ETA Expert Insights: The Amazon Go Experience

By The ETA Mobile Payments Committee

The Hype

My first experience at the Amazon Go cashier-less store was captivating. Most other people probably wouldn’t have this reaction, but being in the payment industry and knowing how advanced the technology has to be to make this store work, I found it a memorable experience. This is also a significant step in the movement toward a retail store experience that doesn’t require cash or a credit card.

The Amazon Go Store is a concept grocery store that can only be accessed with an Amazon account. It is filled with everyday items and does not require a customer to ‘check out’ as we currently know. The store uses a combination of cameras, store mechanics (things like layout and item placement) and artificial intelligence (AI) to determine who a person is and what items they have purchased.

The store is located in the heart of Seattle’s South Lake Union neighborhood where Amazon has made a significant footprint. This is the first store of its kind and recent reports suggest Amazon will open two more in San Francisco and Chicago this year. From the outside, the store looks like a normal corner grocery store, except busy with Amazon employees dressed in orange shirts walking around corralling people into the store (which as a maximum of 150 at a time).  However, upon entering the store, one feels an immediate sense of being watched. The feeling of walking out of the store without paying could make a person feel as if he/she is shoplifting.

The Experience

Each customer will need an Amazon account and also the Amazon Go app (available in the app store) to enter the store. The Amazon Go app contains a unique QR code that provides the customer access to the store, as well as a link to their credit card on file with them. Amazon staff guide and educate customers at the front of the store, reminding them to download the app and have it ready when entering. The entry into the Amazon Go store is similar to those of other secure buildings in that it has waist-high glass gates that open when someone scans their QR code. Once inside the store, the customer will notice there are very few employees. The overall appearance of the store design is structured and simple, no over stacked shelves but fresh produce and pre-made food. The customer will start shopping and simply walk out, no check-outs or lines. Amazon will then send an email receipt and app notification of the purchase.

The Technology

Amazon has positioned this design of the Amazon Go store as ‘just walk out technology’ and the next generation of the retail experience. It certainly has that exciting feeling at the beginning and one can see how the concept and technology could be expanded across the country, possibly changing the way we all shop.

Cameras are scattered across the ceiling, pointing at shelves and shoppers, calculating which shoppers have which items. The cameras are visible if one looks up, however they are not intrusive and blend into the background. In combination with sensor-balanced shelving, Amazon uses infrared sensors and facial recognition technology to reduce the risk of matching the wrong item to the wrong shopper.

Amazon Shopper History: Amazon has a lot of historical transactional data on most individuals and they plan to use this to determine the likelihood a certain item will be selected based on each shopper’s profile. Along with machine learning algorithms to determine the accuracy of the shopping basket, Amazon is using software to drive the purchase process. Amazon knows a lot about the consumer’s buying behavior, and now they are using that knowledge and technology to streamline the in-store experience.

What Does This Mean for Contactless Payments?

This fundamentally helps change the consumer’s habits when buying everyday goods. If the Amazon Go store technology can be scaled across the country and used in grocery stores on every corner, usage will grow and consumers will become comfortable with the change in behavior and will start reaching for his/her phone to pay at the check-out rather than a credit card.

Mobile wallets should embrace this movement. Amazon is known for creating new product categories like the home assistant, Alexa, and also driving existing industries to new heights. Mobile wallets are now partnering with retailers to help drive customers to their stores and the success of the Amazon Go store can help transform the retail shopping experience.

The Future

The Amazon Go store concept could change the way all physical retail stores are designed. If the concept can be scaled across the country, many other retailers will take notice and will start investing in this technology.

This will have a massive impact on the general mobile payment acceptance efforts. The store requires each user to use their phone to enter the store. The imbedded consumer behavior changes are enormous. Shoppers in the store still had their phones out and in-hand during their shopping experience,

What does the Amazon Go Experience have to overcome?

Privacy – Amazon has always had a good relationship with its customers and has built trust that has allowed them to build a concept store that is using transactional data and algorithms to determine who a customer is and what he/ she is buying.

Scalability – setting up the hardware. Obviously, this was expensive for Amazon and I’m sure there are still issues they need to sort out. There are other retail tech companies like AVA Retail that are taking advantage of this shift in consumer behavior. They are creating a platform to allow midsize retailers who don’t have the resources to build an Amazon Go experience from the ground up leverage their technology and analytics.

The Amazon Go Concept store is beneficial for the contactless payment global push. It fundamentally helps to change consumers’ behavior when shopping by helping them get accustomed to using phone rather than a card to make purchases. Amazon Go has successfully designed a retail experience around the mobile device. And consumers are ready for it.

The ETA Mobile Payments Committee’s mission is to identify and address the key issues to facilitate growth and expand opportunities afforded by technology to transform the future of commerce, while ensuring that the lives of every consumer touched are enriched and improved. Click here to learn more.