Why are there so many employees in a cashier-less store?
Through a special arrangement, what follows is a summary of an article from Retail Paradox, RSR Research’s weekly analysis on emerging issues facing retailers, presented here for discussion.
One of the misconceptions I had visiting Amazon Go in Seattle was that there wouldn’t be too many store employees. In fact, there were so many, they got in the way.
Helpers were on both sides of the entry kiosk, assisting new customers to get in and out of the store. More were inside handing out complimentary shopping bags and answering questions from retail nerds like me. But assuming all those helpers may at some point disappear, several replenishment staff were constantly refilling the shelves.
The store is about the size of a fuel and convenience location — and you’re lucky to find more than a couple of employees in those — so Amazon Go certainly isn’t scrimping on the labor spend.
As to the technology, there is a lot in the ceiling — and I would guess far more behind the store’s walls. With gross margins likely similar to other food stores, the labor ratio to sales is likely higher, not lower, than a typical small box. With expenses associated with technology also higher, it leaves me to wonder how this store will ever be profitable.
But maybe Amazon doesn’t care about that. There are differing opinions about what the point of the Amazon Go store really is. Back in 2016, I opined in a column that, “Amazon seems to have learned how to use the media in particular to direct the conversation to what it wants to talk about.” But the message to retailers that should have been clear back then was: “Amazon embraces technology — and it is not afraid to fail.”
The absence of a POS checkout stand may be the biggest contribution to the industry’s thinking about the future store. Imagine a Whole Foods store without a scan-and-bag requirement, no stationery check-stand and no visible POS.
There’s certainly an experimental vibe to the Amazon Go store, since the retailer is applying a lot of technology to figuring out how to enable real-time and accurate visibility to inventory at the store shelf and sending replenishment instructions to employees on an as-needed basis. Whatever the technologies being used are, I haven’t seen anything like it anywhere else.
- A Slightly Different Take On Amazon Go – RSR Research
- Amazon: Gamer, Or Game Changer? – RSR Research
DISCUSSION QUESTIONS: Do you see Amazon Go as more of a testing lab, a marketing vehicle, or a viable concept itself with significant roll-out potential? What do you think Amazon is looking to learn from Amazon Go that may translate more broadly across retail?