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The Spoon

Daily news and analysis about the food tech revolution

Amazon Go

Amazon Go Delays Public Opening Due To Tech Challenges

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.

Amazon & Hershey Company Both Experiment With The Future of Grocery Shopping

Amazon’s done it again.  In their quest to revolutionize grocery procurement, Amazon is once more redefining the grocery experience with Amazon Go.

Introduced late last year, Amazon Go is a new kind of grocery store that eliminates the check-out line.  Their “just walk out technology” lets shoppers simply put the goods in their bag and just walk out of the store.  No check out needed.

It may feel a lot like shop lifting, but according to the folks at Amazon, it’s the future of grocery stores.

All shoppers have to do is check-in by scanning their app as they enter the store and then special sensors track when items are removed from the shelves.   Shoppers are then charged via their Amazon accounts when they leave the store.  Easy, right?

But Amazon Go isn’t just making it easy for the shoppers, it’s also lowering operational costs.  No check-out means a lot fewer workers needed to run the store and much lower payroll.

So far Amazon has experimented with just walk out technology in the convenience store type setting of Amazon Go, but word is that Amazon is thinking much bigger and may begin opening two-story grocery stores operated in much the same way.  These automated mega-stores may be able to run with as few as three workers at any given time.

Amazon isn’t alone in developing experimental groceries. Hershey is experimenting in the retail space with Medley, a concept grocery store within Hershey headquarters.  Medley is pretty much the exact opposite of what Amazon Go is all about.  The concept behind Medley is a high touch, experiential grocery staffed by experts in specific fields (butchers, bakers…) and designed to make grocery shopping more of an escape than a chore. While not an actual store, the purpose of Medley is for Hershey to demonstrate to retail partners how to implement these concepts into stores.

“Our goal is to get our partners to think about what the experiential store of the future will look like,” said Brian Kavanagh, Senior Director, Retail Evolution for Hershey. “We’re not just working with retailers on developing the confection category. We want to help them leverage this technology for better stores.”

Hershey is developing another grocery concept, Oasis of Freshness, which would be a pop up store in urban “food desserts”—areas lacking grocery stores with fresh products.  This concept would convert a mobile shipping container into a pseudo farm stand with local produce, meats, and dairy.

Experimental stores are taking on many different shapes, but all point to changing needs and how people want to shop for groceries. Companies like Amazon are extending their reach from the online world to tap into new markets with new concepts for physical grocery retail experiences, while others like Hershey’s are looking to leverage new technologies to envision what a more experiential food retail experience might look like.

No matter the motivation, this is only the beginning as experimental groceries look to fill gaps that traditional stores have left open and look to meet the evolving needs of a fast-changing consumer marketplace.

Kroger Gives Tech Initiative IoT Spin As Amazon Turns Up The Heat

Back in 2014, grocery store giant Kroger began to discuss its digital shelf technology, where they would replace traditional shelf labels with digital shelf labels to enable features such as dynamic pricing. Over time, this effort would expand to include personalized information for the shopper.

By late 2015, the digital shelf tech had rolled out from a few dozen stores to over two thousand nationwide and had begun to incorporate dynamic pricing and nutrition info.

Now the company is looking to power-up its digital shelf technology with IoT. According to a report from the Wall Street Journal, Kroger “is testing sensors and analytics technology to let shelves and products interact with shoppers walking the grocery aisles.” The new system would be able to detect individual shoppers and created targeted advertising using the electronic shelf display screens.

This new effort, which looks to employ location-sensing and authentication technology that at least sounds similar to what Amazon is talking about with Amazon Go, is currently in 14 stores in the company’s home market of Cincinnati.

Can grocery giants like Kroger employ IoT tech to make the shopping experience better? They better hope so. After all, it’s not like Amazon is slowing down its grocery ambitions. The Wall Street Journal reported in December that Amazon has plans that go beyond the smaller concept store unveiled in Seattle in late 2016.

As Allen Weiner wrote about the effort earlier this week, “Amazon will test two other concepts, including a drive-through version and a larger, expansive store to compete with Target and Wal Mart. Based on its tests, Amazon will move quickly into expansion mode with a full-scale, nationwide rollout. The initial batch of such IoT grocery stores will likely be based in states where Amazon has large fulfillment and warehouse centers.” The Journal reports Amazon could open up to 2,000 such stores under the planned rollout.

For grocery store companies, this move towards context-aware and IoT-powered shopping is nothing new. What is new is Amazon taking things next-level with Amazon Go, which uses IoT and AI to go beyond incremental changes and entirely rethink how grocery shopping should work.

And now, slowly but surely, established players like Kroger are trying to figure out what it means when the leading online retailer moves into their world of brick and mortar.

Dash & Go: Amazon’s Strategy To Attack The Grocery Market

I can’t stop thinking about Amazon Go.

If you missed it this past week, Amazon blew our collective minds with the unveiling of their rethink of the grocery store. I wrote, “if you’re a grocery store and aren’t worried about what Amazon is doing, you should be. With Just Walk Out, they are looking to utilize IoT, AI and mobile to extend their dominance from the online and in-home commerce world to the corner grocery store.”

How does this fit together with what else they’re doing in the grocery realm? I’d describe it as a strategy of ‘Dash & Go’, where they ‘Dash‘ towards the middle of the store filled with dry goods and commodities and then ‘Go‘ after what I call the “fresh edge”, around the perimeter of the grocery store where everything is fresh, artisanal, green.

This strategy crystallized for me when I read the following description of Amazon Go:

“We offer delicious ready-to-eat breakfast, lunch, dinner, and snack options made fresh every day by our on-site chefs and favorite local kitchens and bakeries. Our selection of grocery essentials ranges from staples like bread and milk to artisan cheeses and locally made chocolates. You’ll find well-known brands we love, plus special finds we’re excited to introduce to customers. For a quick home-cooked dinner, pick up one of our chef-designed Amazon Meal Kits, with all the ingredients you need to make a meal for two in about 30 minutes.”

That’s the fresh edge, folks.

When you look at Amazon’s Dash partners, you see a whole lot of packaged goods, whether that means bottles of fizzy drinks, cleaning supplies, or toiletries, etc. It’s the high-volume, sometimes boring stuff that consumers know they need and just want to make sure they have at all times.

Some have speculated Amazon Go is a proof of concept meant to showcase the technology to potential customers like, well, grocery stores. I disagree. Just Walk Out, the technology platform at the center of Go, is certainly interesting and something other grocery chains would want. But here’s the thing: I’m not sure Amazon is in the innovation business to help other grocery stores.  While they may “lend out” their innovation in the areas of cloud computing and Alexa through as-a-service models and APIs, I can’t see them creating a massive reinvention of the grocery store concept for others to use without first trying to capture as much of this market themselves as possible.

Some may also wonder why I don’t see Amazon Fresh, Amazon’s grocery delivery business, as a “third leg of the stool” in this grocery strategy. I’m not ruling out that the delivery of fresh will some day become a very important business for Amazon, but you have to wonder why a grocery delivery business they’ve been working on for a decade hasn’t been scaled very widely yet. This tells me that they may realize home grocery store delivery, which has been a dream of Internet innovators since the days of Webvan, may not be the most efficient way to get food to consumers.

Lastly, I don’t think Amazon is done. They hint in the video (see below) they’ve been working on Go for four years, which makes you wonder what else they are working on. I’ve heard from multiple Amazon folks they have a bunch of new tricks up their sleeves in 2017 (one of which could be a “kitchen computer”), so there’s a good chance the company will blow our minds next year as well.

Introducing Amazon Go and the world’s most advanced shopping technology

Amazon Wants To Automate The Grocery Store

Last month, I wrote about Amazon’s attack on the middle of the grocery store as it installs millions of auto-replenishment buttons in our homes.  As it turns out, this may only be the beginning.

Today the company announced a new grocery store concept called Amazon Go. The first store, which is currently open only to Amazon employees, utilizes what the company calls “Just Walk Out” technology to eliminate the worst part about going to the grocery store: cashiers and checkout lines.

What is Just Walk Out? According to the company’s intro video, it’s a mix of “computer vision, deep learning algorithms and sensor fusion” that combine to eliminate the need for the old-fashioned checkout. While they don’t go into more detail than that, here’s what I think they’re doing:

Computer vision: This means cameras to both identify the person and what they put in their bag. This most likely includes facial recognition technology for shopper identification, so your face is now your ID.

Sensor fusion: Likely a combination of proximity sensors for the shopper and RFID tags for the products themselves. For the RFID tagging, it’s probably not unlike those conveyor belt sushi restaurants where they can tell when you pick something up, only here you’re not sitting at a table but moving around the store.

Deep learning algorithms: the most mysterious part of ‘Just Walk Out’, but likely also the most valuable to Amazon. That’s because deep learning probably means behavior tracking, where Amazon not only learns what you buy, but what you almost buy. Stores like b8ta are experimenting with understanding how long consumers linger and interact with different products, and I would bet Amazon will use proximity sensors, cameras and sensors on the devices themselves to better understand your interests.

If you’re a consumer, the benefits are obvious. Being able to just pick up a quick meal and walk out is something anyone who has waited in a long line during lunch hour would jump on immediately. While there’s a slight creepiness factor to the tracking technology and just how much Amazon will know about you once you walk in their store, I have a feeling most consumers will shrug their shoulders at the big-brotherness of it all. After all, it’s not like they’re shying away from putting an always-listening speaker in their homes.

Bottom line, if you’re a grocery store and aren’t worried about what Amazon is doing, you should be. With Just Walk Out, they are looking to utilize IoT, AI and mobile to extend their dominance from the online and in-home commerce world to the corner grocery store.

Introducing Amazon Go and the world’s most advanced shopping technology