Amazon has just taken another step towards owning your entire shopping experience, by opening the world’s first supermarket where you just pick up whatever you want and leave.
As shown in the video demonstration above, Amazon Go is a pilot test concept store in Seattle where Amazon is testing out the technology for a fully checkout-free grocery experience.
The way it works is that you enter the store by scanning an Amazon App on your phone, after which hundreds of sensors and cameras in the store will begin tracking you as you walk around the shop and sense what you touch, look at and pick up.
If you pick something up off the shelf, the system will add that product (whether it is a salad, soft drink or anything else in the shop) to your checkout list as you carry it around. If it sees that you have put it back, even if you place it back in the wrong shelf, it will remove it from your checkout list.
Then when you walk out of the store carrying whatever you want, it will charge your credit card for everything you have picked up.
With Amazon having recently bought Whole Foods for $13.7bn, these physical retail locations will likely serve multiple purposes:
- Act as standalone retail offerings
- Become distribution hubs for metro locations for fast-delivery services (like Amazon Fresh)
- Become service and retail locations for other Amazon products and services (like Echo and Prime)
- Collect even more data on customer behavior to better target product promotions
- Develop their “no checkout” sensor technology to be licensed for other retailers
The technology underpinning Amazon Go may be groundbreaking, but it isn’t yet perfect. Hence why they are using this first pilot to learn and improve the system.
People are already beginning to find ways to try to trick the system. For example, Linus Tech Tips released the following video after the store opened, showing how simple it is to leave the store with something, claim you didn’t actually purchase it and that it was charged as a mistake, and instantly get reimbursed. (This is how they managed to essentially steal a box of tampons).
But while Amazon learns from the store and finds ways to improve the systems, it is only a matter of time before they get it to the stage where it works well enough for real-world use.
And this is where their innovative technology opportunity could really disrupt any retailer who currently employs sales assistants or checkout staff (i.e. almost every retailer).
Much like how it initially developed the IT infrastructure to run its own services and then allowed other companies to use it in a cloud-based licensing model (Amazon Web Services), I see Amazon looking to offer the technology to other retailers who want the benefits and data that comes with a checkout-free system. This could become another 9-or-10-figure revenue source for the retail behemoth.
But until then, if you do manage to try out the pilot store, just be honest and put the tampons back on the shelf if you don’t want them.
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