Eye on AI - February 28th, 2020
Welcome to Aigora's "Eye on AI" series, where we round up exciting news at the intersection of consumer science and artificial intelligence!
This week, we’ll be discussing the blending of traditionally binary categories of online and offline shopping within technological spaces, with a particular focus on the implications of Amazon’s new full-size cashier-less grocery store, which they’re calling “Amazon Go Grocery”.
“Amazon Go Grocery” Launches, Upending the Traditional Shopping Experience
All eyes have been on Amazon this week, as the massive retailer prepares to open its first full-sized cashier-less retail store in Seattle. The move, as outlined by Reuters in their article “Amazon expands physical footprint with bigger cashier-less grocery shop”, marks what many believe to be the official beginning of a new hybrid offline and online retail shopping experience.
“The new format reflects Amazon’s ambitions to capture more of shoppers’ weekly spend through groceries, increasing competition with national players Kroger, Albertsons and others,” writes Reuters reporter Jeffrey Dastin. “…. As with Amazon’s convenience stores, customers scan an ‘Amazon Go’ smartphone app on a gated turnstile to enter and start shopping. Hundreds of ceiling cameras and shelf weight censors ascertain what customers add to their carts, and their on-file credit cards are billed once they leave the store - no cashiers or checkout lines necessary.”
The cashier-less retail game is nothing new for Amazon, which launched a version of the “Amazon Go” concept in 2018. What is new is the scale. The new “Amazon Go Grocery” location is four-times the size of the original, as noted in the GeekWire article “Inside ‘Amazon Go Grocery’: Tech giant opens first full-sized store without cashiers or checkout lines”.
“...the concept is very similar to the Amazon Go (which) has expanded to 25 locations across cities including San Francisco, Chicago and New York,” writes GeekWire’s Kurt Schlosser. “That smaller concept, sized between 450 and 2,700 square feet, ushered in an era of grab-and-go shopping… What Amazon is looking for is yet another answer to traditional retail, where it’s leveraging convenience and technology in a $800 billion U.S. grocery industry.”
What’s the Big Deal About Amazon’s New Cashier-Less Grocery Store?
If you’re finding it difficult to see the enormous competitive advantage of Amazon’s new cashier-less grocery location, consider what’s behind the curtain. As noted by The Spoon in their article “Report: Amazon’s Grocery Store Will Have Robotic Fulfillment”, the move reflects Amazon’s ambitions to capture shoppers’ weekly spend through data collection. By better capturing customer shopping habits through data, Amazon is able to mine that data for better insights into customer purchasing decisions, allowing them to better market and deliver their products. This, in turn, leads to more sales. If the cashier-less grocery store proves successful, Amazon could move to export the concept to other retail projects, or to other grocery retailers.
“The Wall Street Journal points out that a person close to the company says Amazon is offering to sell and setup the technology in other grocery stores,” notes Inc reporter Jason Aten. “Amazon likes having it both ways. It would be happy to sell you some groceries, but it would be even happier to sell its technology to the thousands of existing grocery stores across the country.”
As Walmart and other retailers move to match Amazon’s robot fulfillment at scale, Amazon is keeping quiet on its plans to expand.
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