Amazon Go: How Far Can It Go?
Amazon has many lines of business in its bid to be the largest and most customer-centric company. One unexpected area in which it has publicized a new vision is in-store shopping.
On January 22, 2018, Amazon announced a new concept in physical shopping called "Amazon Go." Imagine walking into a convenience store after identifying yourself using an app, similar to scanning a barcode at the airport. As you walk through the store, you take items from the shelf, put some back after looking them over, put some in your basket, and even return some to the shelf from your basket after finding a more desirable item elsewhere in the store. You then leave the store without stopping at any cash registers, with the receipt available in the app.
This feat is accomplished with hundreds of cameras in the ceiling that carefully watch you, your items, and your basket. Weight sensors and shelf cameras reveal products removed or replaced. The monitoring process is managed by image recognition, artificial intelligence, and machine learning. A 3D representation of each customer is built and tracked. Amazon assures that after the checkout process is complete, nearly all of the data are discarded.
Amazon states that shoplifting is virtually impossible with such technology. Matt McFarland, a CNN reporter, tried to fool the system for almost an hour by pointing closely at items, covering up scanning symbols, and grabbing products from behind his back. Amazon told him that errors are highly infrequent.
A major benefit includes reducing or eliminating the need to hire cashiers. However, there is no research to suggest whether the personnel savings will cover losses in sales of convenience items placed near cash registers. There could be new opportunities to upsell and cross-sell customers through the app, suggesting complementary goods or deals. This is analogous to the Amazon.com site suggesting products based on past behavior. Future research will likely investigate if AI-driven sales exceed those of waiting line convenience items like gum or magazines.
The future seems to hold many opportunities for the concept. Amazon has secured patents for several technologies used to operate the stores and plans to open 3,000 in the United States. However, Jim Kenney, Mayor of Philadelphia, signed a bill banning cashless stores to avoid limiting access to low-income customers, prompting Amazon to agree to accept cash in its Amazon Go stores.
Which of these risks should be of greatest concern for Amazon Go?
1) Lack of customer acceptance
2) Data security breaches
3) Increased competition
4) Technological glitches
