News Analysis

Amazon Go: More Questions than Answers for Retail

There’s a new type of convenience store in town, and it’s a little bit different than the ones that have thrived up to this point. Just this past month, after a lengthy testing phase, Amazon, www.amazon.com, opened its Amazon Go convenience store in Seattle, Wash., a first-of-its-kind retail experience that relies on various technologies to do the job of human cashiers. That’s right, say goodbye to the human-cashier experience. Amazon Go offers Just Walk Out Shopping, which leverages computer vision, sensor fusion, and deep-learning technologies to enable checkout-less shopping sprees within its 1,800-sq.ft. retail space. The store offers a variety of ready-to-eat meal, snack options, and meal kits, alongside grocery staples.

To enter the Amazon Go store, customers must be prepared with a compatible smartphone device, the Amazon Go app, and an active account linked to a form of payment. Customers scan their devices to get through the turnstiles, and then they’re free to take what they want to buy and leave. The sophisticated cameras and machine learning algorithms detect what each person takes from the shelves (and what they put back) and charges them for their items when they leave. The technologies at play in the Amazon Go store resemble those used in self-driving cars, but Amazon hasn’t been too open about exactly how the Just Walk Out Shopping solution works.

Most likely, it’s an amalgamation of several technologies and solutions, including location-based services, image recognition software, sensor technology, artificial intelligence, and machine learning, among others.

Checkout-less shopping may very well be where the retail industry is headed eventually, but in the near-term, Amazon Go is probably more of a one-off than the new normal. Though sophisticated, the solution would not necessarily work in other retail environments, which tend to be much larger than Amazon’s Seattle spot. There’s also the question of inclusion. Shopping in an Amazon Go store requires customers to have compatible hardware and software, which will exclude demographics that also need access to goods and services, including those who deal exclusively in cash for one reason or another.

Amazon essentially claims it created its checkout-less store concept just to prove that it can be done, but traditional grocery chains are feeling the heat. Kroger, www.kroger.com, has responded by announcing it will introduce its Scan, Bag, Go shopping technology in 18 operating divisions, making the service available to customers at 400 stores throughout 2018. Scan, Bag, Go allows customers to use a wireless handheld scanner or the Scan, Bag, Go app on their Internet-connected device to scan and bag products as they shop. Kroger says customers must visit a store’s self-checkout area to pay for their goods, but payment will soon be integrated into the app.

These solutions may seem to paint a clear picture of where the retail industry is headed, but do they really? One of many questions to ask now is whether proprietary retail solutions that allow checkout-less shopping will start to raise questions of interoperability. Eventually, front-of-the-store solutions will need to mesh with back-of-the-store operations and the supply chain. Are retailers already thinking down this path as they rush to develop stores of the future? Interoperability is key to unchecked growth and innovation in a variety of vertical markets. What’s more, if each grocery and retail chain develops its own checkout-less shopping solution, will customers have to download a new app and learn a new system for each store they visit? While innovative, Amazon Go’s concept store, for now, seems to raise more questions than it answers for the future of retail.

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By | 2018-04-20T17:45:15+00:00 2/7/2018|

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