The future of groceries?February 25, 2018 @ 2:02PM
By OON YEOH
“JUST walk out. No lines. No checkout. (No, seriously.)”
That’s the tagline for Amazon Go, the online retail giant’s first foray into physical grocery stores. Amazon has been disrupting the retail industry since the mid-90s, at first as an online book store and eventually as an online store that sells virtually everything under the sun.
Now, it’s trying to reimagine how grocery shopping should be done. Ask any grocery shopper what their number one pain point is and they’ll tell you it’s queuing up to pay. Amazon has a solution for that and it’s got nothing to do with e-commerce. No, Amazon has reinvented the grocery store into something befitting the 21st century.
Amazon’s first physical grocery store is not Amazonian at all, at least not in terms of size. It’s actually a smallish food market, selling mainly ready-to-eat items and beverages. And it’s located on Amazon’s campus in Seattle. It would probably be fair to describe it as a pilot project or proof-of-concept. But it’s real and it’s gone live. The store, which had been beta-tested for a year by Amazon employees, opened its doors to the general public last month.
Cashier-less shopping is nothing new. This concept has been in place in Europe for some time now. But the way Amazon is doing it is completely new. Customers gain entry into the store using an Amazon Go app on their smartphones. They just pick up whatever they want and leave the store. Just like that.
They don’t have to stop and scan anything. What they’ve taken will automatically — almost magically — appear on their virtual shopping cart (and it will be removed if they place the items back on the shelves). Once they leave the store, their Amazon accounts will be charged for whatever they’ve taken.
How do they do it? The company hasn’t revealed in any detail how the technology works although we do know that the store contains hundreds of cameras and electronic sensors to monitor every step you take and every move you make. Amazon calls it “Just Walk Out Technology” and likens it to driverless car technology, involving computer vision, sensor fusion and deep learning.
Shoplifting isn’t a problem
A natural question many people have when they think of driverless cars is whether there’ll be accidents. Of course accidents are bound to happen but apparently it occurs very infrequently compared to human-driven cars.
Similarly, people will naturally wonder if theft will be a big issue with cashier-less shopping. The New York Times famously tried to test this and found that it was actually hard to shoplift in Amazon Go.
A reporter from CNBC named Deirdre Bosa actually inadvertently shoplifted when the system failed to charge her for a container of yogurt and she tweeted about it. Amazon didn’t seem to care, perhaps because they deemed the incident to be a rare glitch.
“It happens so rarely that we didn’t even bother building in a feature for customers to tell us it happened,” Gianna Puerini, Amazon Go’s vice president told CNBC. “I’ve been doing this a year and I have yet to get an error. So we’ve tried to make it super easy on the rare occasion that does happen — either to remove it or enjoy breakfast on us.”
But even if shoplifting is impossible or very difficult, the feeling one gets when shopping there for the first time can be very surreal. Many media reports have quoted customers as saying walking out of the store without scanning anything made it feel like shoplifting.
The fact that you don’t even have to put the items in a cart or shopping bag — you can just put them in your pocket or handbag — only reinforces the sense that you’re somehow taking something without paying for it.
But of course you’re paying for it. Once you walk out, your smartphone will be updated with a receipt together with a trip timer that tells you how much time you spent shopping, down to the second. I wasn’t kidding when I said the store’s cameras and sensors monitor every breath you take and every move you make.
The store’s ability to track everything you do brings into question the issue of privacy. We’re all used to the idea that stores would have surveillance cameras. But over 100 cameras in an 1800-square-foot store? Sounds like overkill but it’s necessary for Amazon Go to do what it does, which is to give the customer the ultimate convenience in grocery shopping.
For sure some people will be ‘creeped’ out by this but judging from press reports, people can’t wait to get into Amazon Go. There’s no line for getting out of the store but apparently there are long queues for getting into the store! Obviously, people are intrigued by the novelty of the “Just Walk Out Technology” to care about their every movement being tracked. The social media generation doesn’t really seem to care much about privacy anyway. Speed and convenience are what matter to them!
Interestingly, Amazon hasn’t given any indication of what it plans to do with this technology. The natural assumption is that it will apply it to the Whole Foods Market chain of high-end grocery stores it bought last year but Amazon has said there are no immediate plans for that.
Or could it be that it will license this technology to other grocery chains across the USA and perhaps even around the world? It’s possible. After all, after developing sophisticated and efficient server farms for its own use, Amazon created a brand new business out of cloud computing. But if licensing the technology is part of its corporate strategy, the company hasn’t given any hint of it so far.
What’s clear though is that this technology has the potential to revolutionise not only grocery shopping but physical retail in general. Think about it. In the past, the only way physical stores could track what consumers are buying was through loyalty programmes where customers had to produce a card to be swiped (in return for discounts or points). With Amazon Go, the company can know in far greater detail about consumer shopping behaviour without relying on any loyalty programme whatsoever. It’s all being tracked on hundreds of cameras and sensors!
It’s worth noting that Amazon isn’t the only player in town although it is the 800-pound gorilla. There are some start-ups aiming to do the same thing. Standard Cognition, whose tagline is “Skip the line”, is developing something similar using cameras and computers to track customers’ movements. Their aim is for customers to “Walk in. Grab stuff. Leave.” Another start up called Aipoly, which also uses camera technology coupled with computers, aims to create “fully autonomous markets” with “no queues, no checkout”.
Welcome to 21st century shopping!