Any potential downsides to Amazon Go?

[stand@desk]

Amazon go opened Monday in Seattle. I am trying to think what potential downsides a business like this could have, and if those downsides could just be "innovated" away? Will this business concept just take over all other bricks and mortar retail businesses or is there a way it would fail somehow? I would love to hear others opinion on this store and the concept and the advantages/disadvantages in terms of anything to do with it.

For some reason it doesn't sit well with me. I feel like going to a place like this is like doing business with someone that will try and take any advantage they can from you and trick you into thinking its good for "convenience" reasons. I feel like if I was to shop in a place like this, I would expect very big discounts because there is much less physical labour (supposedly) involved. I am not sure if the prices are competitive or more expensive than other stores. I've also seen a story about how many Whole Foods locations are having trouble keeping their shelves stocked with their new inventory system.

I also wonder that if there are less workers, what kind of tax base will your community have? No tax base means little investment in public infrastructure and services and would make the community less desirable.

One final thought, I see a lot of articles on automated check outs and automated ordering systems in restaurants, particularly fast food places but I rarely see people using them. If you received a 10-20% discount to use the machine it would really make you consider using it, but as far as I know, business haven't "gone there" just yet.

[jennypenny]

it's a giant vending machine

[bryan]

(reply to @jennypenny)

https://unenumerated.blogspot.com/2006/ ... smart.html
http://firstmonday.org/ojs/index.php/fm ... ew/548/469 "The basic idea behind smart contracts is that many kinds of contractual clauses (such as collateral, bonding, delineation of property rights, etc.) can be embedded in the hardware and software we deal with, in such a way as to make breach of contract expensive (if desired, sometimes prohibitively so) for the breacher."
http://www.fon.hum.uva.nl/rob/Courses/I ... /idea.html
https://medium.com/@therealopenbazaar/i ... d3c216854f
http://elaineou.com/2016/12/05/can-smar ... y-binding/ "Asking whether smart contracts can be legally binding is like asking whether submarines have gills or blowholes... Smart contracts make it so lawyers don’t get to argue over nonsense and write 52-page papers discussing clickwrap case law. The whole point of a smart contract is to NOT go to court...If you need to ask whether your smart contract is legally enforceable, you’re doing it wrong. Smart contracts make it so people don’t have to litigate over details like “Did this guy pay for parking or not?” ...smart contracts can be used with traditional contracts to control the burden of lawsuit."

I'm simply astounded that Amazon hasn't launched a competitor to Bitcoin.

edit: I'm generally astounded Amazon doesn't offer many other products as well e.g. insurance or banking.

[daylen]

@bryan I'm not. A currency that is linked to a large company like Amazon isn't a competitor to a currency that was created to be decentralized. How would Amazon profit? A slight efficiency gain to a service that is already innovative enough to be without competition? A company as large as Amazon is better off with a government ally, and the government despises alternative currencies.

[bryan]

Don't want to derail the thread, lol. An AmazonCoin could be better than Bitcoin in many important ways and Amazon would have a lot to gain. Make a new thread or find some appropriate (e.g. crypto-currency) thread if you would like to talk more about it. (I agree about government ally part though, Amazon may have decided the risk is just too great and they are fine with Amazon gift/credit/points and the cloud)

Amazon Go sounds pretty sweet. I'm sure competitors will have to license the tech from Amazon in the coming years.

[unemployable]

Well this concept has been promised for a couple decades. I recall a tv commercial from the 90s where a guy walks around a store and stuffs items into his coat pockets, then walks out with his coat clearly bulging and a security guard stops him and says, "Sir? You forgot your receipt".

That's not a very big store, like maybe 20 paces on a side. Real estate in downtown Seattle (I guess that's Belltown?) isn't cheap, but certainly full of people who think they're cutting edge. Clearly this is a test run and they're probably not making much money for now, but hoping they can figure out a way to scale it up.

One final thought, I see a lot of articles on automated check outs and automated ordering systems in restaurants, particularly fast food places but I rarely see people using them. If you received a 10-20% discount to use the machine it would really make you consider using it, but as far as I know, business haven't "gone there" just yet.

The discount is an implicit one, compared to hiring an extra person or two at $15/hr minimum wage plus benefits.

I suspect restaurants in areas with high costs of living and high minimum wage laws will get these first. We should be seeing smartphone apps to do this ramping up. I guess these already exist with pizza delivery and such.

[Chris]

I also wonder that if there are less workers, what kind of tax base will your community have?

There will be fewer workers, but I'm not sure the hit to the tax base would be that significant.

Firstly, most cashiers in the retail world perform multiple jobs, minding the till on an on-demand basis. At the last retail job I held, I'd estimate that cashiering demanded 2.5 people out of a 14-person shift.

Secondly, the Amazon Go concept would be most beneficial in high-cost areas (Seattle, NYC, SF). In those places, retail workers make up a small part of the tax base anyway, with all the high-paid salaried workers around.

Thirdly, I think this concept is pretty narrow right now. It doesn't yet work for big stores. For convenience stores, I think it would still be profitable to have a person on the register, since then you can sell the restricted stuff: booze, cigs, lotto tickets, and porn.

One final thought, I see a lot of articles on automated check outs and automated ordering systems in restaurants, particularly fast food places but I rarely see people using them.

I used one the last time I went to Panera. The experience was quite nice. I was with an indecisive eater, so being able to scroll through the menu with detailed photos and nutritional information was helpful.

Well this concept has been promised for a couple decades. I recall a tv commercial from the 90s where a guy walks around a store and stuffs items into his coat pockets, then walks out with his coat clearly bulging and a security guard stops him and says, "Sir? You forgot your receipt".

Great commercial. That was back when RFID was going to revolutionize retail.

[unemployable]

Great commercial. That was back when RFID was going to revolutionize retail.

Yes, that was it! Thanks!

[Farm_or]

No mention of the psychological shift resulting in over shopping? It seems to me that would be a significant consideration. Removing barriers for the consumer has been and will probably continue to be very profitable.

And no mention of Amazon prime? Another huge winner. Genius, the innovation of Amazon and second place Walmart. I'd hate to be competing in retail there days.

But a whole lot of observing this can apply to people learning on this site. You have to acknowledge the armies promoting consumerism. The innovation of mind and wallet control. Study it, learn it, admire it, and then boldly reject it. Or better yet, invest from it?

[Sclass]

But a whole lot of observing this can apply to people learning on this site. You have to acknowledge the armies promoting consumerism. The innovation of mind and wallet control. Study it, learn it, admire it, and then boldly reject it. Or better yet, invest from it?

Yup. I have mixed feelings when I see this. Like, wow that’s cool, they can actually make that work reliably? And oh no, what will this change?

Powerful technology. No stopping it. The fact that people want this (at least that’s what I gathered in the news articles) tells you a lot about life now. I actually prefer automatic checkout but I didn’t think I’d like it when it came out. Big changes are ahead. I wish I held my AMZN.

[jacob]

Personal Finance side-effect gadget:

If you can track the cost of your basket going out of the shop, you can track it inside the shop. Connect it with a phone and Mint to go (loudly): "You can't afford that! You're over budget! Free Dave Ramsey book samples in Isle 6! ...

That'd be fun.

[Scott 2]

I always choose the self check option. I might pay a 5-10% premium for it.

At stores that offer self check, I find cashiers are painfully slow. Their lines tend to be longer too. Even after adding the "unexpected item in bagging area" errors, self check is 2-3x faster.

I also hate the forced small talk. Again, it is slow, and if a person was good at small talk, they probably wouldn't be a cashier. I don't want to break my train of thought to humor statements like "you must really like carrots" or "how about that local sports team".


If Amazon can keep a handle on loss prevention, I see this taking off. The experience is superior.

I question if it actually lower costs or means less jobs though. Someone has to install and maintain all that equipment. There must be some percentage of manual auditing going on, to ensure shoppers haven't figured out how to game the system. At scale, those new roles require training. People will leave with their new skills. The capital costs to open a store could increase. What happens to the big box model - ie what is the a minimum viable revenue per square foot, to pay for the monitoring tech?

It could be an arms race scenario, where high profit customers prefer the instant checkout so much, that even though it raises costs, stores have to adopt it to stay competitive.

[George the original one]

It could be an arms race scenario, where high profit customers prefer the instant checkout so much, that even though it raises costs, stores have to adopt it to stay competitive.

High profit customers are not the ones who use self-checkout or instant checkout. High profit customers are the ones you can upsell and provide high-margin services. Upselling, at this point in technology, requires face-to-face interaction.

[Scott 2]

That's a good point - a retailer selling expensive products like Coach bags or high end audio equipment is not going to benefit from something like this.

I was thinking more in terms of grocery sales. The type of person who will pay $4 for an organic avocado might pay $5 to avoid the checkout line.

[Peanut]

A Trib article pointed out making shopping more seamless like this would result in people buying unheathier options as well as spending more money. When the couple minutes spent standing in line at checkout are eliminated, people lose that built-in opportunity to reconsider their purchases. Somehow I'm still surprised by the suggestion that people are on auto-pilot/snap decisions/impulse purchasing mode all the time. I guess bc I'm still trying to accelerate my slow decision-making.

Has anyone else been to an Amazon brick-and-mortar? I went into an Amazonbooks store mostly by accident last year. Except for the novelty it was a fairly awful retail experience and I'd never want to go back. All the books are the most popular ones the site sells per category, presented with a ratings blurb summary. So only the top-selling two or three books by an author, etc. There's differential pricing for Prime members and civilians so if you're a Prime member and you want to know the price of anything you're automatically having to consult your phone for the potentially-discounted online vs list price. I'm not but that seems annoying to me.

The store also had no discernible design aesthetic and the in-house coffee shop seemed like an imitation Starbucks built to discourage staying and reading. If this is the future of retail, blech! Ironic that I was part of their devoted first customer base of long tail book buyers.

[theanimal]

The grocery option appears to be similar to their bookstore concept. From all the pictures and videos, it seems as if the majority of the products are Amazon brands/produced. There seems to be a large emphasis on the grab n go style sandwiches/bakery goods/dinners etc. Makes sense, that's where the greatest profit is. But there doesn't seem to be a great diversity in products as in a typical grocery store.

[unemployable]

When the couple minutes spent standing in line at checkout are eliminated, people lose that built-in opportunity to reconsider their purchases.

The next time I see someone in line stick the bag of Doritos in with the magazines or tell the cashier "Don't ring up those Oreos; I don't want them" will be the first.

I thought waiting in line led to more such purchases, what with all the impulse items strategically placed near the register.