Amazon Go: Death to Grocery Stores!
Late Monday afternoon Amazon announced it’s latest venture, Amazon Go which seeks to disrupt the $650B grocery business (FMI.org).
In their presentation Amazon outlined aggressive growth strategies culminating in a projection of 2,000 grocery stores over the next decade. However, Amazon Go isn’t like any other ordinary grocery store, it’s fully automated and runs without any human interaction.
What is Amazon Go?
Amazon Go is a new kind of store with no checkout required. We created the world’s most advanced shopping technology so you never have to wait in line. With our Just Walk Out Shopping experience, simply use the Amazon Go app to enter the store, take the products you want, and go! No lines, no checkout. (No, seriously.) via Amazon Blog
2017: The year AI Runs Grocery Stores
The first Amazon Go store is opening in Seattle where customers can swipe in, grab the items they need from shelves (which are added to a virtual cart via an app) and have a receipt mailed to them after they leave the store.
How Does Amazon Go Work?
Along with the announcement, Amazon also released this short introduction video which explains how the service will work.
Amazon Fresh → Amazon Go
Amazon is not new to the grocery business, Amazon Fresh it’s online grocery delivery service has been around since 2013. It appears they have surreptitiously used this as an opportunity to learn about the logistics underpinning grocery store supply chains.
With Amazon Go, the company stayed true to it’s strategy of learning about the logistics underpinning a certain product vertical before transforming those insights into competitive advantages. First they used what they learned delivering books to give them a competitive advantage while delivering e-commerce products. Now they’re using insights from running Amazon Fresh to disrupt brick and mortal grocery stores with Amazon Go.
Threat to Unskilled Labor
What is most striking about this announcement is the unprecedented threat it poses to unskilled jobs. Grocery chains, which are the leading employers of cashiers accounted for 856,850 employees within the US (Bureau of Labor Statistics)