Amazon Go’s Rapid Retreat
The Amazon Go concept, once touted as the future of retail, is experiencing a significant contraction. Introduced more than five years ago, the convenience store chain has seen the number of its stores dwindle, signaling difficulties in the brick-and-mortar market.
When Amazon Go debuted in 2018, the company envisioned a widespread rollout, planning to open as many as 3,000 stores. Initially, the concept seemed promising, with the first stores opening in Seattle and Chicago. The company even hoped to license its “Just Walk Out” technology to other vendors. At its peak in 2023, Amazon Go had 30 locations. However, as of late, about half of those stores have closed.
The Wall Street Journal reported that, despite freeing employees to assist customers, the electronic payment system proved problematic.
Consumer Psychology and Technology Issues
Several factors might contribute to the Amazon Go concept’s decline. The technology itself is facing scrutiny. Gabriela Serpa, a senior consumer behavior analyst at Canvas8, suggests that the absence of a traditional checkout process might be at play. “When you don’t have to tap or swipe or even click on a button to buy something, you don’t feel like you are actively making a purchase, and that type of behavioral disempowerment carries more weight than whatever (still faulty) convenient Amazon Go is offering,” she explained to The Food Institute.
Keith Carpentier, CEO and founder of Qbuster, has also weighed in on issues around technology adoption. He noted that “Adoption of new technology is not always welcomed by shoppers…Only Amazon app users could shop at these locations, which makes adoption harder and creates an exclusive experience.”
Amazon’s Challenges in Retail
Industry experts have also voiced concerns about Amazon’s understanding of the retail environment. Jeff Edison, CEO of Phillips Edison & Co., a real-estate investor, told the Journal, “I don’t think [Amazon] really understands retail.”
Axios highlighted the limitations of the “Just Walk Out” technology, which has highlighted the limits of AI. Furthermore, the company is redesigning its store in Mill Creek, Washington, incorporating more items, including made-to-order pizza.
Broader Trends in Cashierless Initiatives
Amazon’s struggles aren’t unique. Aldi is also experimenting with a similar cashierless concept, with its “Shop and Go” store in the U.K., facing criticism. PaymentsJournal reported that the store requires a £10 deposit from each customer, with slow refund processing times. Don Apgar, an executive at Javelin Strategy & Research, explains that shoppers make trade-offs for unattended checkout but also face potential issues.
“Running warehouses and shipping stuff efficiently is not the same as greeting a customer and saying, ‘May I help you?” Edison reflects on the different challenges.
“In a traditional store, if you’ve bought more than you can pay for, there is a cashier to help remove items from your bill and restock them. The idea is to minimize the probability of that happening,” Apgar observed.
