Last year, Amazon opened its first Amazon Go store in Seattle, a physical grocery store specially made for Amazon customers. It has given Amazon users the ability to buy groceries in person instead of online. This type of store can be considered innovative compared to traditional grocery stores as there are no checkout lines at all. Customers enter the store by using the Amazon app, and then put their phones away to start grocery shopping. Everything they pick up is automatically added to, or removed from their virtual shopping cart. The Amazon Go store does not have any registers, meaning that customers can just leave the store without waiting in line. Everything will automatically be charged on the customer’s Amazon user account. Amazon calls this a “just walk out” technology, where the company is using computer vision, deep learning algorithms and sensor fusion technologies to put this concept in place.
The Amazon Go store has several impacts on the retail industry. First of all, as Amazon Go relies on technologies such as computer vision, it will give competitors in the retail industry an incentive to speed up projects including Internet of Things as well. For example, it is said that Walmart is also working on a similar ‘Grab-and-go’ store for the near future. Secondly, even though retailers have to pay for set-up costs, the elimination of cashiers, card processing fees and registers will save them money in the long run. This means that, in the end, retailers will make more profit out of “just walk out” technology grocery stores.
However, there is still some doubt whether we, as consumers, are willing to accustom to such big changes. Are we ready to give up the status-quo? Let me know what you think! I would love to read some of your opinions.
Hi Berna,
I think the concept of the Amazon Go store is very innovative and convenient for busy people. I would use it when it would be a shop near my home, because I’m annoyed when there’s a long line and slow people in front of me. However, I am wondering how shoplifting-proof this system is. There must be a way to fool the system and to walk out with a basket of free groceries, right?
Also, an article from Bloomberg by Spencer Soper (2018), shows Amazon wants to have opened around 3,000 Amazon Go stores by 2021, which may take over the current grocery store as we know it. Amazon does not only compete on online level anymore, but now they are expanding to offline as well: reversed disruption in my opinion.
Furthermore, the first store cost Amazon $1 million for only hardware (Soper, 2018). Imagine the total costs for this shop including the software. I think it takes quite some time before these initial costs have been recouped. Luckily, the software is the same for every store and therefore a one-time cost that will make the marginal software costs for every new store close to zero.
I think Amazon Go will get very big in the future, I’m curious of what it’s going to bring!
Best regards,
Moreen
Soper, S. (September 19, 2018). Amazon Will Consider Opening Up to 3,000 Cashierless Stores by 2021. Retrieved from https://www.bloomberg.com/news/articles/2018-09-19/amazon-is-said-to-plan-up-to-3-000-cashierless-stores-by-2021.
Hi Moreen,
Thank you so much for your response! I have no idea how “shop-lifting proof” this concept will be actually. Very good point you made in my opinion! Also thank you for sending me more insights, very interesting!
Kind regards,
Berna