I’m impressed that Amazon scaled their Go concept to a larger grocery footprint – I was skeptical that it would scale, and I still am. Last fall Amazon announced that it was planning to open 3,000 Go stores, but have only opened 20 to 25 locations so far. The slow growth rate is telling. When the first Amazon Go store opened, my primary concern was regarding the enormous amount of technology required to operate the small 1,200 square foot convenience store, and my concerns are the same with Grocery Go – at over 10,000 square feet in size, the number of cameras/sensors required to cover this space must be mind-boggling. While I have no doubt this type of cashier-less store experience will be part of retailing in the future, the cost to deploy and maintain the current technology required to deliver the experience is prohibitive for most retailers.

Whether or not the grocery concept works will come down to the usual non-technological factors: price, assortment, layout, availability and so forth. At first glance, most of these look solid. The technology does give Amazon an edge: it’s arguably quicker and more convenient for the shopper and more efficient and cost-effective for Amazon. This gives Amazon a near-term advantage over rivals, especially traditional grocers with legacy stores. That said, I expect this technology to become far more widespread over the next 10 years.

Convenience is the next step for grocery. As shoppers get more and more convenient options with home delivery, they will expect their experience in the store to be equally seamless. We will see the front end revolution take place over the next 10 years, as Andrew Yang predicted, as computer learning and AI play more of a role in our in-store experience.

It is a good live laboratory. Amazon is one of those companies fortunate in that it can spend, test, and spend some more until it either get its right or abandons a concept. And even if Grocery Go doesn’t stick now, the concept may come back in a better format later on. Remember Apple’s Newton?

It is impressive to see the cashier-less concept working in larger format stores. The Amazon Go stores have a very limited number of grocery items and are truly positioned for convenience purchases. Expanding to full-service grocery stores is a game-changer and will inspire other brands to ramp up their investments in cashier-less options.

I am intrigued by this larger store format and will wait to see the success of it.

A few questions I hope some of the group can answer:

1. Has Amazon said how much shrink is acceptable in these Go formats with very few employees at each store?
2. Does anyone know if the larger grocery format they are building in California will have the Go technology? That store is more of a full traditional store than this format (or so it has been written about) opening today.

Amazon has a competitive advantage in the convenience space with its Amazon Go convenience-focused prototype. While the company has not scaled the smaller format convenience stores to the thousands of stores level, the 25 or so they have opened have proven that the concept could work for people on the go. The question we all have is “will it scale,” and if so how significant could the cashier-less model become?

However as Amazon scales up into the larger grocery format stores, with expanded assortments, meats, produce and dairy products, other factors will come into play beyond the speed and convenience of a cashier-less model. The larger Amazon grocery model will be going up against well-established companies such as Trader Joe’s, Whole Foods, Kroger, etc., and other differentiating factors will come into play, including price, quality, assortments, and the overall customer experience.

The Amazon Go larger format stores’ potential success story is intrinsically tied to execution.

It’s notable that Amazon is now looking for partners who would like to license the Go technology. Just as with AWS and Prime subscriptions, the real money will come through the back door.

When I visited an Amazon Go store in Seattle, I noticed the store was empty. Shoppers must download the Amazon Go app before they’re allowed entry, even to browse. I didn’t go in. However I visited (and made a purchase at) an Amazon 4-Star store because the model’s data-driven approach reflected an optimal assortment of bestsellers.

I expect the new grocery stores will be a hybrid of Amazon Go and Amazon 4-Star: exclusive entry and the best of the best merchandise.

As for expansion, Amazon will continue to test and adapt the Amazon Go Grocery model until they’re confident they can erode Walmart’s grocery market share.

Grocery rivals are certainly paying attention to this news. They’re weighing how to stay resilient and distinct with BOPIS and more affordable price points compared to Whole Foods.

I believe Amazon is going to sell the technology rather than open 1,000 grocery stores. I could be wrong, but operating low-margin physical spaces just doesn’t seem to be anywhere in their past behavior in scale, so why start now? A grocery data feed is what I think is happening here, whether from them or others that buy in. And online grocery? That’s a different story and, perhaps, the technology in a few ideally places physical locations would offer enough information to fuel inventory and logistics knowledge for said grocery clicks on a massive scale.

No doubt grocery dominance is a target for Amazon, but these stores leading to that? I just don’t see it. A data feed is what I see.

The ROI for a store requiring this amount of technology today isn’t sustainable on any large scale but like all technology the cost will come down over time. I applaud Amazon for leveraging their tech savvy heritage and their acquisition of the premier grocery retailer in the country. The big issue is shrink in these locations and not all zip codes are created equal. This can’t scale in an America that has the economic imbalance we have today. Someone has to mind the store.

This is amazing and surprising if I am being honest. I had imagined that this would stay purely as a convenience format because of specific packaging and other constraints. However this does raise the bar again for other retailers. It shows the model can scale. Could it be that Amazon might offer to white label this and offer it out to other retailers? After this move I now think that this approach is much more likely.

At some point the technology is going to work and work at scale. This is just another indication that things are headed in the right direction. Yes, Amazon has the privilege of spending, testing, and modifying all without the worry of a significant drain on profits, but that’s not a bad thing when innovation is the result. All of that said, Amazon will still be measured on the basis of the customer experience. Technology can enable and even drive the customer experience but price, assortment, engagement, etc. will play a huge role.

Besides offering attractive prices, Amazon will use the new store as a learning experience to make the in-store shopping experience more engaging and attractive for everyday shoppers. Traditional grocers would be wise to adopt some of the coming innovations for their own stores before Amazon opens a full-sized supermarket next to them.

This is just my opinion of course, but I suspect that this technology capability will soon be commercially available to grocery businesses everywhere. Like the post says, reducing or removing checkout friction is a key initiative across the industry. What Amazon gets by being there first is that first mover advantage that they can exploit with their CUSTOMER DATA. They establish a reputation for doing it best with a decent assortment, integration with their online business and Prime, and can tailor every element of the CX based on their rich customer insights. The stores will probably become an advertising channel for brands as well that is easily incorporated given the sunk tech costs of equipping the stores. What I suspect Amazon loves is how everyone is focused on the cashier-less checkout store, versus the actual strategy playing out. It’s a great distraction.

The payback for this I guess is in customer convenience, and the ability to run 24/7 if in fact they are. The savings in cashier costs, taking into consideration the cost of the hardware, can’t be all that impressive — comments?

This is the latest in Amazon’s history of experiments designed to make the customer’s shopping experience convenient and efficient. True, customers see the checkout process for most retailers as archaic. Taking items from the shelf, placing them into a shopping cart, then taking the items out of the cart, placing them on a conveyor and finally placing the bagged items into your cart (again).

In the long run, cashier-less options will only work when the above tasks are minimized or limited.

After five years of testing and practicing, maybe this will work they way they hope. This is the beginning of the future of retail – at least the way customers pay and check out.

Competitors will adopt a similar system. It may have taken five years to open this store. In another five years this will be common in retail.

I’m no Luddite, but I remain a skeptic about cashier-less shopping in full-scale supermarkets. Here’s why: The systems demonstrated so far require significant changes in both shopper behavior and store operations.

There’s a clue in the tidbit about 49 cent (!) avocados. If the system precludes PLU (price look-up) merchandising that means perishable departments must be merchandised differently. (True, per-item produce is the norm at Trader Joe’s, but for most supermarkets, it means making a major change.)

Walk-away systems have greater potential in convenience and limited-assortment retail, mainly because they are less overwhelmed by intricacy. Supermarkets are the supreme test because they are the most data-intensive and fastest-paced environment in retail. This makes them irresistibly attractive to IT entrepreneurs (and Amazon too).

So far, at least, cashier-less tech is too pricey and the impact within the selling environment is not yet well-studied. I think this will take longer than many people expect.

Great accomplishments with the technology, although no accuracy claims were made in the article or video. The other issue not mentioned is the cost of the camera infrastructure and the web services (owned by Amazon) to make it work. In other words, the value provided vs. the cost is not discussed. Amazon will proceed with the Go stores if the cost/benefit ratio works. Several competitors, like 7-Eleven, are trying the technology also and this Amazon Go “success” will press them to move forward with their trials.

Here is what I know. All stores will be cashier-less, no matter their size nor their category. What I don’t know is when.

Throughout Amazon’s history of success, the secret has been that they haven’t been afraid to try things that sounded absolutely outrageous. Of the many things they tried, most did not work. But the ones that they found had value turned them into this dynamic company. Their philosophy hasn’t changed. This step says one thing: the idea has merit. Neither we nor Amazon has seen it in its final form but it is on its way to being the future.

The video makes shopping look so easy. Not a human cashier or stock person insight. Surely a human will be restocking and “fluffing” the inventory to look fresh and wholesome? What could go wrong? Frictionless grocery shopping sounds great until one has a question, although I am sure Amazon will have a Chabot to help each customer with questions. Maybe talking to a Chabot will be as fun as the self-checkout experience of today. If Amazon Go Grocery inventory at scale ends up as tired and unappealing as shopping Target for groceries, no amount of tech will save the experience. At the end of the day, humans are still humans, satiated by the thoughts of a good, delicious meal. Food is subjectively a personal, sensory experience of taste, visual delights creating an appetite and desire to enjoy food. In the long run, Amazon tech will need to cross the invisible and subjective barrier of individual human experiential sensory-preferences to succeed with Amazon Go Grocery. Of course, this could be considered mind-reading, which in itself is… Read more »

Many thoughts come to mind! 🙂 It’s very impressive that they’ve made the technology work with produce and other small, loose items — assuming their accuracy is high and shrink is low. While we don’t know those numbers (and it’s doubtful we will) this is an impressive showcase of Just Walk Out technology and what the future of retail looks like — but that’s what it is, a showcase rather than a brand new format. What’s most telling to me is that there is no discussion of how this new store impacts the full grocery store we know they are building in Los Angeles. Will that much larger store have Just Walk Out technology given the comment about how they can scale to any size now? We don’t know what the costs are to implement, but what we do know is that Amazon isn’t worried about the costs. They are willing to build as many of these stores as they need to collect the data they want to derive the insights they need for the… Read more »