Amazon plans grocery with no checkout lines

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Amazon plans grocery with no checkout lines

Amazon.com 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’s 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. Then the technology will track what items they pick up or even return to the shelves and add them to a virtual shopping cart in real time, according to a Amazon video on YouTube. Once the customers exit the store, they’ll 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 U.S. markets. Amazon has since started opening pickup centers where shoppers can fetch their web purchases. Perhaps recognizing that many people remain reluctant to purchase fresh food online, sight unseen, the company is now testing what looks a lot like a convenience store.

“Most people still have two requirements,” said Forrester analyst Brendan Witcher. “One is, ‘I want something today, I don’t want to wait.’ Number two 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 U.S.? Amazon isn’t saying. But some analysts envision a combination pickup center, fulfillment warehouse and small grocery store. After all, Amazon is already building urban warehouses, including a 50,000-square-foot facility in New York City, 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 buy more stuff.

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

Amazon employees are testing the 1,800-square-foot store on the company’s campus, where they can buy ready-to-eat meals and snacks as well as grocery essentials from bread and milk to cheese and chocolates. The Amazon Go store is just part of Amazon’s broader retail strategy.

“While it remains to be seen how well the technology works, the experience could be very compelling,” said Michael Chui, a partner at McKinsey Global Institute. “Completely removing the friction associated with checkout has the ability to be a competitive differentiator.” Bloomberg

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