Amazon is unveiling massive smart stores all across the globe and it appears that the
e-commerce giant's plans for the future are beginning to take shape. Already,
we are seeing the massive rollout of automated checkout supermarket technology,
and the plan is to revolutionize the way people shop. In lay man's language, what Amazon is
looking to do is to radically change the way people shop. In this video, we will show you
how Amazon is changing the way people go with their shopping with the launch of its massive
Smart stores and automated technology. Amazon is the world’s largest online store
by a mile, with items worth billions of dollars bought via the platform daily. Not one to rest
on its oars, Jeff Bezos's company is setting plans in motion to launch full-sized supermarkets with
automated systems. What this means is that the company is gradually moving towards physical
shopping; The company wants to begin the operation of physical supermarkets where people can shop for
groceries and other items like they do online. Planning documents released to the press show
that the store will be constructed in Brookfield, Connecticut. The store has a two-word dark gray
logo above the entrance of the supermarket with an online order counter for pickups and
a full-service department section. The plan also shows more than a dozen entry gates and mounted
racks in the ceiling with cameras covering the entire shopping area.
This setup is similar to what is found at Amazon Go convenience stores.
To enter the Brookfield supermarket, shoppers will use swiping technology, not with cards but
with their smartphones at the entry gate. Once inside, they will be tracked wherever they go
with cameras, sensors, and software algorithms. Whatever they pick is automatically charged
for when they eventually exit the gates. However, for all the positive feedback and
reports, the smart store idea is not without its challenges though. Creating such a smart
store and operating it within a 24-hour cycle is very expensive with mounting overhead costs.
The cameras, sensors, and software cost a fortune to acquire and they require a team of real-time
experts to operate them. Fortunately, for Amazon, its large cash tranche has ensured that
these challenges will be overcome. If the Smart store idea ever pulls through, it will give the
company an advantage over rival supermarkets. Already, commissioned startup companies are
currently testing the camera-based technology in select labs. And the executives at these startups
believe that the technology is a year or two away from commission. Once they are ready,
they will be installed as cashier-less systems in all Amazon supermarkets.
The Smart store idea has attracted criticism from various quarters, particularly from labor unions.
Critics argue that the move for cashier-less stores will eliminate the need for labor.
In the US, cashier jobs are one of the most common jobs in many states. With so many people employed
in the labor market as cashiers, the rise of smart stores may most likely lead to massive layoffs.
In its defense, Amazon has said that the move, which it tags the “Just Walk Out” program,
is designed to provide shoppers with convenience and not as a cost-cutting measure. It further went
on to say that over the last year, it has created thousands of jobs in its grocery department
after it launched its very first FRESH store. Despite the criticism, Amazon does not look
like shelving its plans for the future. This is plainly obvious when you consider
the major move the e-commerce company is making in India. With expansionist plans as
part of its strategy, Amazon is looking to take its dream of smart stores to other countries.
Chief among them is India. The latest attempt for its India-specific program is a physical
store powered by algorithmic software that will be designed to keep a log of inventory for shoppers
and the software will supply a database with a QR code for each item. So how will it work?
When consumers walk into any of the Indian stores, they can scan the QR code with the
Amazon app on their phone. When they do this, the app will bring out all the items available in the
store with the price, discounts, and past reviews by previous customers displayed for them to see.
Then they can go on to select the items that they want to buy and pay for them with their
Amazon Pay account. This in itself, is great news for Indian shoppers because, as it stands, Amazon
Pay supports multiple payment services in India including debit and credit cards and UPI's.
The Smart store project was tested about two months ago, and it was a massive success. Now,
plans to open it to the public officially are in the final stages. According to reports, more
than 10,000 shops including small retail shops, big bazaars, Supermarkets, MedPlus, and many
more have deployed the system independently and collectively and it seems to be working. Amazon
has also said that its digital storefronts will be a win-win situation for shop owners and shoppers.
The idea behind this new move is to simplify the shopping experience for everyone involved.
Rather than entering the shop to handpick items on their own and to hand over physical cash,
the automated system will handle the entire process for both shop owners and
shoppers. At the end of the shopping process, they get rewards via their Amazon Pay accounts.
Besides the Amazon Pay features that Amazon is offering, another unique benefit that will be
offered to Indian shoppers is the Amazon Pay Later incentives. Under these new incentives,
shoppers will be allowed to pay for what they buy in installments. This new scheme is suitable for
both parties involved. The sellers and buyers. Sellers will see their sales margin increase,
while buyers will be able to use the credit facility to buy what they want even if they do not
have sufficient cash balance to pay for it. Amazon has said that this new feature
is at the exclusive discretion of both parties and will not be taking any kind
of commission from buyers or sellers that use its platform for credit shopping.
Amazon’s Smart Store and grocery shopping initiative is a new push into new market ranges.
This move is evident in other countries with a large market size and what makes its move even
more daring is that it is entering a territory previously dominated by the Walmarts of this
world. After gaining total dominance of the online shopping space, it appears that operating
in the physical shopping space is the new vision. While this move is not surprising, what is unique
about Amazon’s business model is the approach. By engaging physical stores in a country where it is
present, Amazon will physically expand its reach and network of warehouses and delivery routes,
and industry experts believe that this move will only further drive up sales.
In India for example, there are more than neighborhood stores run by low-wage families. The
physical shopping market is ten times larger than the online shopping market in India, unlike other
developed countries in the West. Establishing contact with physical stores, therefore,
becomes a win-win situation. Furthermore, no retail giant has the capacity to offer faster
delivery to buyers than physical stores. So the economics behind the move makes perfect sense.
With Amazon Pay already accepted at millions of physical stores,
customers will get to enjoy a satisfactory shopping experience through shops owned by locals
or any Amazon Smart store. By also attaching rewards to shopping, shoppers will be motivated
to use Amazon’s platform even more similar to the benefits other physical retail giants
currently enjoy with the gifting of gift cards. There are several downsides to this new move by
Amazon. For now, the number of negatives remain unknown until the plan takes full shape. But from
the general point of view, the criticisms by labor unions against the new Smart Store initiative
appears to hold some weight. If everything goes digital, there will be less demand for labor in
these smart stores. Meaning, many may end up losing their jobs, especially if other chain
stores adopt the same strategy. Secondly, there is tax risk attached to it, especially
as it relates to stores not owned by Amazon. Small businesses that leverage Amazon’s digital
platform will undoubtedly drive up sales ,however, many of them may under-report their revenues so
as to pay less tax to the authorities. The Implementation of Amazon Go stores and
networking with private shop owners may not be a bad idea, but it comes with several risks.
Only with time will we know whether the opportunities created will outweigh the
risks involved. So is there an automated checkout store in your area ? Let us know in the comments,
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