12/08/2016

Can Amazon Go change the Future of Retail?

The Future? Yes! Amazon Go store is a radically new type of grocery store: A store with no checkout counter. All you need is the Amazon Go app to enter the store and start shopping. If all goes well Self-checkout would be the next big innovation in retail environment after the credit cards.

What is the current Retail scenario?  

Bottlenecks at the checkout counter - Impatient shoppers funnel to cashiers - Overworked but less paid cashiers - Low-margin profitted but wage-burdened Retailers

What would be the Amazon Go scenario? 

No more cash register, no cashiers, no lines and absolutely no fumbling for a credit card. One can simply walk in, grab the stuff you want and walk out. Can it get more easy than that? Amazon’s advanced AI competence can handle everything related to the payment and checkout processes of shopping smoothly.

How would Amazon Go work? 

The Promotional Video on Amazon Go does not explain much. Given the state of artificial intelligence, RFID, sensor and machine learning technologies today and the patents applied by Amazon in 2014, let's check out a rough idea.
Consider a shopper "Mr.X".
  • Amazon Go app may tie Mr.X to his identity and may trigger tracking features once Mr.X steps inside the store with his smartphone. 
  • To track Mr.X through the store, either cameras equipped with facial recognition or bluetooth radio signals from his phone might be used.
  • To detect Mr.X's interaction with products on the shelves, cameras and pressure-sensitive shelves might be used. 
  • To verify individual items bagged by Mr.X some kind of RFID might be made use. 
  • Finally each item Mr.X has chosen will be tallied and be billed to his Amazon account. 

Possible Drawbacks of Amazon Go Scenario

  • Figuring a way to identify individual shoppers and track their purchases as they leave the store with 100 percent accuracy is a problem that’s hard to solve.
  • When we shop for two or three items, Self-checkout is comfortable and fine.
  • When Mr.X shops for a cartload, he probably would expect some help with the bagging. 
  • When Mr.X shops for certain food like vegetables, that are priced by weight, there is a real complication. 
  • Grocery shoppers often put things back in the wrong aisle. Amazon may mistakenly charge Mr.X for something he didn’t buy. 
  • Theivery is the biggest problem yet. Most stores deploy tools like video analytics and beacons. Statistically, the goods hauled away by self-checkers is twice the ripoff rate when human clerks are around. 

The Future 

It won't come as a surprise if the Grocers, who work on thin profit margins, are not ready to share Amazon's willingness to lose hefty amount on this innovation. So it is safe to say that Instant shopping is no immediate danger to Cashiers around the globe.

Amazon Go Beta

Presently, the only Amazon Go store operating in Beta mode is at Amazon's hometown Seattle, and available only to the Amazon employees. It’s hard for Amazon to go wrong when it has control over the space, it's infrastructure, products in it and who goes in there.
But the real scenario may be very different, when it opens up for civilians in early 2017. How Amazon will overcome all the hurdles mentioned above, remains to be seen. Still, that’s what betas are for and nobody else is Amazon.