Amazon Go transforms checkout

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SEATTLE — Extending the bounds of brick-and-mortar retailing, Amazon.com Inc. is debuting a mini convenience store requiring shoppers to neither scan nor check out products.

Instead, items that consumers pick off shelves at the 1,800-square-foot Amazon Go store are automatically charged to their Amazon accounts through a free app, after they swipe their smartphones at the entry. Billed as having “the world’s most advanced shopping technology so you never have to wait in line,” the store employs the same types of advances used in self-driving cars: computer vision, sensor fusion and deep learning. The technology detects when products are returned to shelves and deducts their prices from the consumer’s bill.

The outlet offers ready-to-eat breakfasts, lunches and dinners, as well as snacks made fresh by on-site chefs, local kitchens and bakeries. Other products range from staples such as bread and milk to artisan cheeses and locally made chocolates. Chef-designed Amazon Meal Kits have ingredients to make a meal for two in about half an hour.

The unit, which is open to Amazon employees and will be open to the public early next year, is on the street level of one of the company’s new office towers in the downtown area here. It was conceived four years ago when “we asked ourselves: What if we could create a shopping experience with no lines and no checkout?” the Amazon website says. “Could we push the boundaries of computer vision and machine learning to create a store where customers could simply take what they want and go? Our answer to those questions is ­Amazon Go.”

The company has not revealed expansion plans for the concept. Amazon’s other brick-and-mortar formats, such as bookstores, have historically been rolled out slowly. Another food store prototype, with curbside pickup but no in-store shopping, is slated to open imminently at two Seattle sites.

A third supermarket concept, a 30,000- to 40,000-square-foot outlet with bare bones merchandising akin to Aldi and Lidl, has in-store shopping and a drive-through offering, according to The Wall Street Journal. It has a limited fresh selection along with touch-screen orders for delivery. The format will reportedly debut in late 2017, although Amazon denied any plans to unveil such a concept. All together, Amazon foresees rolling out more than 2,000 grocery stores, the Journal said, depending on the success of the pilots. Amazon also denied that, with a company spokeswoman telling USA Today the figure was “not even close.”

The premiere of Amazon Go is seen as a response to the hurdles encountered by e-commerce food sales. As much as consumers have eagerly turned to online outlets in other categories, web sales of groceries have accounted for just about 1% of the $674 billion U.S. market, according to Kantar Retail.

Amazon Go could also challenge nontraditional food retailers that have made inroads in the market with expanded selections of groceries, including drug chains and convenience stores. Those trade classes have thrived on meeting food shoppers’ needs for fill-in trips. At the same time, Amazon Go’s ambiance and mix looks to be comparable to that of Whole Foods Market Inc.

One competitor that was unimpressed by the launch of Amazon Go is Costco Wholesale Corp. “Honestly we had a version of scan and go literally 20 years ago,” chief financial officer Richard Galanti said during Costco’s third quarter earnings call. “A member would walk in, get an RF gun, radio frequency device, walk around, scan their own items, come up to the front, hand that thing to the cashier, and the scanner, and they print out a receipt.”


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