Amazon Go: The Future of Retail?

Amazon Go, Amazon’s new brick-and-mortar retail initiative, caused a media frenzy when its first location had a soft opening for Amazon employees in 2016. The store offered a revolutionary take on the classic corner store: no lines, no cashiers, no cash registers. Just go in, pick what you’d like, and walk out.

The idea sounded crazy to many (including myself) at first. How could this possibly work? It seemed like a godsend for thieves. However, if any company could pull off something as ambitious as a cashier-less retail store, it would be Amazon.

Here we are a little over one year after the first store was opened to the general public and Amazon has already opened nine more. Amazon Go locations are now fully operational in Seattle, San Fransisco, and Chicago, offering Amazon account holders access to a wide array of on-the-go options.

The Amazon Go Experience

Before going to an Amazon Go store, shoppers must download the Amazon Go mobile application, which is available on both iOS and Android devices. This application will prompt users to first either log into their preexisting Amazon accounts or create a new account with basic information and a payment method.

Once your account is logged in, you use the unique QR code to scan in and gain access into the store. If you are traveling with family members or friends, you can also scan them into the store using your account. Once scanned, you have free-range of the store. Everything you pick up and put in your bag will be automatically added to your virtual cart. If you have second thoughts and put an item back on the shelf, it will be removed from your cart. When you finish shopping, simply walk out the door and a digital receipt will be sent to you shortly.

The Technology Behind It

These Amazon Go stores are equipped with a high-tech network of sensors and cameras that track each customer throughout their shopping experience. The shelves are equipped with weight-sensors and cameras that work together to identify when an item has been removed from the shelf and uses artificial intelligence to comb through this data about the item’s physical weight and visual appearance to infer which item has been removed. Over time, machine learning will allow the artificial intelligence to evaluate lots of data both from the individual’s and other customers’ past transactions to make very quick, accurate analyses of data.

A series of Bluetooth beacons tracks customers throughout the store, updating their virtual cart and relaying the information gathered by the artificial intelligence to the user’s mobile device.

The series of sensors on the ceiling at an Amazon Go store.

Pros of Amazon Go

Like much of what Amazon does, this will improve the shopping experience for customers. Fewer lines mean less time wasted waiting for a free cashier during peak hours (pre-work, lunch, and evening). According to the New York Times, Americans spend roughly 37 Billion hours each year waiting in line. Saving even a fraction of this time could improve both happiness and productivity for Amazon Go shoppers. On top of time savings, there could be cost savings due to the fact that the stores require fewer labor costs (cashiers, baggers, etc.), and this could theoretically be passed onto the consumer.

In addition, since everything is paid for using your Amazon account, not having to carry around physical cash or credit cards could lessen the risk of misplacing or having these valuables stolen from you.

Cons of Amazon Go

The data security risks with this type of technological infrastructure cannot be ignored. The use of Bluetooth communication between devices in this store could potentially open up devices to potential hackers, as shown by Tech Crunch in 2017. If the data involved in these transactions and in shoppers’ Amazon accounts were to be breached by bad actors, it would not be good for any party involved.

Many will fault this new operating model for retail stores as a “job killer” because it eliminates the need for the low-skilled job of cashiers and baggers. However, with this job loss, there are many other jobs created in food preparation, inventory stocking, inventory management, and information technology.

Other Applications

This application of QR code scanning technology (which really is nothing new) linking to a unique user profile could be used in many different applications outside of the retail space. Think: basically anywhere you have a line. With a bit of tweaking and customization, this same concept could be applied to doctor’s office waiting rooms, airports, banks, salons, and gymnasiums to name a few. This technology could eliminate customer friction and bottle-necking in many industries.

The sensor, AI, and machine learning technology were created outside of the retail space and most applications for it are also outside of this industry. It would take ages to detail each and every potential application from self-driving cars to robots in this blog post so I will spare you the time. The point is that this type of innovation by Amazon could potentially disrupt many different industries outside of retail. Hopefully, we can experience this technology first-hand during our visit to San Fransisco in a few weeks.

15 thoughts on “Amazon Go: The Future of Retail?

  1. Really cool post. This whole concept has always fascinated me, but its not hard to see the benefits. Also, since Amazon has now acquired Whole Foods, I wonder if there has been a master plan all along to implement this technology at such a massive scale through Whole Foods. I am sure that there would still be a while until we see this, but it could definitely be a possibility.

    Liked by 1 person

  2. Neat post George! I’m also a little bit curious to see the logistics of how this works like in practice. For example, what do Amazon Go shoppers do if they want to return something? Reducing the need for workers would make customer service like returns tough for the shoppers. Also, I wonder what Amazon Go would do when the shoppers’ phone dies and they can’t be tracked or checkout through their phone. With all of these questions, it seems like this structure is complex could be difficult if not handled properly.

    Liked by 1 person

    • I was wondering the same thing about what happens if the shoppers’ phone dies. Also, if the wifi or bluetooth is a little patchy one day, will the store have to close? Technology is sometimes unpredictable, so it seems risky to have an entire store revolving 100% around it.

      Liked by 1 person

  3. I think the idea of Amazon Go stores is so unique and something I never would have though to be feasible. When I was in Seattle this summer I went to the original Amazon Go location, and honestly it was kind of underwhelming. But the thought that this is how all in-store shopping could be one day is what is really crazy!

    Liked by 1 person

  4. Nice post. I wonder if this is something the government would ever consider supporting? Since people spend so much time waiting in lines, U.S. economic productivity could drastically increase with technological advances that would limit line waiting. The same concept could apply to technologies that decrease traffic such as Elon Musk’s underground tunnel.

    Liked by 1 person

  5. Amazon is always at the forefront of using AI so I guess it’s no surprise to see them capitalizing on it here. The sheer level of tech here seems remarkably impressive. Granted it appears like it’s all toward just eliminating the need for checkout lines, so I’d imagine they’re definitely doing this for the long term cost benefits since there has to be a lot of fixed costs. I’m curious on how they even test and QA this software.

    Liked by 1 person

    • They did open it for the first year only to employees, so I think they fixed a lot of bugs, etc in that year. If an employee didn’t get charged for something, it’s no big deal after all (probably).

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  6. Since the sensors can easily pick up what you put into your bag, isn’t it also scary to think that you are being constantly watched? Not by an actual person of course.
    The technology itself is really cool though. I wonder if other major chains of grocery stores/department stores will adapt this technology? And what it mean to the smaller local retail stores that couldn’t afford the technology? Will these smaller stores lose their competitive edge? I remember back in Hopkinton, MA, when the first CVS came into town, a local drug store soon went out of business because it simply didn’t stand a chance against the big brand.

    Liked by 1 person

  7. I love the technology, but do experts have an estimate of how long will such technology be implemented in mainstream markets? In recent years, stores like CVS and Starmarket just revolutionized their checkout system through self-checkout machines. I wonder if Amazon actually see a future in selling the technology or just trying to be a “tech giant” in selling concepts.

    Liked by 2 people

  8. Amazon Go stores are the sort of thing I wouldn’t have thought possible– until they did it. It’s amazing to think that technology has advanced sufficiently that tracking the items people pick up off up and put down on shelves to such a degree of accuracy is possible. I would love to see it in self-checkout machines– no more “please place the item in the bagging area” recordings.

    Liked by 2 people

  9. Cool post George! Like everyone else, I never thought this would be possible because it is hard to imagine an eventual society with no interaction during a shopping experience. What happens if you can’t find an item you’re looking for? Will this style of shopping eventually cause society to be less social and interactive? Lots of questions to be tested and answered before everyone accepts this model, but definitely an idea with potential!

    Liked by 1 person

  10. Solid post. Looking forward to visiting one of these locations. Interesting to see how these groceries will tie into Amazon Prime and its grocery delivery service. I wonder how older shoppers will adopt to this new type of grocery store. How will some less tech savvy find their specific products? This definitely appeals to younger and tech welcoming shoppers.

    Liked by 1 person

  11. This is a really interesting concept and you explained it all well! Although Amazon tested it out with its employees, I’m wondering how successful it really is in real world situations. For example, if a parent goes into the store with a child and the child starts picking things off the shelf, will those items be tracked back to the right consumer?

    Liked by 1 person

  12. Great post George! I think Amazon Go is definitely a great example of the trend that retail is heading towards. As people are starting to realize from their online shopping experience that many retail stores can’t really be replace by e-commerce (like fresh produce, furnitures etc.). The solutions for these retail sectors are similar in terms of using the most powerful technologies (AI, AR, VR etc.) to help improving customer experience. And this is where Amazon did a great job in seizing the market.

    Liked by 1 person

  13. I have seen a similar but less sophisticated implementation in China. In some major cities, people can walk in some convenient stores where there are QR codes for each items. Customer will just need to scan the code and the item will be unlocked. When they finish shopping, customers can simply scan the checkout code and automatically pay as them walk out. There is no shop assistance needed for this store. It’s just amazing to see how automated our world is becoming!

    Liked by 1 person

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