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Looking back on the retail landscape in 2018, two little words have consistently hit the headlines: Amazon Go.
As the year began, the flagship store opened its doors to the public, introducing a new age of shopping that featured no cashiers and no queues.
Now, as 2018 concludes a further six Go sites have been established, with Amazon reportedly hoping to roll out hundreds, if not thousands more by 2021.
So, what is Amazon Go, and why the rapid takeup?
In simple terms, Amazon Go is a convenience store offering consumers access to freshly-made food and groceries. But it’s the technology driving it that has the retail world abuzz.
Rather than using traditional checkouts, consumers download the Amazon Go app to their smart phone. They scan the app at entry and simply wander the store selecting the items they need.
There is no checkout and no physical exchange of currency. The store senses what’s in a consumer’s basket and debits the shopper’s Amazon account.
Or as Amazon explains:
“Our checkout-free shopping experience is made possible by the same types of technologies used in self-driving cars: computer vision, sensor fusion, and deep learning.
“Our Just Walk Out Technology automatically detects when products are taken from or returned to the shelves and keeps track of them in a virtual cart.
“When you’re done shopping, you can just leave the store. Shortly after, we’ll send you a receipt and charge your Amazon account.”
Amazon first trialled the Go experience in December 2016, using their staff as test consumers. They spent the next 14 months honing the technology before opening the flagship store in Seattle on January 22, 2018 amidst huge media hype.
Less than a year later further locations have opened in Seattle, Chicago and San Francisco, and a New York location is also confirmed as pending.
Now, Amazon has new plans to offer a more compact version of its outlet, suited to hotel lobbies, hospitals and airports, with a concept store unveiled on December 12 at the historic Macy’s building in Seattle.
Measuring only 450 square feet (137m2), Amazon Go’s latest cashierless outlet is a fraction of the size of its previous stores with roughly the same footprint as a studio apartment.
It features a design that allows it to be prefabricated, then quickly assembled on site, and has a focus on selling salads and snacks to busy office workers.
Gianna Puerini, vice president of Amazon Go, told the New York Post this tiny format could serve office lobbies, communal floors inside tall buildings and perhaps hospitals.
“We wanted something from a design perspective that would fit nicely into open spaces,” Puerini said in an interview. “You can bring it in pieces and assemble it on site.”
Meanwhile, there are rumours Amazon is actively targeting airports as preferred sites for their mini offering, and Bloomberg recently reported the e-commerce giant is eyeing the possibility of opening 3000 stores by 2021.
“Adding 3000 convenience stores would make Amazon Go among the biggest chains in US,” Bloomberg notes.
“The internet giant is considering plans to have about 10 locations open by the end of this year, about 50 locations in major metro areas in 2019, and then as many as 3000 by 2021…”
The technology used by Amazon Go includes a combination of images, weight sensors, and input data that identifies products and determines when they’re removed from the shelf. The items are added to a virtual cart as the consumer shops in the store.
If a shopper changes their mind, they simply place the item back on the shelf and it’s removed from their virtual cart.
The experience relies on the Amazon Go app, which shoppers download prior to entry. As they enter the store, they scan the app’s QR code and can then put their phone away.
At the end, shoppers walk through a “transition area” that tallies up the value of items in their virtual cart. Their Amazon account is debited, and the receipt is sent to the app.
This approach has been heralded as revolutionary, relying on the prevalence of smartphones and geofencing technology to streamline the customer experience, as well as supply chain and inventory management.
It is also very expensive. Bloomberg notes the original Amazon Go in downtown Seattle required more than $1 million in hardware alone.
But the company could be willing to wear that cost as it looks to further its bricks and mortar expansion.
At a Washington D.C. event in early December, Amazon founder Jeff Bezos told those assembled Amazon was “very interested” in physical stores, but only if it had something new to offer.
“If we offer a me-too product, it’s not going to work,” he said.
A super-compact, cashierless convenience store might just be that new offering.