Why Amazon Go hasn’t transformed retail yet


When Amazon Go opened its first stores, there was all sorts of hype and excitement.

A few titles have used the phrase “the future of retail.“The idea that you could just walk out of a store without going through a cashier to pay was a game-changer.

But it hasn’t changed the world the way some expected, at least not yet.

We went to find out why.

At Amazon Go, you scan with the Amazon app. In some places you can use your palm or a credit card to enter. Cameras watch you, recording what you pick up. When you leave, you are automatically charged for what you took.

Visitors to the new Mill Creek store seem ready to give it a shot.

“We kind of had to read the instructions to get in, because we’ve never done that before,” said Veronica Morrin, who stopped in with her mother for lunch. “So far we love it.”

Matt Dickert comes here regularly with friends from Jackson High School.

“We’re going to come in, and we’re going to pick stuff, and then somehow, that… knows,” he said. “It’s really cool because it’s so different.”

Client Brooklyn Buchanan said she liked the efficiency of not checking.

“I don’t have to go through a line, wait behind a bunch of other people who have a lot of stuff when I only have two things,” Buchanan said.

But if this is the future of retail, it’s not going to happen anytime soon.

“If you look at what they’ve rolled out, they haven’t rolled out 50 to 100…there’s a handful,” said Anjee Solanki, America’s top retail expert for Colliers, a real estate firm. international trade.

We’ll get to his analysis later, but as far as his point goes: Amazon only has about 20 Amazon Go stores, and “Just Walk Out” technology hasn’t exactly caught on like wildfire anywhere else. other types of stores and restaurants.

There are three types of surprising reasons for this.

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Staffing Challenges

The first is staffing.

Even though there are no cashiers, employees are needed to keep the store running smoothly. But some Amazon Go employees say the company can’t keep its downtown Seattle stores staffed.

“As soon as they find someone, someone quits or someone leaves,” said Mimi Martin, who works at one of these downtown stores. Martin said she liked her job, but wished she wasn’t so skinny.

“It’s just go go go go go, no stopping,” she said.

caption: Mimi Martin, in a park near the downtown Seattle Amazon Go store where she works

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Martin said she hasn’t taken a lunch break since she started working there.

“It’s a common thing I’ve heard from all employees,” she said. “And I’m like – wow, another company that just doesn’t treat its employees the way they should.”

Other Amazon Go employees shared similar stories. They said it was impossible to take a lunch break when they run the store on their own and the alarms keep ringing to keep them focused on their task: refilling the cafe, removing food from the ovens or it will burn , take out the cash register because a tourist wants to pay cash and restock the shelves, because a new wave of construction workers is coming soon and they are hungry.

caption: Hot food shelves at Amazon Go in downtown Seattle

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Amazon disputes the claims. A spokesperson said Amazon continues to successfully hire for in-store positions. Another spokesperson said, “If an employee is unable to take a meal break or their meal break is interrupted, they are paid in accordance with Washington State law.”

Tom Geiger, spokesman for UFCW 3000, which represents many Washington state grocers, said that’s not what the law says. He said a 30-minute break from work is necessary unless mutually agreed between the worker and the manager. Meanwhile, Geiger said: “You could leave the store, you could go to a break room… If your friend had a helicopter, you could probably fly out of the county and back. You’re pretty much free to do that. what you want to do.”

However, Amazon decides to handle this, ushering in the future of retail could prove difficult if employees are not on board.

Customers who don’t understand

In addition to its personnel problem, Amazon has a second challenge.

The company tried to sell this technology to other types of stores and restaurants, and some of their customers just didn’t get it.

For example, Amazon has installed its “Just Walk Out” technology in some of the dining spaces at the Climate Pledge Arena.

In some ways, it’s the perfect place to watch this take-to-work tech. Hockey fans tend to run around looking for food all at once because they don’t like to miss anything from the game.

But in one of Kraken’s final home games of the season, fans weren’t always tuned in to the new technology.

Caption: A line to enter Big Chicken at Climate Pledge Arena

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“It’s a bit confusing because there’s a line of people who don’t quite understand what’s going on,” said a customer named Amir, who stood in line, shaking his head.

Just after the turnstiles, inside Big Chicken, there is a bottleneck. The line is blocked by a guy waiting for a type of sandwich that happens to be out of stock at the moment. The other sandwiches are just there, plentiful and quickly losing their internal heat.

The intention is for other customers to cut in front of the guy waiting for his particular sandwich and just take what’s available. But no one wants to cut. The line therefore lengthens.

caption: Courtney Fisher (R) and her friend braved the line and got their Kraken Chicken Sandwiches

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Big Chicken CEO Josh Halpern said fans might not understand what “Just Walk Out” means.

“Or are they so used to queuing that they are queuing, following the herd?” He wondered.

Halpern said he’s excited about the technology because he thinks people will eventually figure it out. But he said he doesn’t plan to use it at his other restaurants.

This leads to the third reason why Amazon’s technology may not be the future of retail after all.

Limited utility

The technology only makes sense in high-traffic places: places where you can sell, say, hundreds of identical burgers between hockey periods.

“At the stadium, because it’s so spinning and burning, the burgers are as they come. And you can’t customize them at all,” says Marcus Lalario, the CEO of another restaurant at that stadium testing the technology. , Lil Woody’s.

Lalario also loves technology, but like the other CEO, he doesn’t think it makes sense for his other sites.

“In our bricks and mortars, we’re much more flexible with special orders because we understand that a big part of our business is creating your own burgers and being able to ask for no pickles, no ketchup, you know what I’m mean,” he said.

Almost all of the companies testing Amazon’s technology are in airports, major casinos or sports stadiums. “Just Walk Out” didn’t catch on on America’s main streets.

Amazon pushes back against this idea that this concept can only work in limited circumstances. The newer Amazon Go store was not in a busy downtown area. It was in a residential suburb (Mill Creek).

Retail has other problems to solve first

Anjee Solanki, who we heard from at the start of the story, is the top American retail expert at Colliers.

Even if Amazon overcomes all the obstacles it faces, it is still unclear whether its technology will become a hot seller.

That’s because the pandemic has introduced a different set of issues for retail stores.

“They have a supply chain, they have online buy, in-store pickup, curbside, online buy, in-store return,” Solanki said. “They deal with so many different layers within their different channels.”

For businesses facing these issues, Amazon’s technology may not be what they need right now.

“And so, maybe it’s not on their priority list right now, because they have all these other things that they need to work out,” she explained.

Caption: Anjee Solanki is the US retail manager for Colliers, an international commercial real estate company

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But Solanki said she was optimistic about Amazon’s ability to overcome its hurdles and prove the technology’s relevance. She said if any company can do it, Amazon can.

“One thing they really believe in – is testing concepts, refining concepts as they go,” she said.

And the company’s slow rollout of this technology may show it’s dutifully addressing its issues, she said.

But what about customers? Do they think this is the future of retail?

Dennis Lee was a client of Climate Pledge Arena. He had just walked through that long queue for food. But his description of the experience was only positive.

“It was really efficient, just like the Amazon Go stores,” he said.

Can he see this technology spreading to other types of businesses?

“God, I hope so,” he said.

Lee doesn’t work for Amazon, he said when asked. He’s a client, nothing more.

And at Amazon, a company that says it’s obsessively focused on customers, it’s the judgment they care about most.


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