Amazon's Cashierless Convenience Store Is Coming to More Cities. What Makes It Different?

Going cashierless isn't mainly about cutting costs.

At 7:30 on the third night of their honeymoon, Logan and his new wife, Marissa, stood outside a convenience store in downtown Seattle, waiting for an app to finish downloading on their phones.

Seattle was the first stop on the Oregon couple's trip. After Pike Place Market, the Space Needle and the first Starbucks store, they arrived at the stop they had looked forward to most: Amazon Go, the cashierless convenience store Amazon runs on the ground floor of its own headquarters.

"When we decided to take this honeymoon, we decided we had to come here," Logan said. He likes technology, he told us, and has worked at Microsoft among other companies; Seattle came first on the itinerary precisely so they could see Amazon's newly opened cashierless store.

Amazon Go sits at the corner of 7th Avenue and Blanchard Street downtown, about a 15-minute walk from both the Space Needle and Pike Place Market. It opens Monday through Friday, 7 am to 9 pm. Before it opened to the public on January 22 this year, the store had spent a year in internal testing with Amazon employees only.

Within the surrounding blocks, the nearest fresh-food supermarket is a five-minute walk away: Whole Foods, which now belongs to Amazon too, with "WholeFoods + amazon" signs posted all over it.

Unlike Amazon's other physical stores, Amazon Go requires you to download an app of the same name before you can get in. Most first-timers end up waiting at the door for the download to finish.

Download the Amazon Go app, sign in with an Amazon account, open the QR code on the app's home screen and scan it at the turnstile by the door, and you can walk in.

Logan scanned his phone twice at the entrance — once to send Marissa through the turnstile, then again to walk in himself. For the rest of the trip he never had to take his phone out again.

Once someone scans the Amazon Go code and walks in, everything they buy afterward is tied to that account. You can also scan a friend through, and the system will bill whatever they pick up to the same account.

The store runs on house-made food. Buying something means grabbing it and walking out — and nothing on the shelves carries an extra tag

The shelf facing you once you're through the turnstile holds Amazon Go's core category: house-made food. At the lunch and dinner rushes, plenty of customers scan in, head straight for it, pick up a few things and turn around and leave.

We have visited the cashierless stores opened by JD.com, Tmall and Alipay. Whether the range of goods was wide or narrow, every item carried an RFID tag (the same principle as a transit card or a door badge). Cashierless-convenience-store startups like BingoBox and Xiaomaipu work the same way: the in-store checkout system figures out what a customer has bought by scanning RFID tags.

In essence, the customer does the cashier's job. At JD.com's cashierless supermarket, customers walk out through a dedicated checkout lane and don't need to take out a phone either, but the system still identifies what they've bought by tracking RFID tags, and payment is deducted through facial recognition.

At Amazon Go, not one item carries an extra tag. The goods look no different from what sits on an ordinary supermarket shelf.

Amazon Go runs on an entirely different technology.

From the moment you scan in at the door, the system ties you to your account. Using facial recognition and other computer-vision techniques, it adds an item to a virtual cart when a customer lifts it off the shelf, and pulls it back out when the customer puts it down. Cameras and sensors around the store track goods and customers at the same time, and can tell what a customer has finally "bought." The instant the customer steps out through the turnstile, the tracking stops and the bill settles itself.

Apart from how you get in and out, browsing here feels much like browsing the organic supermarket Whole Foods a few blocks away. (Since Amazon now owns Whole Foods outright, you can even find Whole Foods' own-brand products on Amazon Go's shelves.)

The other big difference from an ordinary convenience store: there, you carry your picks to the register, and only after paying do you get a paper bag or a shopping bag. At Amazon Go, three spots in the store let you take a bag yourself — you drop whatever you want straight into it, and when you're done you just carry it out.

Which means you can spot an Amazon Go customer from a few blocks away: the orange bag in their hand is hard to miss.

By the exit, Amazon Go has also put in a dining area with seats for six: a microwave for heating food, a bar counter and stools, disposable cutlery, napkins and other table supplies. A small door out of the dining area opens onto the lobby of Amazon's Day 1 building.

Amazon says that the moment a customer takes an item off the shelf, it joins a virtual cart; put it back and it disappears from the cart again.

One reporter tried covering an item with a shopping bag while it was still on the shelf, then carrying it out that way. Amazon caught the order anyway and charged his account.

Once you've picked out what you need, you simply walk out through the turnstile. Within a few minutes of leaving, a digital receipt arrives on your phone, and the charge goes through a few minutes after that. The receipt lists not only what you bought but exactly how long you spent in the store.

Watching people on the spot, we noticed they instinctively pause at the exit turnstile, waiting for a gate to open before walking through — even though the system doesn't need that second or two of reaction time.

Returns are just as easy, handled from the digital receipt in the app. You don't have to bring the item back to the store or upload a photo to prove anything: pick a reason and you get your money back.

The app says refunds go back to the original payment method within three to five business days; when we tried it, the money landed within 48 hours.

Traditional supermarkets and convenience stores line the register and the queue with things you grab on your way past: gum, chocolate, tissues, small bags of snacks. At Amazon Go there is no such zone.

If you want to walk the store, the shelf facing the door holds salads, sandwiches and other prepared meals; turn right for nuts and snacks, then kitchen and pantry goods, with frozen food in the cold case. If you want to take something home to cook for dinner, Amazon's own meal kits (Amazon Meal Kit) sit on the right-hand shelves too.

Turn around at the wine and beer section and the cooler on your right holds ham, bacon and other deli meats along with dairy drinks; keep going, past the bread, and you're back at the prepared-food area, where you can head straight out the door or loop over to the drinks section on its left for an energy drink. Walking from the drinks back to the exit turnstile, you pass one shelf of small chocolate bars — probably the closest thing in the store to the impulse shelf beside a traditional convenience store's queue.

We filmed the whole shopping trip; you can click through and watch it.

It's called "cashierless," but a dozen-plus people work here every day

Amazon Go may be a cashierless store, but before you even walk in, the first thing you see is at least ten employees at work behind the window.

Amazon puts its back kitchen on full display along the street front. These employees start around six in the morning, turning ingredients and part-prepared food into salads, roast chicken, pasta, sandwiches and other ready-to-eat items that go out onto the shelves. Only after 7:30 pm does the street-facing kitchen empty out — that's when the store stops making new food for the day. Once the kitchen is cleaned up, they're off shift.

Besides the dishes its own cooks make, Amazon Go sells yogurt, drinks, bread, kitchen and pantry goods and nuts and snacks, plus a corner shelf area for wine, beer and other alcohol.

For people who want dinner solved quickly, the meal kits Amazon launched last year (Amazon Meal Kit) have shown up on Amazon Go's shelves too.

Beyond doing away with the cashier's job, Amazon Go is in fact a store with quite a few employees. A staff member named Hutch told us that in the section selling beer and other alcohol, someone is always checking IDs: under U.S. law, only customers 21 and over may enter it.

There is at least one employee at the entrance, to handle whatever questions people have on the way in. At peak hours that grows to three or even four.

Others patrol and restock the shelves, and at least ten more work in the back kitchen, making food or prepping half-finished ingredients.

It somewhat resembles how Amazon arranges its warehouses: Amazon has pushed robots through its warehouses to do the dull, repetitive work and free human employees for work that takes thinking.

Hutch told us that whenever stock of an item on the shelf falls below 75%, the system automatically issues an order to the back room telling an employee to restock; the employee follows the prompts and fills the shelf. That way shelves rarely look bare even at peak hours. (The morning food shelves are the exception: the dishes for lunch get made and put out gradually, right up to the lunch rush.)

Unlike Amazon's physical bookstores, which push Prime membership at every turn, Amazon Go only asks you to link an Amazon account; you don't have to be a Prime member. But you do have to download the Amazon Go app, separate from Amazon's own. You only scan your phone once, on the way in, but you can look up every product and price in the Amazon Go app whenever you like.

Even the staff can't say how many cameras are in the store

What sets Amazon Go apart is the array of sensors and cameras installed throughout it.

Hutch has worked in operations on the Amazon Go project for two years. Part of his job is patrolling and restocking, part is guiding customers at the entrance. A month after the official opening, he has a rough feel for the store's traffic: he now takes lunch around 10:30, because from then until closing at night the store stays very busy.

But he can't say how many kinds of sensors and cameras are in here. "I don't know how many there are, honestly. All I can say is, look at these — they all do different things, and there are more on the shelves." He pointed at the ceiling, showing me sensors in all sorts of shapes.

Amazon says the store tracks foot traffic and shelf stock with cameras and sensors, combining deep learning, artificial intelligence and computer vision to analyze traffic and follow purchases, so checkout finishes without the customer noticing it.

Getting to that experience took Amazon Go through repeated setbacks. The original plan was to open to the public in early 2017, but from the start of testing, whenever more than 20 people were in the store at once, or customers pulled items off a particular shelf too fast, the in-store tracking equipment struggled to keep up with customers and goods. So the opening slipped a full year.

Ever since Amazon released its concept video of the store, though, the idea of the cashierless convenience store and the cashierless supermarket has caught fire. Self-checkout, face-scan entry, face-scan payment — these have been combined into all sorts of formats.

Judging by the cashierless projects we've seen from JD.com, Tmall, Alipay and various startups, Amazon Go currently offers the smoothest experience as a store.

Business is good so far, and Amazon's own employees have a lot to do with it

Logan and Marissa are hardly the only ones treating Amazon Go as a travel destination. In its first month open to the public, this store of just 1,800 square feet (about 162 square meters) has drawn plenty of people who came for it specifically. Because it can only hold so many customers at once, people had to queue to get in during the first few weeks.

As TechSmart, a video creator who flew two hours from San Francisco to stand in that line, put it: "This is a store whose selling point is that you don't have to queue to check out, and yet people have to queue to get into it."

Hutch stopped being surprised long ago by the people filming and livestreaming in the store with phones, cameras and camcorders. "People livestream on social networks, take a lot of photos, tweet — it's very common," he said.

The most common customers, though, are Amazon's own employees. They come in with their badges on to grab a meal. One thing working in the store's favor: Amazon has a company cafeteria, but unlike Google, Facebook and other Silicon Valley internet companies, it doesn't feed employees for free.

At the busiest lunch hour, the door of the Day 1 building gets crowded too: delivery vans from restaurants park out front with their tailgates up, waiting for people to collect orders, and employees carrying Uber Eats bags keep walking back into the building.

"There's quite a lot of choice here," one Amazon employee, who asked not to be named, told us. Before, she said, she ate lunch either at the company cafeteria upstairs or walked a few blocks into downtown to find a restaurant.

By dinnertime, families start coming. Riho Gravning has worked in Seattle for ten years and now works for a Japan-U.S. study-abroad agency; on a friend's recommendation, she and her husband brought their one-year-old to see the store. In the dining area she shared a tub of ice cream with her family.

They live nearby, over by the Space Needle, but Riho is about to move the family out to the suburbs so the child has more room to move around. Over the past four or five years the neighborhood has grown busy as Amazon's new headquarters went up and filled with people, and rents have risen with it.

"Seattle has changed enormously in ten years — this whole area used to be warehouses," she told us. "Amazon Go has brought in a lot of curious people too. I just saw a whole group of Japanese people in the store. There usually aren't many Japanese people around here."

The "group of Japanese people" Riho meant was a party from Tokyo led by a man named Hirokawa. He had brought more than a dozen colleagues and reached the door at 6:30 in the morning so they could go in the minute it opened at seven. He runs a retail-systems supplier in Japan, and the technology his company is developing resembles the "Just Walk Out" system Amazon Go shows off. "But there's a difference in degree — sometimes we still need a person to make the call," he said.

Hirokawa and his colleagues spent the whole day inside the cashierless store. Several of them planned to come back the next day and keep studying it.

After the store closed at nine that night, Hirokawa took his colleagues to the nearby Whole Foods as well. What Amazon has changed at that supermarket since buying it is another thing these retail people are curious about.

The store is offline because that's where the foot traffic is, but going cashierless is about experience more than cost

Like everything else Amazon builds, Amazon Go is one complete system.

According to Recode, Amazon plans to open six more Amazon Go stores this year, and Los Angeles may be the first city after Seattle to get one. The project, five years in the planning, seems finally to have finished its first phase of testing and to be readying the model for a wider push.

Both the Los Angeles and the Seattle sites sit in office-tower clusters or shopping centers — much the same thinking as when Amazon opened its physical bookstores: shopping districts the middle class visits often.

Unlike China's fiercely contested e-commerce market, online retail in the United States is all but an Amazon monopoly. But the limits of shopping online are becoming clearer. A sizable share of people simply like walking around a store and buying things.

In the U.S. book market, the share held by Amazon, the biggest e-commerce player, has stopped growing over the past few years. That's part of why Amazon started opening physical bookstores.

Fresh food and groceries — the business dominated by convenience stores and small and midsize supermarkets — are harder still to solve online. A survey by the consumer-products research firm TABS Analytics found that only 4.5% of customers buy groceries online frequently, barely up from 4.2% four years earlier.

And that's after a decade of Amazon working on fresh food.

In 2007, the online grocery service Amazon Fresh launched in Seattle; several years later it had spread only to Philadelphia, New York and California. In 2014 Amazon launched Prime Now, one-hour delivery built mainly around fresh groceries. By 2016 the service had added restaurant food.

To get people ordering on their phones, Amazon tried everything: mobile carts on the street, renting the postal service's vehicle fleet, building small logistics nodes around cities. None of it changed how people shop.

The same thing has happened in China, where Tmall and JD.com have already spent without regard for cost on supermarkets and fresh groceries.

In the end, the internet giants on both sides made the same choice: open physical stores, get customers in dense neighborhoods, and dodge the steep logistics cost of half-hour delivery.

If opening stores is about a lower cost per customer through the door, then going cashierless is probably about more than cutting a few low-wage cashiers.

The well-known independent analyst Ben Thompson has noted that staff wages can account for 13.5% of a U.S. convenience store's total costs.

That was the scale of effect people guessed cashierless technology would have when Amazon Go was announced.

But for a store in the middle of a big-city downtown, the labor that cutting-edge technology saves isn't a large number next to the rent on the storefront. And Amazon Go leans far more toward prepared food than an ordinary convenience store does — and the kitchen still can't run without people.

Set against that, what it does for the shopping experience is much more obvious.

Apple Pay, and scanning with Alipay or WeChat, all still leave a fairly long sequence in place: customer picks up the item, clerk rings it up, payment goes through, item goes into a bag. What these technologies do is make paying a little faster and let you leave cash at home. The shopping experience itself doesn't change much.

Amazon Go removes that whole sequence — the clerk counting items, the payment, the shift from basket to bag. You pick something up and walk out the door.

The gap between the two is like the gap between Uber or Didi and a taxi. Get used to riding Uber or Didi every day, with the fare coming off automatically once you're out of the car, and you may occasionally take a regular taxi and reach for the door without paying.

What's clear is that this kind of payment technology won't stay inside Amazon Go's current convenience stores.

On June 16 last year, Amazon announced it was buying Whole Foods for $13.7 billion.

Today Amazon's logo is everywhere inside Whole Foods, and the chain is gradually becoming a pickup point for Amazon orders and a warehouse hub for its fresh-grocery delivery service.

Whole Foods products already appear on Amazon's website. And food from Whole Foods is everywhere on Amazon Go's shelves.

So far, Amazon's offline expansion hasn't moved fast. The slow pace of opening and testing shows how careful Amazon is being with its brick-and-mortar business. But once it gets going, it probably won't stop.

Cover image and photos in the article taken by the author.