The Industry

Why Amazon Is Opening More of Its Futuristic, Cashier-Free Convenience Stores

Shoppers scan the Amazon Go app on their mobile devices as they enter the Amazon Go store on Jan. 22 in Seattle.
Shoppers scan the Amazon Go app on their mobile devices as they enter the Amazon Go store on Jan. 22 in Seattle. Stephen Brashear/Getty Images

Amazon’s futuristic cashier-free store is expanding from its Seattle base. The claim to fame for Amazon Go, a hybrid grocery and convenience store stocked with prepared meal items and a variety of kitchen staples, is its lack of human staff: You check into the store with a code on the Amazon Go app on your phone, shop, and then are charged for the items you leave the store with, eliminating the sometimes time-consuming hassle of the checkout line. First announced as an employee-only beta in late 2016, Amazon opened its flagship Seattle location to the public in January. Now, the Seattle Times reports that the innovative retail experience will be heading to Chicago and San Francisco next. Amazon confirmed the expansion after publishing job postings for store managers in both cities, although exact store-opening dates are still under wraps.

With 481 Whole Foods markets under its fold, a rapidly evolving digital assistant, and a booming retail fashion segment, we’d almost forgotten about Amazon’s play to make cashiers a thing of the past. Its June acquisition of Whole Foods is still its main brick-and-mortar avenue for groceries. Under Amazon, Whole Foods posted its biggest sales-growth numbers in two years, and Amazon’s quarterly profits more than doubled in its first earnings report of 2018 thanks in part to Whole Foods. To that end, Amazon was able to leverage its Whole Foods acquisition with profit-boosting tactics such as Prime member–only discounts and cash back on Whole Foods purchases for Amazon Prime credit card holders.

Amazon Go still plays an important role in the company’s multifaceted retail ecosystem by addressing a different kind of grocery purchase. Whole Foods follows a tried-and-true grocery-store model. You can go in and shop—or, in a growing number of areas, you can order grocery delivery instead. Amazon Go is something else: a physical, consumer-facing application of some of the company’s more experimental developments. Artificial intelligence and machine learning are key to the Amazon Go experience. The stores are embedded with cameras and sensors to track customers’ purchases, ensuring you’re charged for exactly what you walk out of the store with. Humans are still employed in the store for tasks such as making sandwiches or checking IDs on alcohol purchases—there are just no checkout counters or clerks. It’s a model pioneered behind the scenes in Amazon’s warehouses, where humans, machines, and automation work together in efficient (if grueling and cutthroat) harmony.

The Amazon Go model could eventually roll out more broadly to Amazon’s other physical retail locations, such as Whole Foods and its bookstores. But, especially for the near future, it’s a model more suited to the smaller grab-and-go style shop. The two store styles for now are quite complementary, targeting different types of shoppers with different needs. The locations Amazon has picked for its two upcoming Go stores hint at this. In Chicago, Amazon Go will open up in the city’s Loop district across from the Thompson Center, a building that houses a handful of government and political organizations. In San Francisco, the store is reportedly heading to Union Square, a centrally located shopping and tourist destination. (While the exact location is still unknown, an official announcement should arrive in the coming weeks, the San Francisco Chronicle reports.) Both store locations are centered in busy, retail-heavy spots—places where you might stop in to grab something quickly for lunch or swing by to grab something before commuting home, but not a place you’d necessarily drive to specifically.

In San Francisco, it’s also curiously not situated in a tech- and startup-filled area like the SOMA district. This likely isn’t a coincidence. Amazon Go isn’t a store exclusively for early adopters; it’s a store for real people who are busy and need the quickest grocery-shopping experience possible. And based on the reported locations, we can expect to see additional Amazon Go stores pop up in shopping hubs in other metropolitan areas—Los Angeles is another rumored locale among a total of six new stores this year.

Amazon Go has its a unique place in the Amazon retail ecosystem. It kneads cutting-edge technology into a traditional corner store–type business for service that’s faster than shopping online but more convenient than going to a true grocery store. It’s both a testing ground for techniques that could be rolled out more broadly in its Whole Foods stores and a stand-alone retail experience. While it may not play a big role in boosting Amazon’s earnings in the near term, these Amazon Go stores could further our reliance on the brand—and positively position the company against competing retailers.