How will Amazon Go impact the future of bricks-and-mortar retail?

Katie Sadler bw
Posted: 01/26/2018

Walk in, walk out—discover the checkout-free grocery store that’s paving the way for a tech-driven customer experience

amazon go hero
Image via Wikipedia

Amazon Go has opened its doors in the US city of Seattle for customers seeking a seamless (and cashless) checkout-free shopping experience.

 

The “just walk out” artificial intelligence-based retail model allows shoppers to browse, choose products and leave the store without standing in line to checkout. Instead, computer vision and machine learning-based technology, together with on-shelf sensors and hidden cameras, tracks the customers’ every move, automatically detecting when products are taken from or returned to the shelves.

“This technology didn’t exist,” said Gianna Puerini, vice president of Amazon Go, during an interview at the store opening.

“It was really advancing the state of the art of computer vision and machine learning.”

By downloading the Amazon Go app, shoppers ‘tap-in’ to enter the store via public transport-style gates—at this point the tracking begins. Any produce picked up by the customer is automatically charged to their Amazon account on leaving the store and a digital receipt is issued.

The opening follows Amazon’s acquisition of retail chain Whole Foods. This has fueled speculation that, if successful, the retail giant may rollout its model to all existing stores in the Whole Foods chain.

Read more: Will 2018 be the year of voice AI? 

The industry is now watching to see if Amazon’s AI retail solution will be popular with consumers and a cost effective model to transpose elsewhere.

China’s JD.com goes one step further

However, China’s online giant JD.com may have pipped Amazon at the post, announcing its plans to launch hundreds of unmanned grocery stores. The retailer has already trialed a concept store at its headquarters in Beijing.

JD.com’s concept integrates various smart technologies including facial recognition to identify shoppers via ceiling cameras and image recognition, heat mapping and Radio Frequency Identification (RFID) to track customers whereabouts.

The solution also allows retailers to monitor traffic flow, stock efficiency and observe customer preferences. This data will enable the retailer to generate personalized promotions and adverts.

The ultimate retail experience?

And so the ultimate retail experience is delivered. Or is it? The psychological impact of walking into a store and walking out with whatever you desire without stopping to make that transaction is raising concerns over impulse buying.

Likewise, questions are being raised around the use of technology to watch, track and collect data on customers’ every move—and the “big brother”-like impacts this may have if widely adopted.

“The coolness of the technology will undoubtedly get people to check it out. But the quality is what will get them to come back.”

Removing checkouts from stores highlights another immediate concern—what happens to the 3.5 million people who are employed as cashiers (in the US alone) if the technology is adopted? Amazon believes a change of role for employees is all that is needed at present. 

“We’ve just put associates on different kinds of tasks where we think it adds to the customer experience,” said Puerini. According to Amazon, alternative tasks include helping customers with technical queries and finding items.

And with no cashiers at the checkout, Amazon has placed employees in the alcoholic beverage section of the store to check customer ID before they take bottles off the shelf.

“The coolness of the technology will undoubtedly get people to check it out,” said Jeff Lenard, spokesman for the National Association of Convenience Stores (US), during an interview discussing the implications of Amazon’s AI retail model. “But the quality is what will get them to come back.”

Katie Sadler bw
Posted: 01/26/2018

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