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January 21, 2018 | Amazon’s Fully-Automated Grocery Store (No-Checkout) Opens Monday

Mike 'Mish' Shedlock

Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.
The no-checkout process starts Monday. Here’s the concept: Go into a store. Pick up stuff. Walk out.

Nearly a year after it was promised, Amazon.com Inc.’s cashierless convenience store is slated to open to the public on Monday.

The new Amazon Go store, located in the base of Amazon’s main headquarters in Seattle, uses computer vision and machine-learning algorithms to track shoppers and charge them for what they select, thereby eliminating checkout counters.

Amazon announced the new Go store with fanfare in December 2016, and said it would open to the public in early 2017. The opening was delayed, however, as the technology proved more difficult to master than expected, with glitches occurring when too many people were in the store or were moving too quickly, The Wall Street Journal reported in March 2017.

Amazon Go’s technology uses cameras throughout the store to track shoppers once they are inside, though it doesn’t use facial recognition, Mr. Kumar said. A customer entering the store scans his or her phone and then becomes represented internally as a 3-D object to the system. Cameras also are pointed at the shelves to determine interactions with goods.

Concept Issues

How will this concept work with buy-by-the-pound items like fresh fruits and vegetables? How will it work with a superstore with hundreds of people coming and going? What about tracking people in bathrooms?

In the trial, little kids running around picking up items and putting them back in the wrong spot wreaked havoc with the system.

All-in-all, the concept seems more applicable to a 7-11 than a full-scale store.

Yet, I see lots of promise. Forget groceries for a second. Envision an electronic goods store like Best Buy. Load your basket up with stuff and an RFID chip reader sweeps your shopping cart all at once. Poof. Instantaneous checkout.

Yes, there is huge theft potential. For example, people could remove or change tags. But what if the chip is inside the box. Then it’s not so easy for theft. In contrast, putting a chip into a carrot that has to be weighed is not quite as easy.

Grocery stores may not be the logical starting point, but that is where Amazon, an innovation leader chose to start.

Over time, the issues will all be worked out. Grocery stores included.

Mike “Mish” Shedlock

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January 21st, 2018

Posted In: Mish Talk

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