Amazon Go, the online retailer’s “Just Walk Out” convenience store in downtown Seattle, is still in private beta mode three and a half months after its unveiling – and some reports suggest the concept is facing tougher sledding than anticipated.
The checkout-free store is just one of several brick-and-mortar experiments under way at Amazon. A different drive-up concept, AmazonFresh Pickup, seems nearly ready for its debut in Seattle’s Ballard neighborhood and SoDo district.
Unlike AmazonFresh Pickup, Amazon Go envisions a system where customers can walk in off the street, pick up anything they want, and “just walk out.” Their purchases would be tracked using high-tech object recognition and inventory management systems, matched up with the customers’ mobile app and automatically charged to their Amazon account.
Since December, Amazon has been testing the system at an 1,800-square-foot store on Seventh Avenue. Only employees are allowed to enter the store, but when the store was unveiled, Amazon promised that it’d be open to the public in early 2017.
Amazon has issued no updates since December, and this week, Bloomberg News reported that Amazon’s “Just Walk Out” just isn’t ready for prime time yet:
“The technology has been crashing in tests when the store gets too crowded and requires human quality control, people watching video images to make sure customers are charged for the right things, according to a person familiar with the plan.”
We’ve reached out to Amazon for comment on the Bloomberg report, and we’ll update this item with anything we hear back.
Industry analysts told GeekWire they’re not surprised to hear the beta test is turning up challenges.
“The Amazon Go model relies on quite a few recent innovations — computer vision, sensor fusion, deep learning, and presumably others; transforming those into a specific system will naturally require a lot of time and testing,” Tom Caporaso, CEO of Clarus Commerce, said in an email.
Caporaso said he expected Amazon to encounter more snags as the experiment proceeds from well-controlled transactions to less typical scenarios.
“When you add the X factor of occasionally random behavior from a large number of people acting in their own interests, it’s probably not surprising that the results aren’t necessarily measuring up to expectations,” he said.
Don Stuart, a managing partner at Cadent Consulting Group, agrees that perfecting the Amazon Go platform is a huge challenge, even for America’s biggest online retailer.
“I know they want to get it right before they take it out of beta,” Stuart told GeekWire. “Technological failure could be a huge hiccup. … There are all sorts of things that have the potential to crash the system.”
For example, Amazon’s store monitoring system would have to notice when customers are carrying loose fruit and vegetables of various sizes, or when they’re lugging deformable items such as bags of rice. The image recognition system would also have to keep track of customers’ identities even when they take off their jacket, pull down a cap or put on a muffler. (Stuart and other experts delve into the challenges in a report published today by Convenience Store News.)
Meanwhile, other retailers are pursuing different approaches to reduce the frustration of waiting in a checkout line. Walmart is experimenting with an updated version of its scan-and-go app, and Kroger has been phasing in a sensor system aimed at anticipating how many checkers will be needed in its grocery stores at a given time.
Kroger says its system can cut the average wait time from four minutes to less than 30 seconds. (The Seattle area’s QFC grocery chain is a Kroger subsidiary.)
“They pretty much know how many people are in their check lines, by lane, by minute and by store,” Stuart said.
Last week, Barron’s Next quoted an analyst at Morgan Stanley as saying that consumers care more about price and convenience than about the wait in the checkout line, and that Amazon Go’s perceived advantage was already fading.
“While frictionless shopping differentiates ‘Go,’ it is unclear if this is enough to make the concept viable long-term,” analyst Vincent Sinisi was quoted as saying.
Despite the cautionary signs, Caporaso said he expected Amazon to persist.
“Unless and until Amazon Go proves utterly incapable of being implemented, Amazon will no doubt continue to work on refining the system, and other retailers will need — and want — to develop similar innovations,” he said. “If it can be achieved in some form or fashion, a ‘Just Walk Out’ retail environment would offer consumers a better shopping experience, with greater speed and convenience, which is sure to build loyalty, which is every retailer’s goal.”