Two intrepid Yukonomist megatrend researchers recently slipped into the new Amazon Go store in Seattle on a mission to keep you informed about the latest robo-trends.
Well, not exactly “slipped.” One of them forgot her Amazon password and got hung up in the entry turnstile.
It’s a remarkable system. You download the app and enter your Amazon account credentials including your credit card. Then you flash your phone at the turnstile and enter the store. Once inside, you just take things off the shelf and put them in a bag or your pocket and walk out. A sophisticated system of cameras and sensors keeps track of you and what you grab as you move through the store. After you leave, the app shows your receipt.
The first Amazon Go location is a downtown convenience store. It has lots of prepared meals and those packages of uncooked ingredients that allow urban condo-dwellers to quickly “home cook” a meal after work. One of my spies told me she would definitely shop there for lunch or after work if she worked or lived downtown.
The store has more human staff than you would think. This is probably because it is a test location. The whole concept is so mind boggling that the customers need coaching to navigate it. Once people get used to it, I suspect there will be a lot fewer humans working there.
Not everyone will be taken into the future, as Ilya Kabakov once said. Except for the guy who checks your identification beside the beer and wine cooler. His job is probably safe, for now.
The store is part of a broader Amazon assault on retailing business models. This goes beyond Amazon Go and the company’s eponymous website, which captured an astonishing 44 per cent of U.S. online commerce in 2017 according to data from One Click Retail. Even looking at the massive overall U.S. retail market, Amazon is estimated to have an impressive four per cent market share.
Amazon also offers Amazon Prime, a member-based service which offers free shipping as well as free video streaming and music. There is Amazon Fresh for groceries. And my researchers also observed an Amazon pick-up location. You order groceries or items and pick them up on your way home from work, pulling your car briefly into a stylishly designed loading dock on a major road. As with Amazon Go, payment is automatic and you can take your goods home without having to wait in line to pay.
What does all this mean for the Yukon? Will these trends ever reach us?
They already have, although no one has pushed as far as Amazon yet. At a local grocery store, you can choose between human or a clunky automated check out. At a Main Street coffee shop, automated coffee makers serve basic drip coffee so the baristas can focus on complex and more expensive drinks. Several popular fast food franchises in town know their corporate headquarters are rolling out smartphone and kiosk ordering.
I have tried a number of these offerings in the big city. You just punch your Krusty Burger order into a big screen on the wall, then stand to one side and watch internet cat videos on your phone until your number is called. It seems popular with many customers.
They are also popular with business owners for a number of reasons. Places from Seattle to Ontario have been boosting minimum wages, and an unintended consequence of this is to encourage automation in shops. Business owners also like that machines always show up for work, don’t pilfer and seldom need breaks.
On the other hand, robo-retailing systems require high up-front capital investment, good internet connections and servicing by expensive computer experts. They also open new avenues to hackers, whether fraudsters, ransomware mercenaries, disgruntled competitors or former employees.
It is too early to tell how far the business benefits of robo-retailing go. The Amazon Go location remains in test mode, as they test business processes and gather more data to train the machines.
In fact, the Yukonomist researchers accidentally gamed the Amazon Go system. When one researcher’s app wouldn’t work due to a forgotten password, she just slipped behind the other through the turnstile. After they shopped and left the store, only the items picked up by the first researcher showed up on the bill.
The second didn’t know it, but she was on a free shopping spree courtesy of Amazon’s robots.
Is it shoplifting if you thought your robot overlords were watching what you took from the shelves, but they lost track of you? Was it a way for Amazon to compensate us for helping train their system? Or does someone owe the CEO of Amazon some cashews and granola bars?
We’re waiting to see if they go back through the television footage and figure out where the cashews went.
Even if the process didn’t go flawlessly this time, the test store in Seattle shows how quickly the robo-revolution has accelerated. Even five years ago, this kind of thing was science fiction.
Keith Halliday is a Yukon economist and author of the MacBride Museum’s Aurore of the Yukon series of historical children’s adventure novels. He is a Ma Murray award-winner for best columnist.