In 1995, Borders and Barnes & Noble both maintained nationwide networks of brick-and-mortar bookstores. This made it nearly impossible for smaller retailers to compete.
Then came Amazon, which began selling books online.
What once was an insurmountable advantage became a liability as major book retailers had to divert dwindling profits toward rent, overhead and other brick-and-mortar expenses.
As Amazon grew, it extended this winning formula to other retail markets, offering an unbeatable selection at unbeatable prices. No matter how powerful the company became, there was always a major limitation to Amazon’s growth potential.
Even with expedited delivery, customers had to wait at least one day to receive their items. This is why Amazon’s food selection has always been limited to nonperishables. You can’t easily shop online for tonight’s dinner.
But with the launch of Amazon Go, this limitation could soon vanish.
What Is Amazon Go — and Why Does It Matter?
The Amazon Go pilot store looks like any other brick-and-mortar supermarket, but there are a couple of key differences:
- To enter the store, you scan your phone at a turnstile. Once inside, you place whatever food items you want in a basket. These additions are automatically logged on your mobile device.
- When you’re finished, you simply walk out. There’s no need to stand in line or scan your items. Your phone serves as automatic checkout — no need for human cashiers or credit card swiping.
How can any grocery store compete with this ease and convenience?
The benefits don’t stop there.
Because the entire shopping experience is synced with your phone, you benefit from personalized recommendations and made-to-order specifications. If you want a hot cup of joe, for example, the in-store coffee machine would prepare yours just the way you like it — whether you’re at an Amazon Go store in Tokyo, Paris or New York.
Cost is another major selling point of the Amazon Go model. Staffing each physical store requires three to six people on-site. They’d be there mostly for inventory purposes (until this gets automated as well). As a result, Amazon Go can reduce its operating costs, and pass the savings on to the consumer.
Given these advantages, soon every brick-and-mortar store would have to consider adopting the Amazon Go model. Perhaps that’s worth celebrating. Who doesn’t want faster, cheaper and easier shopping?
There’s a potential dark side to all this automation, too. Let’s take a look.
The Downside of a Fully Automated Amazon Go World
To deliver highly personalized shopping experiences, Amazon must collect a ton of data. This involves tracking the movements, actions and locations of every user in the Amazon Go system.
Companies already collect our data through loyalty programs and browser cookies, so this “danger” isn’t entirely new. But in an Amazon Go world, the amount of data capture would become astronomical. From this, a whole host of worrying questions arise.
1. Who Controls This Information?
Everything you upload to Facebook belongs to Facebook. The same is true of anything you search on Google or post on Twitter. These companies make billions off the information they collect from us.
Why would Amazon Go (or its copycats) act any differently? Imagine the profit potential that exists. For example, drug companies and insurance providers would pay dearly for a list of users who buy gluten-free cookies or diabetic desserts.
2. Can Your Shopping Information Be Subpoenaed?
Amazon recently made headlines when one of its Alexa-enabled Echo devices became a potential murder witness. Authorities wanted access to the voice transcriptions that were logged on the digital assistant in question.
For privacy reasons, Amazon continues to fight this subpoena request. But as data collection becomes more widespread, avoiding such requests could become more difficult.
3. Can Your Personal Data Be Hacked or Stolen?
How you like your coffee prepared probably isn’t a closely guarded secret. And you likely don’t care if someone knows about your Oreo cookie obsession. But what about all the other personal data that goes into your ever-growing Amazon Go profile?
For example, hackers could reverse engineer your medical history by tapping into your shopping preferences. What happens if this data falls into the wrong hands? Once it’s out there, getting it back is next to impossible.
4. Can You Opt Out of This Data Collection?
In the early days of the Internet, opting out of “tracking” programs was fairly easy. You could check a box, unsubscribe or disable your connection to prevent others from collecting information about you.
In theory, you could opt out of Amazon Go by simply avoiding its stores, and sticking with human cashiers (if and when they’re available). Is that really enough in a world where household appliances, mobile devices and web browsers track our every move. What does opting out even mean in the Internet of Things?
Preparing for an Amazon Go World
There are many exciting and terrifying changes on the horizon. Shopping will become easier, faster and cheaper, but privacy boundaries also will become more permeable and susceptible to abuse.
As a consumer …
- The bad news is this transition will likely occur no matter what, so there isn’t much any of us can do to stop it.
- The good news is this shift will likely happen slowly and organically — and hopefully, this will give us enough time to adjust.
If you operate a brick-and-mortar store, the news is also potentially good and bad. You’ll want to keep a close eye on Amazon Go’s development. The success of this pilot project could revolutionize the retail landscape — and you’ll need to evolve accordingly.