Grocery Shopping, Amazon Go

By Praweenar Princess Thadaphrom

Yesterday’s Cyber Monday was the largest online shopping day in U.S. history. Amazon was the sales leader, yet the company is looking to extend their reach beyond traditional digital retail.

I personally like going to grocery stores, but one thing that bores me is when I have to queue up at checkout. Self-checkout is still not the final answer for those lacking patience like me. When Amazon announced that it was launching a cashier-less grocery store called “Amazon Go,” I was all ears. As a shopper, I am intrigued and excited about this emergent technology Amazon is trying to introduce to the grocery world. As a designer, I am curious how it is going to work. And as a communicator, this technology increases my curiosity as to how Amazon will communicate this human-less tech to their consumers. Let’s find out what Amazon Go is and the implications of this emergent technology.

What is Amazon Go?

Amazon Go is a prototype grocery store operated by Amazon.com [1], an American electronic commerce and cloud computing company based in Seattle. It is a new kind of store with no checkout required, giving consumers new shopping experiences using the world’s most advanced shopping technology called “Just Walk Out” which allows consumers to just grab and go without stopping to scan or pay.

The first store was scheduled to be introduced to the American public in Seattle in 2016, but the opening was delayed due to technical difficulties. The latest report said the system is working well for individual shoppers but still struggles to accurately charge people who are moving around in groups, such as families with grabby kids. Amazon Go engineers have been studying families shopping together and are tweaking their sensors to recognize when a child eats an item while wandering around the store. Engineers are also figuring out which person to charge when a couple goes shopping together. It is still unclear when the first store will officially open, but it surely is bringing excitement to grocery shopping once again.

How does Amazon Go work?

The new checkout-free shopping experience is made possible by the same types of technologies used in self-driving cars: computer vision, sensor fusion, and deep learning algorithms. The Just Walk Out technology automatically detects when products are taken from or returned to the shelves and keeps track of them in a virtual cart. Basically, the store uses machine learning and cameras to detect what’s in your cart and automatically charge your Amazon account so you can leave the store without ever taking out your wallet. Shortly after leaving the store, your Amazon account will be charged and receipts will be sent to you electronically.

All you need to shop at Amazon Go is an Amazon account, a supported smartphone, and the Amazon Go app.

What can you find at Amazon Go?

The store offers a wide array of consumer goods including ready-to-eat breakfast, lunch, dinner, and snack options. The store’s selection of grocery essentials ranges from staples like bread and milk to artisan cheeses and locally made chocolates.

Why mortar-and-brick store?

Online grocery is only a small fraction of the entire grocery market in the US. The portion of US households that bought food online was about 23% in 2016 [2]. Because Amazon is looking to generate higher revenue from grocery, it needs to have an actual building. Moreover, consumers still want to see and feel the products they are buying — a particularly important factor in purchasing groceries. This means that for Amazon to gain a foothold in the grocery segment, a physical presence will be crucial.

Who will be affected moving forward?

Despite all the positives, there is a downside to the Just Walk Out technology. Millions of jobs will be lost. The world’s most advanced shopping technology means the end of check-out positions across the entire retail industry. In 2015, the Bureau of Labor Statistics reported that cashiers are the second-largest occupation, with 3.4 million people employed in the US, making up almost six percent of total U.S. employment [3].

In addition, the micro market industry, which has been expanding at a healthy clip since 2008 [4], could be impacted by Amazon Go. A micro market is a self-contained store in a location without an employee to monitor it. It includes freestanding storage, such as shelves that hold product, and a self-checkout kiosk. The customer scans their package and pays at the self-checkout kiosk. The micro market offers significantly more variety than a vending machine bank and is more convenient. Amazon Go accomplishes much of the same purpose as a micro market with fewer steps on the part of the consumer.

Amazon Go will obviously disrupt the retail industry. Amazon wants to be the Amazon Web Services (AWS) for retail stores, having already convinced online retailers to trust them with AWS for their web hosting and today a vast majority of commerce sites use this service [5]. With a long-term goal of becoming the number one technology supplier for all online and retail commerce, it is clear that Amazon will license the Just Walk Out technology to small and large retailers just as it has licensed the AWS technology.

Amazon will also be looking to have the Just Walk Out technology installed at Whole Foods outlets after it bought the chain for 13.7 billion dollars earlier this year. Such acquisition was a sign that Amazon wanted to make a physical presence in the grocery industry.

Amazon Go Infographic: Page 1, Page 2

Sources

[1] https://www.amazon.com/b?node=16008589011

[2] http://www.businessinsider.com/amazon-go-opening-delayed-2017-3

[3] https://www.bls.gov/opub/ted/2016/retail-salespersons-and-cashiers-were-occupations-with-highest-employment-in-may-2015.htm

[4] https://www.kioskmarketplace.com/blogs/how-amazon-go-is-reinventing-retail-and-its-possible-impact-on-micro-market-kiosks/

[5] https://medium.com/@brianroemmele/how-amazon-made-the-amazon-go-magic-9273f6ffe8

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