Amazon Go is ready for its public debut. Will it be the future trend of physical grocery stores?
There were initial setbacks for Amazon Go
Amazon Go launched its beta in downtown Seattle in March 2017. Amazon engineers used computer vision, deep learning algorithms, and sensor fusion to identify the selected items. These items are then charged to the consumer’s Amazon account.
During the beta stage, the system failed when the store had more than 20 people. The engineers had to debug and resolve the technical issue.
Amazon is prepared to launch the check-out free store
Will Amazon be a game changer for the retailing industry?
On average, Amazon management plans to use six people per shift for Amazon Go stores. Going cashier-less means depending on automation and software to do most of the heavy lifting. In 2013, the average U.S. supermarket stores had on average 72 full-time equivalent employees. Considering the minimum wage tracker of US$7.25 in America, this will be a significant cut in labour costs.
Amazon has spent millions of dollars on the “just walk out technology”. This means Amazon may not breakeven in the near term, especially when the grocery industry has low margins of about 1-3% in average.
Amazon Go is not the first to embrace cashier-less technology
QueueHop is a Radio-Frequency Identification (RFID) anti-theft apparel security tag that automatically unlocks after payment is made. Customers can self-checkout on their phones by using this technology.
Alibaba’s Tao Café in Hangzhou is a similar version of Amazon Go. The engineers combine automated visual sensors and facial recognition to reduce error rates.
Consumers only need to scan the code using Alipay application to enter the shop. When they leave the shop, the checkout machines recognise the selected products and process payments through Alipay.
In January 2016, Alibaba management set up the first cashier-less Hema supermarket in Shanghai. Hema supermarket offers consumers seamless blend of the online and offline shopping experience. Each item has a barcode. Shoppers can use the Hema application to scan the code to pay.
Screenshot of the “Hema” app
Customers can also shop from home using the Hema app. The purchased items will be delivered within 30 minutes. “Hema leverages data and smart logistics technology to seamlessly integrate online-offline systems, built to provide the unparalleled service of fresh food deliveries in 30 minutes”, said Alibaba Group CEO Daniel Zhang.
Cashier-less stores will become mainstream in the near future with Amazon and Alibaba taking the lead in the West and in China respectively. Cashiers should expect to lose their jobs within a decade.