Amazon is already is the biggest e-commerce company in the world, but it now also runs the most advanced retail store in the world.
In a move that could herald in the next era of offline shopping, Amazon’s futuristic Amazon Go store opens to the public today. Amazon Go stores have no cashiers — shoppers simply enter the store, pick what they want from the shelves, and leave. Cameras and machine learning algorithms determine what they’ve purchased, and automatically charge their credit cards.
It sounds like something out of a Black Mirror episode, but the technology will be available starting Monday. Amazon had earlier said that its store would’ve opened in early 2017, but the store’s opening has been delayed by a year. It’s not surprising, though, that the store has taken a while to open — Amazon says no other store in the world has the capability to do what it does. “This technology didn’t exist,” says Amazon Go Vice President Gianna Puerini said.“It was really advancing the state of the art of computer vision and machine learning.”
Amazon relies on several sophisticated technologies to bring together its dream of a cashier-less store. Customers swipe in their Amazon apps as they enter the store, telling the computers they’ve entered. Their movements are then tracked through the store through a series of cameras which detect if they’ve picked up items from shelves. Image recognition technology makes it possible for Amazon to recognize which customer has picked up which item, and items, once picked, are entered into a virtual cart. When the customer is done, they simply walk out of the store — Amazon automatically bills the credit cards associated with their Amazon accounts.
There is some potential for things to go wrong, though. During tests, Amazon had trouble differentiating between shoppers who looked alike. It also faced issues when kids entered the store, and moved items around from their shelves. There are also real-world considerations — in spite of the cutting-edge technology, Amazon must keep a human employee to check if people buying alcohol have a legal ID.
But these issues have seemingly been ironed out, and Amazon’s ready to showcase its brand new tech to the public. The new stores could be transformative — Amazon says it realized that the biggest grouse that customers have with shopping at offline stores is waiting in queues to pay their bills. By creating a store in which customers can simply walk out with their purchases, Amazon could upend how shopping it done everywhere in the world.
But more than what the stores say about what Amazon thinks is the future of shopping, more significant is what they say about its offline ambitions. Amazon is the world’s largest e-commerce company, but is increasingly looking to spread its wings in the offline world. It has 13 physical bookstores now, and last year, it bought the Whole Foods grocery chain for $11 billion. In India, Amazon has purchased a 5% stake in Shoppers Stop.
While Amazon currently says it has no plans to extend the technology to any other stores, it’s hard to imagine why it couldn’t bring it to its various offline offerings if it were to prove successful. And stores with no cashiers could prove to be a serious differentiator against its offline competitors — offline business are good at conducting retail operations, but they hardly have the technical know-how to do computer vision and machine learning. Like how Amazon had leveraged the internet to leapfrog over offline books stores two decades ago, it could use its futuristic stores to outflank offline companies in the coming years. Jeff Bezos was clearly not content with changing how shopping is done over the internet — he now wants to change how shopping is being done in the real world too.