Could Amazon’s brick-and-mortar invention eliminate checkout lines?
The notion that brick-and-mortar stores are facing total extinction in the face of e-commerce is clearly a gross exaggeration, especially in light of the prominent tech companies and e-tailers making moves into the physical world.
Google’s recent store-within-a-store concept for Android products in the U.K. and Amazon Locker offer two indications that the relationship between online and in-store is still evolving. Ever ambitious, Amazon may be trying to shape that evolution in a way that solves a classic problem of retail. Amazon could be trying to do away with the checkout line in stores with a groundbreaking tech-enhanced store format.
Re/Code recently reported it had unearthed a patent from Amazon that describes a type of store in which RFID technology and ubiquitous video cameras are used to enable customers to walk in, pick up an item, walk out and be billed automatically. It is speculated that facial recognition capabilities would work in conjunction with tracking software to determine a person’s identity and apply billing to the correct individual.
The patent further mentions the capability to tag a user or item with a "borrow time," so that a facility could conceivably lend items to customers and automatically charge a fee when they weren’t returned.
Re/Code mentioned this could make sense in light of Amazon’s partnership with college campuses. In February, Amazon partnered with Purdue University to open a pick-up and drop-off location on the campus. This store has been billed as Amazon’s first true brick-and-mortar presence.
Amazon is planning a second location on the Purdue campus and is also working with the University of California, Davis and the University of Massachusetts Amherst on similar programs.
Discussion Questions
Could you see Amazon’s checkout-less store patent being put into practice? What do you see as the challenges and opportunities associated with such a checkout process?
I wonder why everyone keeps forgetting about those pesky laws of physics. RFID doesn’t work so well through liquids and metal. So unless Amazon is going into the clothing business, all on hangers or wooden shelves, I just don’t see it.
The part of this piece that IS important is that stores are not going away. A.) People like them, and B.) While calculations like “cost per employee per sale” makes it appear that stores are an anachronism, it appears that retailers who use both terrestrial and virtual stores are far more profitable than those who don’t.
I do think improvements in checkout are needed—for sure—but I tend to think of people being involved in the process. Shorter lines and friendly employees. Think Trader Joe’s—that’s a fun check-out experience.
Even if you are on the right track, you still get run over if you are not moving forward. So many retailers seem to be stuck trying to fix retail of the past.
One thing you can say about Amazon is that they are always moving innovation forward, even if it isn’t always on the right track or a defined track.
Too early to tell if this technology will work reliably in the daily grind of retail. But it is definitely time to start ripping out those cash registers and antiquated checkout lanes.
The mentality of “committing” to a purchase is an important part of a retailer truly making a sale. This technology subverts the key “moment of truth.”
I do not think that disintermediating the shopper commitment process is in the interests of sellers (either retailers or brands). Retailers may be dealing with returns of used product and brands may have trouble selling (rather than lending) products.
Sure—I bet that in testing, shoppers would pick up more items than they may have otherwise, and would then get stuck with the bill. But shoppers learn fast. I believe this technology would re-train shoppers to behave differently: more like library borrowers.
Why do we give Amazon so much PR and noise on concepts that might roll and ones that will not roll? Retail always changes—Amazon has nothing that special. When others in the commerce world, from writers to analysts to retailers, quit thinking Amazon is so amazing then maybe they will see the light. The light in retail—competition! Amazon’s distribution centers are not that exciting considering the amount of merchandise that they bring in, cross-dock, prep, pick and load. Budweiser and other distribution centers in unique parts of retail are amazing at how they have adapted to handle the demands for beer, pet products, tires and more.
Amazon’s core is marketing and filling in the gaps that retailers leave. I use them to find products, I do not trust the opinions of their shoppers. I am confident that many are rigged. I go to real product retailers to buy things—I visit Amazon then go shop. Kindle is not bad. Apple will take that from them when they decide the time is right.
So get off the Amazon kick and get back to real retail.
While the checkout process could be improved dramatically (why have 14 lanes if you’re going to staff two?) a friction-free “checkout” is a horrible idea. Think about those pesky EAS tags, the need to put multiple items into a bag, the personal interaction, etc. Is it possible? Sure. Is it smart? No.
Amazon is willing to go first and in some cases fail fast while it’s perfectionist, risk-averse competitors sit on the sidelines. Will checkout-less stores scale? Will RFID get a second wind? Will Dash buttons become ubiquitous? Who knows. In the meantime, Amazon is keeping retail on its toes by setting a new standard for retail innovation in both pace and process.
The e-commerce companies have acquired a strong experience in purchasing, distribution and logistics. Their direct to consumer “no-see-um” practice when placed in a brick & mortar live routine is of very little practical value. Simple subtleties as in “reservation,” “build to order,” “carried with,” and “pick up later” are totally new to their vast majority way of doing business.
Setting and modifying priorities on a sales floor several times a day will most definitely create havoc in e-commerce corporate offices that are unaware of how this must and will happen. In their current way of doing business, customer service is given time and tools to defuse consumer seditious behavior and immoderate demands with time delays and the ability to bring in resources from anywhere. Consumers in an e-commerce world can not barricade or unhinge other shoppers during their simultaneous visit to the store.
All of these fun things and more are there for the newbies trekking into the need-it-now world of retail. Which, by the way, will never go away as in the food and entertainment plus many other parts of retail. E-commerce is and will grow in all aspects of retail, but to maintain that it will replace or retire anything is credulous.
Accuracy is the biggest challenge.
In a word? No.
Store experiences will continue to evolve, checkout will get better, but do we know what that will look like? Not yet. Will it look the same for every retailer? Nope.
And that’s my 2 cents.
Another fascinating idea from Amazon. I totally agree with Carol on this one, Amazon is fearless when it comes to potential game-changing innovations. Even if it doesn’t become the new standard, Amazon is still putting all competitors to shame.
I did have one critique of Amazon’s latest plan: how exactly would returns work? It seems like you’d have to stand in line at that point because this idea doesn’t work so well when that’s taken into account.
There is nothing particularly new about this line of thought, although getting specific in a patent application may be new. And note that an application is NOT a patent. I have been having conversations with retailers and their suppliers for at least 10 years about the disappearance of checkout—a GREAT concern to brands who do major selling “at the checkout.”
Actually, Apple Pay, Google and a whole lot more are avidly working on this issue. I’m a little doubtful about what Amazon may actually get as far as patent coverage, but this is certainly the right focus for the third component of retail from the shoppers side:
1. Meeting of the minds between shopper and retailer.
2. Delivery of the goods.
3. Payment.
For a broader view of the whole spectrum: Retail “Spoons.”