retail news in context, analysis with attitude

by Kevin Coupe

Following up on this week's announcement by Amazon that early next year it will open a new 1,800 square foot convenience store called Amazon Go - allowing consumers to enter the store using a mobile application, choose the items they want, and then leave without having to go through a checkout lane - the New York Post argued that it has the potential to be an enormous job killer.

The Amazon Go store "threatens countless jobs at grocery stores, which are the leading employers of cashiers and had 856,850 on their payrolls in May 2015, according to the latest figures from the federal Bureau of Labor Statistics," the Post wrote.

Britt Beamer, president of research/consulting firm America’s Research Group, told the Post that he estimates that "Amazon’s cutting-edge technology had the potential to wipe out 75 percent of typical grocery-store staff. 'It’ll be a big job-killer,' Beamer said. 'It’ll eliminate the cashier, it’ll get rid of the baggers, it’ll eliminate the stock clerks. This could be big'."

The Post wrote that this is part of a broader effort by Amazon to get away from the use of actual people: "The opening of Amazon Go follows the company’s increasing use of warehouse robots and its heavily hyped scheme to deliver online purchases via a fleet of Prime Air drones, which Amazon predicts will one day “be as normal as seeing mail trucks on the road.

"It also comes amid growing concern over the impact of self-driving vehicle technology on the nation’s 3.5 million truckers, cabbies and other professional motorists."

Meanwhile, Forbes had a piece about how Albertsons is continuing to remove self-checkout lanes from its stores, following a path it started to go down several years ago. The story says that "Albertsons has said, since it first began eliminating self-checkout lanes in 2011, that it wanted to encourage more human contact with its employees."

And "Albertsons is not alone. CVS Health, IKEA and Big Y Foods have also removed self-checkout terminals due to customer service and other concerns, reports CardFellow.com. According to a survey by NCR Corp., which supplies many of these terminals, 43% of consumers who used self-checkout lanes still wanted an attendant to be available to help resolve issues.

"And for good reason. While roughly 75% of surveyed shoppers deemed self-checkout lanes as a time saver, according to Consumer Reports, the experience brings its irritations. Among them: 30% of survey respondents complained the systems did not work properly; 27% got peeved because the shopper ahead of him or her took too long.

"Then there is the real threat of lost loyalty. Reduced interactions with a store employee could easily result in an eroded sense of personal connection with the retailer or brand. This gets to emotion. Without it, it’s much easier to move one’s business elsewhere."

By the way ... there have been several stories out there quoting people who are trying desperately to minimize the impact of Amazon Go, with several articles taking the position that Walmart actually has a better idea - it is opening small stores that, in addition to offering gasoline and convenience items, also serve as delivery depots from which consumers can pick up products ordered online.

I'd be the last person to minimize the importance of what Walmart is testing in just a few markets - I think the concept could have legs, and I've been predicting here for years that we could see such installations in Walmart parking lots all over the country. But I'm not sure it rises to the level of being more innovative than Amazon Go, just because of the technological achievement involved. (But, of course, the final test - and arbiter of success - will be the degree to which consumers embrace both ideas and the degree to which the ideas can be rolled out.)

I do think a discussion of the impact of Amazon Go on jobs is worth having. The world inevitably was going to move in this direction, and it is better to embrace the moment than deny it or advocate moving backwards.

One thing that retailers have to do, I think is make sure that if they have checkout people, those employees have to invested in and advocates for the business. They have to make a difference ... and they have to know that how they behave and interact with customers makes a difference.

If you actually are going to have human employees in your stores, it makes sense that they provide a differential advantage. If they don't, then they may be damaging your business.

That's the way it is ... and it is an Eye-Opener.

Until, at least, we're able to come with a version of the "hosts" of "Westworld" to populate the retail environment.
KC's View: