Amazon Go: The Future of Retail?

There was a time when Amazon was simply an online book store. However, as the years passed, the online retailer grew and broadened its horizons and eventually started selling a plethora of items beyond books. Then Amazon took an interest in technology, and it began to produce electronic devices: Amazon Kindle e-readers, Amazon FireTV portable digital media players, and even a failed smartphone. Currently, Amazon is the fourth most valuable public company in the world.

You may be thinking to yourself that Amazon has clearly come a long way from its humble beginnings, and that it has found its niche, and will stick to it, right? Wrong!

The company is notorious for pushing ahead with innovative ideas, and their latest one is certainly shaping up to be a game-changer. Amazon’s latest venture is called Amazon Go. The premise is simple, but the complexity behind it is astounding.

Have you ever had to wait in a terribly long line at the grocery store behind customers with tons of items when you only have a few? The process of grocery shopping can be irritating. This is exactly the problem that Amazon Go is looking to solve. With Amazon Go, customers can simply walk into the store, grab whatever items they desire, and walk out.

According to Amazon Go’s website, the store offers a bevy of food choices. Customers can stop in for ready-to-eat breakfast, lunch, dinner and snacks, which are prepared by the on-site staff of chefs. The store also seems to be blending the best of both local groceries and big-budget franchises by including brand name items like milk and bread, with smaller, locally produced items like sweets and cheeses.The store will even offer what are called “Amazon Meal Kits,” which include the necessary ingredients for a meal for two.

Sounds too good to be true? There is more to it, but that is the basic gist.

But how does it truly work?

That’s where the beauty of technology comes into play. Essentially, customers must have an Amazon account and the Amazon Go application on their smartphone in order to enter the store. Once inside the store, customers pick up whatever items they want from the shelves. Stock counts are kept entirely electronically. The store uses a mix of computer vision, sensor fusion and deep learning in order to keep track of how many items are on the shelf. This same technology also learns who is grabbing which item, and once the customer leaves the store, their Amazon account is charged accordingly.

It sounds simple enough, but in reality, it raises some questions.

Firstly, how reliable is this technology? One of the greatest concerns over this entire project is billing; more specifically, the accuracy of billing. For example, if two customers come in to purchase the same item, taking the item off of the shelf in rapid succession, is the technology embedded in the shelves smart and fast enough to differentiate between those two customers? Or will it simply charge one customer twice? Obviously, these are situations that Amazon has thought of, and is hopefully working to ensure won’t happen.

Secondly, and much more importantly, what are the economic ramifications of a store like Amazon Go? The entire idea behind the store is to eliminate the human element of cashiers. Customers can simply walk in, take their items, and leave without the hassle of waiting for cashiers to ring customers out. Those cashier positions are important for millions of American citizens to make ends meet.

Currently, Amazon is planning for one single opening in Washington, just to demonstrate the technology as a prototype. If Amazon Go is successful, and the company decides to go nationwide with its stores, many other retailers could follow suit. Obviously a major incentive behind this concept is not only to create a quick and painless user experience, but also to save money on labor for retailers. If other retail juggernauts, like Walmart or Target, do establish their own version of Amazon Go, it could decimate cashier jobs nationwide.

One could make the argument that, even with all of the store’s cutting-edge technology, it will still rely on human beings to restock its shelves, and this will create more jobs, but that seems doubtful. Retail stores only require a nominal number of employees to restock shelves, so it seems unlikely that they will hire additional employees for that purpose.

For those who think this couldn’t possibly be a viable form of retail, industry experts believe that the store has potential to take over. In an article from GeekWire, CEO of Clarus Commerce, Tom Caporaso, gave his thoughts on the store, stating, “If [Amazon Go] can be achieved in some form or fashion, a ‘Just Walk Out’ retail environment would offer consumers a better shopping experience, with greater speed and convenience, which is sure to build loyalty, which is every retailer’s goal.”

Customers are always looking for new ways to do their shopping as effortlessly as possible. That’s what made online shopping so popular in the first place. But can Amazon, one of the world’s largest online retailers, make the brick-and-mortar store as convenient as e-commerce? We’re probably more than a few years off from a completely cashier-less shopping experience, but Amazon Go is certainly paving the way. The first Amazon Go store is set to open sometime later this year. Once the store opens, I will keep you posted on any further developments.