Amazon Go: Confessions of a Habitual User

Amazon Go is now up to six stores in three cities: their home market in Seattle, two in Chicago and the latest to open in downtown San Francisco. Two more are planned for Chicago, as well as another in San Francisco.  As a nomadic business traveler, I’ve had the chance to make multiple stops in four of these locations totaling 10 trips to date. Besides the data telling me that I buy way too many Diet Cokes and cookies, what have I learned to date?

• The app is remarkably easy to use. The QR code pops up immediately and shopping requires almost no explanation. Amazon employees are consistently present to help customers through the process. I have also been able to scan through 5-6 people at one time with no problem.
• It has been extremely accurate. While everyone plays around a little to try and hack the system (take two items at once, put items on and off a shelf, etc.), I have had no issues with order accuracy.
• It is truly a eerie sensation to “just walk out” with no checks at the door. But, you get used to it. I have done a trip in less than 1 minute now that I am out of the gawker phase.
• There is a surprising mix of products—sandwiches, salads, desserts, meal kits, localized assortments, etc. It is, in some ways, closer to a Pret A Manger than it is to a convenience store. The assortment is urban appropriate and seems to be evolving as Amazon experiments with new locations. The initial Seattle location has wine (which requires ID check) and the San Francisco store has a much larger assortment of grocery. I suspect Amazon is both tailoring by location as well as simply doing a lot of test and learn.
• Pricing seemed quite low initially in Seattle. San Francisco prices seem closer to market. Perhaps there is an evolution with regard to margin?
• While there is a lot of talk about being “cashierless”, it is hardly employee-less. There has always been at least 3-4 associates in the store at any given time.
• Revenue seems very strong—a reported $2700/ft by Bricks Meets Clicks which is impressive no matter what the store size is.

The big questions remain:

• There have been rumors floated about having 3,000 stores in the coming years. It seems highly unlikely—not because Amazon doesn’t have the capital but because it would take a tremendous real estate effort—and I have yet to see evidence of this. It is also A LOT of stores, particularly when they have a very urban focus. Those kinds of numbers will be difficult to reach.
• Can it scale to a bigger size? There are a tremendous amount of technology game changers if it moves to a Whole Foods or 365 Format.  Take a look at the ceilings and there are banks of cameras—scaling to a large format seems exponentially difficult. But, I suspect that larger versions continue to open, or perhaps a scaled down Whole Foods with a more manageable number of SKU’s. Or, will other formats appear, like Amazon Books or 4 Star?

I am a believer in Amazon Go as a potential retail game changer. The more I shop, the more I enjoy the frictionless experience.

By Neil Stern

Neil Stern for Forbes