Last year, as the Covid19 continues hitting us, Amazon announced that it will offer its “Just Walk Out” technology used in its own Amazon Go stores to other retailers, enabling a cashless grocery shopping experience to traditional grocery stores that moves into digital transformation. Amazon Go first opened back in 2016 in Washington, Seattle, which allows customers to grab the items and exit the stores without going through the old-fashioned checkout systems. However, before talking about the technology used in Amazon Go. Let’s start beginning by reviewing the current grocery store shopping experience.
There are roughly six steps in the traditional grocery shopping experience – walk-in to the store, grab the shopping cart, find the put the items into the shopping cart or shopping basket, wait in the checkout line whenever ready, start the checkout process, and finally put purchased items into the shopping bag. This complicated, time-consuming, and inefficient process has a lot of problems. First, customers waste their time waiting in the long checkout queue when it could be saved. Second, after a long time waiting in the queue, the customers finally got to the checkout process. They need to grab all the items to the counter to let cashiers scan every single item customers purchased. Then customers need to choose their preferred way of payment, coupons, discounts, etc… The last step is to, then, put all purchased items into the shopping bag. On the other hand, the inefficiency also increased stores’ costs. E.g it’s really hard to measure the traffic of the grocery stores, and the customer data collected is so limited to empower the grocery stores on cost-saving and inventory controls. The overall shopping experience can be improved by modern technology. It’s time to introduce digital transformation in grocery stores.
Nowadays, we have seen a lot of grocery stores started the digital transformation, especially in the supermarket industries. Walmart and other supermarket giants introduced e-commerce on top of their existing in-store shopping. Target also announced “order online, in-store pick” to alleviate efficiency problems and improve customer service. Most stores, such as CVS, have self-checkout systems which significantly reduced the checkout time of customers. Besides, there are tons of delivery companies, in partnership with grocery stores, started to offer same day or 2-hour delivery service. The process is 1. Customers order online 2. Delivery companies send shoppers to shop on behalf of customers 3. Delivery of the ordered items directly to the customers’ house. Because the browsing experience online is nothing comparable to the in-store browsing experience. (pictures versus actual feel) Although all of these are solutions commonly adopted by the grocery stores market, the questions remain. How do we provide an efficient in-store shopping experience?
To solve this problem, unlike other solutions, Amazon introduced “Just Walk Out” technology back in 2016. In the first marketing video Amazon posted, it specifically says “no checkout. Seriously, no” Amazon go adopts most advanced technologies – beacons, computer vision, and machine learning—that are used in autonomous cars in the grocery shopping experience. The whole process becomes 1. Download the Amazon Go App 2. Scan App QR Code to enter 3. Choose your items 4. Leave 5. You are charged automatically for the products you selected. There are no checkout lines. How is it even possible? Let’s dive deep and discuss some technology used in Amazon Go.
The heart of the store is the computer vision-based machine learning that is used to track the movement and the intention of everyone in the store. “According to Dr. Medioni, the Go store was a “Computer Vision Complete” problem, a reference to the NP-Complete class of algorithmic problems from Computer Science. Within that top-level problem, 6 core problems needed to be solved to provide the experience.” Says Ryan Gross. The first one is Sensor Fusion, which aggregates all the signals across different sensors such as phone and beacon. The second is Calibration, which lets each camera know its exact location in the store. Person detection can constantly identify and track each person in the store using machine learning. Object recognition is used to distinguish the different items being sold. What exactly each person near a shelf is doing with their arms is detected by pose estimation tech. Finally, activity analysis determines whether a person has picked up or returned an item. In the combination of all technology, amazon go provides an astonishing cashless shopping experience.
Although the technology seems appealing to us, there are several implications and impacts associated with it. First and foremost is the impact on the workforce. “According to the Bureau of Labor Statistics, in 2016, there were 2.7 million people identified as being employed by retail grocery stores, 856,850 of whom are employed as cashiers . This number doesn’t even reflect the 3.5 million cashiers that are employed across all industries, not just the retail grocery industry ” A large number of employees may be affected by the disruptive technology brought by Amazon Go and its cashless model. The second is the reshaping of customer’s shopping behavior and their expectations of grocery shopping. As tech is adopted widely in the industry, customers may expect such a convenient way of shopping. For traditional grocery stores, it’s gonna be a big threat. And they need to improve their customer service to compete with such technology.
Lastly, covid19 has changed the way of people shopping, and it especially accelerates the digital transformation in the grocery retail industry. “In a matter of a couple of weeks, we were already ahead of our end-of-year goal. A week later, we were ahead of our 2021 goals, and a few days after that, we were ahead of our 2022 goals. And so, at a certain point, we stopped counting.” – Instacart. As people are more used to the new way of grocery shopping, and a lot of solutions introduced to digitally transform the grocery stores, I always have this question “What’s the future grocery shopping will look like?”