January 23, 2018
The opening of an Amazon physical retail store is cruel irony for its competitors and an inflection point for consumer IoT.
As if it’s not enough that Amazon has taken massive chunks of business from pretty much every retailer in countries where it operates, the etail giant now fancies a go at the one area it doesn’t currently dominate: bricks-and-mortar shops. It’s called Amazon Go and the first one has just opened its door in Seattle.
Amazon has decided not to issue a PR about the store, perhaps because it opened a year later than originally planned, but did invite plenty of media. Somehow Telecoms.com fell off the invite list, for which Jeff Bezos is presumably remorseful. Some reports lazily reflected on the irony of there being queues to a shop that is supposedly designed to eliminate queues, but most were cautiously excited at this fork in the consumer IoT road.
The big deal about Amazon Go is that it’s cashier-free. You simply enter the store, grab what you want, and leave. It’s all about your smartphone and sensors: you scan your Amazon Go app to enter the store and then a bunch of cameras and sensors that would make Big Brother green with envy track what you grab and walk out with. Your Amazon account is then automatically charged for what was in your possession when you leave.
The smartphone bit is pretty straightforward, although this does mark a milestone in the use of it as a physical shopping tool. The tricky bit is knowing exactly what you walked out with. The use of cameras and shelf sensors has the feel of an interim technology until consumer IoT ramps up and becomes affordable at scale. Once every product has its own embedded sensor then cameras will presumably be needed only for security and dispute resolution.
CNBC gave the store a go and found that one of the items it walked out with didn’t appear on the subsequent Amazon bill. They confessed the error immediately to Amazon, which knew a PR opportunity when it saw one and said ‘don’t worry about it’, as did the brand concerned.
This store is clearly designed as a prototype and a dress rehearsal. There will be flaws and the only way to fully stress test a new technology is to introduce it into the field. Giving away one or two yoghurts is one thing, but that error rate needs to be as close to zero as possible.
This also serves as a very conspicuous illustration of the concerns around automation. If this concept takes off then a lot of retail cashiers are going to lose their jobs and it’s not immediately obvious what fresh employment opportunities might be generated. A lot of the shelf stacking at Amazon warehouses is already done by robots so maybe that will be the case in bricks-and-mortar stores too, before long.
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