Last week, I spent nearly 45 minutes in the checkout queue of a leading supermarket in the Colombo suburbs. It was a Sunday and the crowd was naturally bigger than on a weekday. I thought to myself whether there was a way to pay without necessarily standing in a queue.
Local supermarkets have taken several steps to reduce the queues, such as having multiple counters, laser barcode scanners and the latest “pay wave” card readers. But still, the queue exists, especially at “rush hour” when people pop in to do their groceries on their way home from work. (Hence the catchy slogan “Gedara Yana Gaman” (On Way Home) by a popular supermarket chain).
My wish has just been granted, not by a local supermarket, but by the most unlikely “retailer” in the world – Amazon. It is the biggest online retailer in the world, now present in nearby India and Singapore as well. Amazon has dabbled in retailing for a few years now, first with books (its first and still the biggest product) and now with other categories of products. It recently acquired the Whole Foods supermarket chain for nearly US$ 14 billion, marking a major push into physical grocery sales.
Amazon
Before we dig further into the subject, it is important to know why Amazon of all companies wanted to enter the retail industry. I have ordered goods online, but there is nothing like really touching and feeling a physical product. Some products such as furniture, clothes and cars must be seen in the “flesh” to truly appreciate their beauty and functionality. Besides, one gets the opportunity of interacting with other people including staff and other customers while shopping at a physical store. And, there are plenty of people who do not like to shop online due to cyber security concerns. Finally, retail is still way bigger than online – even in the biggest online market in the world (USA), it accounts only for less than 20 percent of all sales of consumer goods. Retail is never going to die.
But the biggest problem with retail is the one I experienced – the long wait at the checkout. Amazon has solved this age-old problem with a process called Amazon Go which enables shoppers to enjoy the maximum convenience of shopping without the need to stop and check out. This process, also referred to as “walkout shopping,” saves both the store and its shoppers time and money. The Amazon store has no cash register or payment kiosk. Instead, shoppers scan themselves into the store using the free Amazon Go app, shop as normal, remove items from a store shelf, place items in a shopping bag and leave the store. Amazon Go doesn’t require shoppers to individually scan each item.
Billed
The items are in turn billed to an authorized Amazon.com account accompanied by a detailed email receipt. Cameras and scanners monitor the shoppers to minimize errors – for example, if you return an item from your cart before heading out, you will not be billed for it. With the application’s “Just Walk Out Shopping” experience, the consumer turns on an Amazon Go app, enters an Amazon store, removes desired products from shelves and departs. No lines, no checkout, no hassles. It is almost like online shopping in other words.
The technology that powers Amazon Go is similar to the advanced computer vision and artificial intelligence used in self-driving cars. It is the application of sophisticated artificial intelligence, machine learning and related developments that supports a store where customers take what they want and leave.
The long-term implications are hard to predict, but this is a development that could revolutionize much of retailing as we know it. Just as Uber and Lyft have managed to derail the taxi and rental car industries, Amazon Go can disrupt the way consumers interact with retail operations.
This may not be foolproof – Amazon spent more than four years developing the technology but teething problems will occur. Amazon has infused a fair bit of artificial intelligence into the system, but will it be stumped by something uniquely human such as, a child drinking a soft drink bottle and replacing the empty bottle back on the rack ? However, machine learning will advance with every passing day and such stores could be commonplace just 10 years from now.
There are other factors at play here. Fears have already been expressed that cashiering and bagger jobs in supermarkets will be reduced or eliminated over the next few decades, if not years. But there will always be a role for human workers in a retail store. Industry watchers believe it is common for technology at first to be perceived as destroying jobs. But in the long run, more jobs are created than lost.
Robot
There is also a fear that AI and actual robots could take more jobs away in the retail sector. Could a future supermarket have robot assistants instead of human ones ? Fear not, the first “robot in a store” experiment has failed miserably. Fabio, the robot in question employed at a store in Scotland has been given marching orders after failing to understand customers’ requests and directing them to non-existent aisles. It was last seen handing over portions of meat to passing customers. Apparently, the robot had freaked out many customers though surprisingly, the store workers (who should feel threatened by the robot) embraced it warmly and some even wept while it was being put back unto a box. This shows that there is still room for robotic and human shop assistants to work side by side in supermarkets of the future. Robots will never fully replace humans because there are some human judgments robots will never be able to make but they will replace some functions. There are a lot of mundane tasks that do not require human creativity or a human level of sensitivity. A lot of those tasks can be automated.
For better or for worse, supermarkets have changed the retail landscape here and around the world. Today, the conventional “kadey” (boutique) faces the risk of disappearing because supermarkets are coming up almost every 500 metres. But one cannot deny their sheer convenience, easy access, easy parking and wider choice of goods.
They are known to generally observe food safety and storage regulations unlike smaller boutiques – many corner grocery stores tend to turn off their freezers at night, for example. Innovation keeps this industry going. Amazon has introduced perhaps the most revolutionary step in supermarket shopping, which is certain to be picked up by other retailers in the next few years. Sri Lanka hopefully will not be left behind in this quest to offer a completely hassle free experience to the customer.