Amazon Go’s impact on customers and employability of different individuals

Amazon Go’s impact on customers and employability of different individuals

Hiral Rayani

Abstract: Amazon has laid the foundation of “Amazon Go” retail stores, boasting a no-check
experience in grocery shopping. Amazon has tried to offer ultimate convenience to its shoppers-
they only have to scan their Go application barcode upon entry, with purchases automatically
charged to their amazon account when they leave the Go store freeing them from the long check-
out queues. However, this entire Go store idea is like a double-edged sword. It is a daunting bid
for cashiers, who have been now replaced by an application on our smartphone. In this research I
will be delving into the effects of the Go store on the community at large. The research will focus
on the current employment landscape and how it may be impacted by this new technology as well
as any sociocultural implications that may exist. Cashiers being one of the most integral part of
the American workforce have fallen prey to Amazon’s technological innovation. The research
recommends that with all of this fear that Amazon Go’s new cashier-less technology will eliminate
cashier jobs in retail stores, there could also be an increased demand for technical people to design,
implement, and maintain this new technology. Supervisors and customer service personnel would
be needed to answer customer queries, handle returns, and handle product quality issues. The Go
store will also result in an increase in demand for security and anti- theft employees to prevent
shop-lifters. It appears that people will still be needed in retail, perhaps just in different capacities.

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Amazon Go’s impact on customers and employability of different individuals

Introduction

In today’s fast paced world, people are indifferent towards innovations until it directly

affects them personally, similarly; a business is unprofitable if customers don’t find its product or

service beneficial. Amazon has taken advantage of this dilemma and laid the foundation of

“Amazon Go” retail stores, which launched in beta on December 2016, and to public on January

2018, boasting a no-check experience in grocery shopping. The Go store concept automates

majority of the purchase, checkout, and payment steps associated with a retail transaction by

exempting the customers from long checkout queues. For Amazon Go to accomplish this

paradigmatic shift in the operational model of retail shopping, it relies heavily on technological

innovation. The technology Amazon Go uses automatically senses when an item is picked up, put

back on the shelf, and tracks who committed the action. Once the customer is satisfied with the

items they have chosen, they simply walk out the door - no lines, no checkouts, and no waiting.

The purchased items are charged to the customer’s Amazon account and a receipt is sent to the

Amazon Go app (Amazon Go Editorial Staff, 2017). This simple checkout experience on the part

of user is in fact a combination of several enhanced technologies including computer vision, deep

learning algorithms and sensor fusion. The research paper focuses on how Amazon Go’s “JUST

WALK OUT” technology will impact shoppers and the employability of different categories of

individuals. This research is interesting since Go store has brought paramount change in the

shopping experience and it is not the first time that a company has come up with such an idea, but

Amazon has actually materialized it. The paper will also highlight the implications, applications

and sustainability of the Amazon Go Concept, with major focus on the employment landscape and

sociocultural implications. This research will also throw light on the fact that although “Just Walk

Out Technology” will eliminate the jobs in retail stores, it will open up several opportunities for

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Amazon Go’s impact on customers and employability of different individuals

individuals with computer maintenance skills, and individuals to help in the validation of

purchases prior to leaving the store.

Existing Literature

Due to popularity of Amazon Go many researchers have demonstrated their interest in

analyzing the implications, applications and sustainability of the new technology as well its impact

on the society. Although, the research in this area is not extensive, gradually many perspectives of

this socio-technical system are being introduced.

Polacco, A. & Backes, K. (2018) outline the potential implications of the Amazon Go store

concept on the workforce along with its sociocultural impact on the retail operational models and

the technologies used. The research also discusses the survey responses of the managers of six

major retail and grocery stores on adoption of the technology and its pros and cons. Furthermore,

this paper provides key facts about the social and technological sustainability of Amazon Go in

the industry.

Zysman, J., & Kenney, M. (2018) discuss the impact of automation and technological

advancements on workforce and how information produces economic activity. The article draws

attention on the ability of artificial intelligence tools to simultaneously replace, transform and

create work for the community. It also highlights the role of artificial intelligence in augmenting

human skills and the need to redesign work to leverage human cognition and creativity. This

research strengthens the argument as to how Amazon Go’s artificial intelligence technology will

replace the human cashier requirement, at the same time open opportunities in the technical

domain.

Technological advancements have negatively impacted life of the working force. Abi

Adams (2018) research article assesses evidence on the impact of technology on the aggregate

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Amazon Go’s impact on customers and employability of different individuals

number of jobs, and emphasis on how ‘Digital Revolution’ will affect the quality and composition

of jobs. It is evident from the history that workers have suffered both economically and socially

when technology has revamped the traditional working systems. Technological growth has had

life changing impacts which eventually lead to unemployment and low paying wages. This article

supports my research argument and draws out a detailed correlation between technological

advances and unemployment.

Rossman, J., & Euchner, J. (2018) discuss in depth about different strategies, leadership

traits and principles underlying Amazons success. Rossman highlights how Amazon tries to be

operationally excellent by having a “customer obsession” which drives the company to address

unmet customer needs and expand their customer base. Furthermore, the interview talks about

Amazon being disruptively innovative by doing things which are very different from most of the

other American companies. This interview builds a good understanding of the principles and

underlying thought leadership of Amazon behind its innovations. Moreover, it establishes a base

for my argument to analyze how amazon prioritizes its customer needs and excels in creating novel

innovations.

Retailers have continuously tried to differentiate themselves from their competitors

through shopping experience. Silvia Cachero-Martínez & Rodolfo Vázquez-Casielles (2017)

analyze relationships between experience dimensions, shopping experience value and satisfaction.

This research concludes that if a retailer can stimulate ultimate social shopping experience and

consumer interest, they are bound to have a greater consumer base. This research is consistent with

the fact that consumers desire positive experiences in a retail store. It focuses on the importance

of developing innovations related to experiences that generate emotions and hedonic value. The

researchers suggest the retailers to invest in activities that help to stimulate consumer curiosity and

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Amazon Go’s impact on customers and employability of different individuals

imagination in store, causing positive emotions that favorably influence customer satisfaction and

hedonic value. This very much relates to the disruptively innovative Amazon Go store Concept

whose sole purpose is enhanced customer satisfaction and preeminent shopping experience.

Bessen, J. (2015) research article draws on his forthcoming book, Learning by Doing: The

Real Connection between Innovation, Wages, and Wealth. The article focuses on how innovative

technology displaces workers to new jobs rather than replacing them entirely. The study throws

light on how artificial intelligence & new technologies have taken over tasks not only from

warehouse workers, but also from white-collar workers and professionals. Bessen also emphasizes

on how new technologies can result in an increase in demand for workers with new skills. This

article strongly supports the argument of my research question of how Amazon Go will eliminate

the jobs in retail stores but also open up several opportunities for individuals with computer

maintenance skills, security professionals and technology savvy individuals. From this article it

can also be inferred that the Go store concept will not replace the cashiers entirely but will free

them to perform other job tasks.

It is very important to understand the interplay between the human and machine capabilities

to examine the implications of machine innovations on the human labor market. Autor, D. (2014)

offers a conceptual and practical overview highlighting machine displacement of human labor and

the simultaneous growth of high-education, high-wage and low-education, low-wages jobs. The

research focuses on the interplay between machine and human comparison, which allows machines

to substitute for human workers in performing routine tasks. The study also portrays the distinctive

advantage of working force in providing analytical and problem-solving skills as well as

flexibility, adaptability and novelty. This study supports the reasoning of my research argument.

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Amazon Go’s impact on customers and employability of different individuals

Rosenblat, A. and Kneese, T. and Boyd, D. (2014) highlight the disruptions intelligent

systems have on the workforce. Researchers conclude that the potential disruptions caused by

Intelligent systems are not simply a matter of technical mechanisms and social resistance. They

suggest the importance of the right socio-technical infrastructure within which these intelligent

systems can fit within society. This study also highlights the principles needed to help bridge

disconnects between technology advancement and public concerns.

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Amazon Go’s impact on customers and employability of different individuals

Description and Analysis

Amazon Go is a department of online retailer Amazon which comprises a chain of grocery

stores currently in Seattle, Washington, two in Chicago, Illinois and one in San Francisco,

California. The first store was introduced to employees on December 5, 2016, and to the public on

January 22, 2018. Go stores are equipped with advanced technologies and an infrastructure that

offers ultimate shopping experience for customers. Amazon’s primary objective has always been

enhancing customer experience and revamp traditional shopping behavior. Amazon did not reveal

much about the technologies and its implementation behind its innovation, but it seems that

Amazon is using cameras as critical operational strategy. The purpose of these cameras is to track

not only the products and their placement, but also the individuals who are purchasing the products.

From the patents that the online retailer has filed, the system records when a customer comes in

the store, knows what product is picked up by that customer and automatically charges the

customer once he leaves from the transition area of the store. The inventory system is also said to

use the shoppers past purchase history to identify the product once it’s picked up. The amazon

system also uses data from other input systems that include and might not be limited to cameras,

pressure sensors, load cell and scale.

Competitive landscape

The first company to introduce the concept of cashierless shopping was Standard Cognition

which is similar to the concept of Amazon Go (Lacy, 2018). Its Standard Store was a proof-of-

concept which allowed users to pick a wide range of consumer goods and checkout without any

hassle’s, eventually mailing consumers with an itemized receipt. The concept of cashierless

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Amazon Go’s impact on customers and employability of different individuals

checkouts is gaining popularity not only in the United States but also globally. Shufersal Ltd. is an

Israel’s largest supermarket chain which is planning to introduce this novel concept in 272

locations. Shufersal Ltd. is entering into a joint venture with Trigo vision to launch a new shopping

experience for its customers. Trigo Vision revealed the technology that will be used in this new

market proposition. Quite similar to other players in the industry, Trigo Vision utilizes the

functionality of ceiling-based camera network with machine-vision algorithms to eliminate

checkout process. (Benmeleh,2018). With Amazon Go’s development and investments in such

new concepts, a major global competitor is also experimenting with these enhanced features.

Alibaba Group Holdings Ltd. Has been investing a lot in cutting-edge technology in China and

trying to enhance customer experience. Also, many multinational companies in Japan have been

looking forward to adapting such technologies and emerge in the global markets. With time being

an utmost important resource in everyone’s lives, these companies have hit the nail hard in

identifying evolving customer needs. Soon there will be stores throughout the world which will be

migrating to cashierless checkout process thereby eliminating waiting times and huge checkout

lines in stores. But having said that, it will be a challenge for these companies to constantly

improve on technological aspects and maintain customer loyalty.

Shopping Perception

In order to shop at the Amazon Go store, the shopper must first create an Amazon account,

have a smartphone with the Amazon Go app downloaded. The only constraint required for

shopping at Amazon Go is an active internet connection. Users with a stable and active internet

connection can take advantage of this innovative technology. Upon entering the Go store, the

shopper scans their Amazon Go app, located on their smartphone. This is done through scanning

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Amazon Go’s impact on customers and employability of different individuals

the QR code on the smartphone application which saves the costumer data. Once the shopper is in

the store, the shopper is free to add and replace items to or from their virtual cart. Amazon Go

automatically senses when a product is picked from a shelf or put back on it and who committed

this action. The action of picking an item by a consumer is detected through a combination of deep

learning algorithms, sensor fusion and computer vision. Once the shopper is satisfied with the

items they have chosen, they simply walk out the door without any checkout lines and waiting.

The purchased items are automatically charged to the shopper’s Amazon account and a receipt is

sent to the Amazon Go app.

Download Scan App QR Amazon Go

Figure 1: Amazon Go Shopping process

Approximately 75% of 1000 consumers when interviewed during a survey, mentioned that

they were most likely to shop from Amazon Go. These responses were solely based on the

innovative concept of Amazon Go and its ease of use which was optimistically seen by the

customers. Almost 84% of these consumers indicated that they would enjoy Amazon Go’s

shopping experience. Amazon Go’s new concept was clinical in achieving a strategic or

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Amazon Go’s impact on customers and employability of different individuals

competitive edge over traditional and conventional grocery shopping techniques. The underlying

issue for every customer is the waiting time in shopping lines which cost them time. Potential

customers nowadays look forward to cutting down waiting times first and then think about cost

savings. This survey also mentioned that 25% of these people would pay more for their groceries

if they could avoid these lines at the register (Redman, 2018).

Impact on Workforce

Reliance on machines has altered the conception of the entire society on employment.

Amazon go has revolutionized the retail industry by elevating the customer experience and

improving its strategical operations. This concept has enhanced the entire shopping experience by

freeing the customers from the hassle of standing in long queues. This automation has resulted as

a daunting bid for the Cashiers of the retail stores, who are now replaced by the Amazon Go

Application. New technologies are using artificial intelligence and computer vision and overtaking

tasks not only from store workers, but also from executive workers and professionals. In United

States, the largest private sector of employment is Retail, which is said to have a total employment

of over 15 million people, according to the National Retail Federation. In United States, 2.7 million

people are employed by retail grocery stores, 856,850 of these are employed as cashiers (Bureau

of Labor Statistics, 2017). Amazon’s disruptive technology seems to make cashier jobs obsolete.

However, this technological innovation is going to require decent amount of human intervention.

Innovative technology is said to displace workers to new jobs rather than replace them completely.

In one case, the new machines replace workers overall in the other, they just displace workers to

different jobs that require new skills (Bessen, 2015).

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Amazon Go’s impact on customers and employability of different individuals

Amazon has argued that Amazon Go is merely changing the role of employees and not

their existence. Amazon declared that they will still need people to make fresh food, stock shelves,

check customer id’s for liquor sales, answer customer queries and facilitate a customer return

request and customer service. It may occur that certain customers may change their decision after

choosing several items and may decide of not purchasing them by placing it in random shelves

instead of the shelf where the item belongs. Sometimes if a refrigerated product is left on a non-

refrigerated shelf then it may end up being spoilt if an employee doesn’t reshelf it on time. This

indicates that the store requires continuous monitoring by employees to make sure everything is

stocked and shelved properly just like any other retail store.

All employees are qualified to add value to the organization as well as enhance the

shopping experience by serving as customer service specialists forgoing the cashier duties.

Customer service being the key element that drives value and long-term customer loyalty for

Amazon, the primary duties of cashiers seems to be shifted to a new sector of retail industry –

customer service. It seems that the employability of such individuals won’t be affected since

Amazon Go is just changing the job duties of employees for the sake of ultimate shopping

experience and optimized retail operations.

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Amazon Go’s impact on customers and employability of different individuals

Discussion

Technological advancements will result in an intense effect on labor markets. Even if new

technologies do not necessarily destroy jobs, they will radically affect the quality and composition

of jobs (Adams, 2018). Amazon has revolutionized the retail industry by its disruptive innovation

of the cashier-less store concept. This innovation might directly impact the employability of

different individuals. As discussed by Adams. A (2018), the impact of a particular technology on

employment and wages depends both on whether a technology substitutes or complements for

labor and also on equilibrium impacts that manifest themselves through changes in labor supply

and product demand. For instance, the cashiers might lose their jobs whereas the technologically

versed people might be exposed to new opportunities with Amazon. David Autor (2015) has

rightly quipped- “Tasks that cannot be substituted by automation are generally complemented by

it”. Amazon has stated that the primary responsibilities of the employees in the retail sector will

be shifted from cashiering to customer-service. Since a lot of store tasks like shelving items,

restocking items, answering customer queries, handling return requests still require human

intervention, it seems that automation of cashiering procedures will result in an increased

efficiency of human efforts in different sectors. Let’s consider the invention of automatic teller

machines (ATMs) in retail banks- ATMs eliminated the conventional task of cash deposits and

withdraws. This innovation failed to replace the bank teller’s existence from retail banks rather

allowed them to perform several roles and responsibilities in banks thereby increasing the

productivity of different bank sectors. The roll out of ATMs in the 1970s actually coincided with

a rise in the number of human bank tellers employed in retail banks (Bessen, 2015). Advanced

technologies like sensor fusion, deep learning, computer vision might eliminate jobs in many

cases, many a times they tend to create demand for new capabilities and new jobs. Amazon’s

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Amazon Go’s impact on customers and employability of different individuals

advanced innovation requires maintenance and needs to be up to date, this requirement can be

satiated by executive professionals who are very well-versed with the advanced technologies.

Therefore, instead of cutting on jobs, its foreseen that Amazon may open up new opportunities for

a lot of white-collar professionals.

Conclusion

A primary takeaway from the discussion above is that the disruptive technology presented by

Amazon will revamp the future of retail stores. Amazon’s strategy is an evolution of the self-

checkout system that are being used by several grocery stores. Much has been discussed about

machines vs humans, but at the end what matters is the right blend of the socio-technical

infrastructure of these automated systems that is accepted by the society. Amazon has also proved

that Automation doesn’t equal to Unemployment. The go store concept has rather shifted the

primary responsibilities of employees employed as cashiers towards customer engagement and

satisfaction. This automation has also opened up new opportunities for professionals who are very

well versed with developing and maintaining advanced technologies. Amazon Go has set a

benchmark for other retailers by offering one of a kind shopping experience.

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Amazon Go’s impact on customers and employability of different individuals

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Amazon Go’s impact on customers and employability of different individuals

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