Amazon Testing Store Scan and Go

by Raymond Pucci 0

Will the in-store checkout counter vanish? Maybe—if Amazon’s concept store proves to be successful. As the following article reports, Amazon and others are trying different ways to streamline the shopping experience with either mobile ordering or in-store scanning being a big part of the efforts.

The sales numbers from big U.S. retailers over the holidays were deflating — with the notable exception of e-commerce leader (AMZN), which had its best holiday season ever. But the pressure Amazon has applied to Wal-Mart (WMT), Kroger (KR), Target (TGT) and other retailers is about to get more intense with Amazon’s expansion into its opponents’ lair: brick-and-mortar retail.

Amazon is set to open its first Amazon Go convenience store, an actual physical store. Other Go stores will soon follow. Amazon Go, announced in early December, is a small (1,800-square-foot) convenience store with a novel twist — there are no check-out lines. In-store wireless technology will tabulate your purchases and charge your Amazon account.

The Amazon Go stores will sell a range of groceries, specialty foods and ready-to-eat meals. The first Amazon Go, near Amazon headquarters in Seattle, is being tested by Amazon employees ahead of the official opening, which the company says will be early this year. Amazon says its checkout-free shopping experience “is made possible by the same types of technologies used in self-driving cars: computer vision, sensor fusion, and deep learning.” The technology automatically detects when products are taken from or returned to the shelves and keeps track.

Amazon hasn’t said how many Amazon Go stores it plans to open, but its usual intent is to make every market it enters a multibillion-dollar business. The company does now have three physical bookstores (in Seattle, Portland and San Diego) that are more or less conventional stores, though customers can download books they find in the stores to their Kindle or other devices. Five more bookstores are in the works, in New York City, Chicago, New Jersey and two Boston suburbs.

Amazon makes serious investments into new ventures and stays in for the long haul. The convenience store concept of self-service product selection, scanning, and payment makes for an interesting pilot study. While details on the C-store concept are limited, their upcoming store will demonstrate many technologies that should add value to the declining universe of brick and mortar stores. Unlike driverless cars, checkout free stores could very well be coming to a neighborhood near you sooner than we think.

Overview by Raymond Pucci, Associate Director, Research Services at Mercator Advisory Group

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