Wondering what it means to have a completely frictionless grocery shopping experience? Enter Amazon Go: the world’s first checkout-less convenience store. (Reading time 2:36 mins)

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The worlds of traditional and digital retail moved closer when Amazon’s concept convenience store Amazon Go opened to the public in January.

Located near the company headquarters in Seattle, the store features an array of sensors, cameras and artificial intelligence technology to track purchases and automatically debit customers’ accounts through a smartphone app.

Meanwhile, Amazon will begin to amass data about their customers shopping habits from inside the brick-and-mortar store. If all goes well, we may see the concept rolled out to Amazon’s newly acquired Whole Foods Market stores in the near future.

How does it work?

The state of the art grocery store eliminates the need for barcodes by using cameras and sensors to track items taken off shelves. Cameras also observe movement from above while shoppers browse.

Amazon Go opted for a traditional convenience store layout minus the checkout counters.

Instead of being bound to a checkout counter, Amazon Go employees check IDs for alcohol purchases, greet customers, answer questions and stock items once they deplete.

The key to its widespread adoption lies in the fact they’ve introduced a new technology within a familiar setting. While the introduction of this new tech may reduce the overall number of jobs in a store, the tasks that make up remaining jobs will almost certainly change.


Data-driven grocery shopping

Amazon has not divulged any information regarding the specific technology that powers the store. They’ve only disclosed that it’s similar to driverless cars, which use sensors to create a real-time digital model of a roadway.

Similarly, cameras and other sensors must create a digital model of the store that updates in real-time as items and shoppers move around the store. Algorithms then sort through streams of data to match different shapes in the digital model to staff and customers in the real world.

The use of artificial intelligence to track items is a data-intensive method of tracking inventory. However, increasing data collection more than increasing sales may be the ultimate goal here.

The checkout-less store opens up the opportunity for Amazon to learn even more about customer shopping habits – now both online and offline. While traditional retail stores have to rely on customer rewards programs to track customer purchases in exchange for discounts.


Outlook for retail

Amazon Go applies the online experience to a brick-and-mortar store. In e-commerce, software handles transactions and algorithms return search results and make product recommendations.

An employee might intervene only to answer a question about a product or to resolve a problem with an order. The retail sector employs around 10% of the American workforce, but that may change if brick-and-mortar stores adopt technology to make workers more efficient.

Amazon Go introduces a physical manifestation of online retail, and fundamentally changes the retail experience. Customers will have to accept a level of data collection once only possible in e-commerce.


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About Kevin Hua

Kevin Hua is a Co-Founder of AtlasTrend, an investment platform that makes it easy for anyone to learn and invest in trends impacting our world. Kevin has over 20 years experience in financial markets including as Senior Portfolio Manager at Atrium Investment Management and Stark Investments.