The Wall Street Journal reported yesterday that Amazon is delaying the public opening of its first fully automated grocery store known as Amazon Go. The store, which has only been open in beta to Amazon employees in the Seattle location, was supposed open at the end of this month. This is being pushed back, due to a few glitches involving tracking items and processing payments.
Amazon reported that it was experiencing technical problems with two key areas of its “Just Walk Out” technology – the company’s payment system was unable to handle or process payments when more than 20 people were in the store at a time. The system also struggled when an item was moved from its specific location on a shelf.
The traditional grocery store has been experiencing disruption for the last several years, with the rise of e-commerce giants like Amazon and Jet.com taking aim at consumer packaged goods (CPGs). Other rising stars like meal kit delivery subscriptions and grocery store delivery give consumers more options for fresh foods like produce and meat that don’t involve setting foot in a brick and mortar store.
But Amazon’s vision for the more convenient food store utilizes existing and emerging tech like connected sensors, machine learning, RFID tags and mobile payments to implement a cashier and checkout line-free experience for consumers. Not only does it create a streamlined door-to-door shopping event for the customer, but it cuts costs for the grocer – who in this case is Amazon – and could help impact the bottom line in a field where margins are shrinking.
And it’s clear why Amazon wants to build physical stores – as much as e-commerce is making grocers in North America rethink ways to attract customers with sales, fresh foods and produce and upgraded natural food and organic offerings, Nielsen’s 2017 research shows only 10% of consumers are currently shopping online for groceries. Amazon will need a multi-prong approach to remain competitive in grocery, especially when it comes to fresh foods and non-CPG items.
Amazon Go’s tech issues don’t seem major – but they are a good reminder that full-on grocery automation is hard. There are a lot of variables to consider, especially in a busy store, where customers are moving around, bumping into each other, moving merchandise without putting it back but not actually buying it. As a reminder to automation enthusiasts, earlier versions of what Amazon is trying to accomplish – self check-out kiosks – are still widely underused in grocery stores. And those of us who have used them know all too well that often, the light above the conveyer belt will inevitably blink when a customer has a problem, beckoning a store employee over.
So the future may be automated – but it’s not clear how seamless those shopping experiences will be, at least not yet. Amazon Go’s public opening and subsequent operations will certainly be telling.