased profits for sure.
However, those profits aren’t going to lead to more jobs or higher wages, instead being funneled into investments and a higher executive bonus. Cashiers in particular fall into two camps: 1. low wage and lower education workers 2. Teenagers working part-time.
The reduction of jobs for camp 1 means that they must find similar jobs or be re-educated, hampering their ability to ensure personal stability and contribute to the economy buy buying things, at the very least in the short term. Camp 2, however, is not quite as dependant on the job to succeed as they are not responsible for themselves financially. Nevertheless, the jobs are taken to build up spending money that would be used to contribute to the economy directly.
This system essentially redistributes wealth from workers, who would spend that money and help the economy, to the companies who already dodge taxes and tend to hoard wealth and buy back stocks.