Amazon testing system that eliminates checkout lines at grocery store

The Amazon.com Inc. application icon is displayed on an Apple Inc. iPhone in Washington, DC, US, on Dec 5, 2016.
The Amazon.com Inc. application icon is displayed on an Apple Inc. iPhone in Washington, DC, US, on Dec 5, 2016. PHOTO: BLOOMBERG

NEW YORK • Amazon.com has unveiled technology that will let shoppers grab groceries without having to scan and pay for them - in one stroke eliminating the checkout line.

The company is testing the new system at what it is calling an Amazon Go store in Seattle, which will open to the public early next year. Customers will be able to scan their phones at the entrance using a new Amazon Go mobile app. 

The technology will track what items the customers pick up or return to the shelves and add them to a virtual shopping cart in real time, according to a video that Amazon posted on YouTube. Once the customers exit the store, they will be charged on their Amazon account automatically.

The concept store and automated checkout mark Amazon's latest attempt to upend the grocery business. The company began experimenting with fresh food in 2007, when it started AmazonFresh, a delivery service now active in 16 US markets. 

Amazon has since started opening pick-up centres, where shoppers can collect their Web purchases. Perhaps recognising that many people remain reluctant to buy fresh food online, sight unseen, the company is now testing what looks a lot like a convenience store.

  • How Amazon Go works

  • 1 To get started, you need an Amazon account, a supported smartphone and the free Amazon Go app.

    2 Walk into an Amazon Go store that features Just Walk Out technology.

    3 Hold the phone to a scanning device that works like a turnstile and it registers that you have entered the store.

    4 Put the phone away and start shopping - picking up items and adding them to your bag.

    5 A combination of the Amazon-developed artificial intelligence, computer vision from multiple cameras tracking each customer plus data from multiple sensors detects what items you have picked up, retained or put back on the shelves.

    6 As you leave the shop, the system detects your exit and tallies the prices of items selected.

    7 No checkout cashier is needed. Your account is automatically charged for each item you selected, and a receipt is sent to you.

"Most people still have two requirements," said Forrester analyst Brendan Witcher. "One is, 'I want something today, I don't want to wait'. No. 2 is, 'I want to touch and feel the product before I commit to it'."

So if the Amazon Go concept works, will the company build small grocery stores in cities all over the country? Amazon is not saying.

But some analysts envision a combination of pick-up centre, fulfilment warehouse and small grocery store. After all, Amazon is already building urban warehouses, including a 4,645 sq m facility in midtown Manhattan, that handle same-day deliveries to local customers.

Selling fresh food is a strategy long employed by retailers to boost foot traffic and get people to make more purchases.

"I believe you're going to see growing offline presence in high-turnover goods, which is mostly groceries and household items," said Mr James Cakmak, an analyst at Monness Crespi Hardt & Co. 

Amazon employees are testing out the 167 sq m store on the company's campus, where they can buy ready-to-eat breakfast, lunch, dinner and snack options, as well as essential grocery items such as bread and milk, and artisanal cheeses and locally made chocolates.

Grocers have been experimenting with automated checkouts for years. But Amazon Go takes the concept to a new level.

"While it remains to be seen how well the technology works, the experience could be very compelling," said Mr Michael Chui, a partner at McKinsey Global Institute.

BLOOMBERG

VIDEO

See how Amazon Go works. http://str.sg/4AkM

A version of this article appeared in the print edition of The Straits Times on December 07, 2016, with the headline 'Amazon testing system that eliminates checkout lines at grocery store'. Print Edition | Subscribe