Some thoughts on Amazon Go Retail

Amazon today launched its new retail store, which doesn’t have any people manning the shelves. An automat, from a company that is all about making shopping friction-free, is an obvious first step in reshaping the American retail experience. Back in 2010, when I said so, everyone thought I was out of my damn mind. That era has come and gone — today is about friction free shopping – an extension of their one-click shopping and Amazon Prime concepts. 

First what is Amazon Go: It is an 1800 square-foot retail outlet in Seattle with no staff, where you can grab and go and where you get billed directly to your Amazon account. It offers everyday grocery staples, ready-to-eat meals, snacks and Amazon Meal Kits. Here are some of my thoughts about the new Amazon Go store and what it means, both from a technology and a business perspective:

  • First the caveat: if you have been to Japan, you’ve experienced a 1.0 version of this type of shopping experience.
  • Amazon Go Retail is an experience shaped by multiple sensors and computer vision, thus making it one of the most audacious technology experiments to date.
  • Chinese technology companies are far ahead of Amazon and they have more highly-evolved multi-sensor technologies and are working on a much larger scale because they can correlate more data especially that coming out of the mobile phones.
  • Since this uses Bluetooth beacons and a few cameras, it is also a showcase for Amazon Cloud and its abilities to analyze real-time information streams, including video streams.
  • The Amazon Go experience is also going to introduce real-time video into Amazon AI and help further enhance their computer vision capabilities.
  • The store was in trials for 14-months and had some teething problems around the customer ability to grab and go. The tracking technology wasn’t up to par, but now it seems to have hit the sweet spot to be released in the real world.
  • Bloomberg had previously reported that Amazon employees wore Pikachu costumes and tried to fool the automatic purchase system.
  • Amazon’s delayed Go launch also showed how hard it is for them to develop tracking in real time and correlating it with objects, and shoppers. Really impressive work here. I want to learn exactly how they did it. Also wondering what it says about the tracking experience in fast-moving vehicles and other such noisy environments.
  • Amazon Go for me is an augmented reality experience — sensors augmenting the human interactions with objects — adapted for retail.
  • It reduces the friction in the checkout experience, and in many ways, this will be the model of how smaller, more focused retail chains of the future will be built.
  • Amazon Go at Airports will be the obvious extension of this business, but I don’t expect to see the Go everywhere at least for a few more years.
  • There will be teething problems — billing errors and other such issues might make us initially skeptical of the service, but like everything else in society, we will be happy with “good enough.” With more data and better trained neural networks, Amazon will see accuracy go up and as a result, it won’t have to deal with errors as much.
  • These days, the death of the malls and department stores is reflective of the rise in online commerce but also consumer expectations of a retail experience like an Apple store. I won’t be surprised if Amazon Go will change consumers expectations of a retail experience.
  • The current retail industry insiders will come up with excuses around why Go won’t work and why Amazon hasn’t figured out the complexity of the problems. Just like they said Amazon Cloud is for kid-apps and it wouldn’t scale and won’t be a real business. I was an Amazon skeptic in 1998. By 2002, I had changed my mind. I am a Bezos Believer.
  • But not everything is business, and there are social implications. America depends heavily on retail and service industry jobs and we don’t really have any other professional options for this part of society, which is being pushed into what was considered the “underclass” in third world economies.THIS WORRIES ME NO END, and frankly this is where I see lack of empathy in tech becoming more obvious.

To wrap things up: retail is going to be different going forward. It is not just a business of “location location location” and real estate anymore. It is about data, real-time analytics, predictive consumption behavior, computer vision and a world where sensors do track everything we do.

A letter from Om

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