Dive Brief:
- Amazon Go, the cashier-free grocery store located at the base of the company's headquarters in Seattle, opens today, according to The Wall Street Journal.
- Amazon announced the project in December 2016, with an opening slated for early the next year. However, engineers needed time to let the system, which relies on hundreds of tiny cameras and machine-learning software, figure out how to best identify customers and process their orders. For months, the store was only open to Amazon employees.
- In an interview with the Journal, Amazon Go's head of technology said the e-tailer wants to expand the concept beyond this initial store, but has no plans to incorporate the technology into Whole Foods stores.
Dive Insight:
At a time when grocers are speeding up checkouts with scanning apps, traffic light systems and other nifty technology, here's a system that could very well be the last word in frictionless front ends.
Amazon Go was delayed for nearly a year, but early reports indicate it's performing as advertised. Shoppers scan their phones at subway-style gates at the front of the store, then fill up a bag with products and walk out. There are no baskets or shopping carts. Employees mill about the store, ready to assist customers, while in an attached kitchen a culinary staff turns out prepared meals that go onto store shelves.
The experience seems incredibly simple and intuitive for shoppers. That should erase any lingering criticism over the project's delay, which was aimed at preventing the sort of execution problems that would have been even more damaging to the concept's gleaming image.
Amazon Go's greatest promise may be as a grab-and-go meal destination. With more and more shoppers, particularly in urban areas, looking for fast, fresh-made meals — IRI data shows that more than half of shopping occasions are so-called "quick trips" — a cashier-free store offers ultimate convenience. If Amazon can execute on food quality, Go would undoubtedly have a leg up on grocery and convenience stores in high-traffic markets.
Another less-publicized advantage Go has is an ability to deter shoplifting. Although the experience feels like stealing, Amazon's technology and members-only access promises stores won't lose any inventory to theft. A New York Times reporter tried to trick the system (with Amazon's permission) throwing a bag over a six pack of soda and whisking it out of the store — only to see the product charged immediately to his account.
So how will Amazon scale this concept — assuming it continues to operate seamlessly? The company isn't being very forthcoming, and will likely relish in keeping competitors guessing, as it has with its plans for Whole Foods stores. The store's systems struggled to process numerous customers, and experts predict a grocery-store sized version of Go may be years away. But small, fresh-focused stores are gaining in popularity these days. A chain of Amazon Go stores could threaten c-stores and supermarkets across the country, and potentially complement Whole Foods locations.
The real question may be, how scalable is Go's technology? As impressive as it is, hundreds of cameras, sophisticated software and tech support may ultimately eclipse any gains Amazon could earn through store traffic. Like its most-impressive system, Amazon will continue learning as it goes along — and so will other retailers.
