Amazon has unveiled a grocery store without lines or checkout counters that they’re calling “Just walk out technology.” The new brick-and-mortar store, called Amazon Go, is an 1800-square-foot retail space located in Seattle that holds perishable grocery items like bread and milk, as well as pre-made snacks and fresh meals. Currently only open to Amazon employees, all you need is the Amazon Go app to enter the store and start shopping. Sensors, machine learning, and artificial intelligence track each customer through the store, adding items to their virtual shopping cart connected through their Amazon account. The technology senses when you put something down, taking it out of your cart as you do so, and once you’re finished you can just walk right out of the store. No cashiers, no cash or credit cards, “just walk out.”
These AI controlled stores open up a whole new possibility for product suggestion. Since Amazon is in control of your virtual shopping cart, they can see what items you are and are not interested in and combine them with your browsing activity, thus making more accurate suggestions when you shop online at home.
“Just Walk Out Technology” avoids Human “Loss Aversion”
The concept of “just walk out technology” brought forth by Amazon is not only making shopping easier for people that are in a rush, it’s also making the company more money as well. People don’t like to spend money, so when you’re sitting at a register watching the cashier ring up your order, you are more likely to ask them to put something back on the shelf for you once you see your total. The experience of feeling pain when we pay a bill is due to the behavioral economics theory loss aversion. The pain of spending is thought to be reduced in credit card purchases, because plastic is less tangible than cash, and we avoid feeling the loss of physical money.
However, even though you are not spending actual money, you are still going through the physical process of seeing your final total and swiping your card. With Amazon’s new “just walk out technology,” you can walk right out of the store without ever seeing your final balance. Your bill is settled through the credit card linked to your Amazon account with no swiping or physical receipts necessary. Because we do not feel the loss, people are more willing to spend for the items that they want. Amazon uses loss aversion to their advantage in other ways as well. By offering you a free trial of their monthly subscription for Amazon Prime, they’re giving you ownership of something that they know you will not want to give up once you have it.
Although the store is currently only open to Amazon employees, Amazon hopes to have the Seattle store open to the public in early 2017. According to a report from The Wall Street Journal, Amazon hopes to open more than 2,000 grocery and convenience stores across the US. Their goal is to control all aspects of product flow from their warehouse, directly to their customers without the need for a middle-man. As more customers turn to Amazon for everyday supplies, Amazon can lower their prices by ordering their inventory in bulk. Ultimately, the more people that see these amazing advancements in Amazon, the more people will sign up for Amazon Prime. It will be exciting to see how Amazon handles the inevitable problems of shop lifting, and how other companies will try to replicate these ideas in their businesses.
Authored by Alex Maglione, AmazonSellersLawyer.com
Amazon Sellers Lawyer is a legal team that is dedicated to defending sellers’ rights by applying legal strategies to protect their accounts and handle account suspensions, complaints and policy violations.