Amazon Go is not the future of shopping

Amazon Go is little more than a fairy tale for retailers that actually want to make money, according to former Walmart exec, Joel Larson.

In a LinkedIn post, Larson, now VP of Innovation at Innowi, lays out a number of problems big retailers have with the type of technology used at Amazon Go stores. These include the cost of thousands of cameras in every store plus the resulting maintenance costs. “Amazon Go is a very small store around the size of a 7-Eleven, so normal retail stores will require thousands of cameras to cover their large store footprint when compared to Amazon Go,” he writes.

Labour costs would also be sizeable. “Yeah, you thought Amazon Go stores were “cashierless,” but in reality, there are people sitting behind computers in a back room reviewing all of the video footage where the computer vision system can’t fully determine what your item is. And the larger the store, the more people you need to review video footage, which means higher labor costs,” Larson says.

“Computer vision works on probability, so if the system is 92% sure of something, then it says, “Yep, it’s this item.” …But it’s still wrong 8% of the time on what item you have in your basket for this example. Try asking a retailer with billions in annual revenue if they are OK with their revenue being 8% less this year. Computer vision looks for features of items like text or logos, so the likes of Cheerio boxes pose a significant problem since the text and logos are the exact same on the 12 oz box compared with the 20 oz box.”

Amazon Go is “truly an incredible store and I'm a huge fan, but it’s more like Disney World than a practical solution for retailers today that need to keep in-store costs down to compete with online retailers that have very little overhead..But when you’re Jeff Bezos, you don’t care. It’s also a great place to put profit from other areas of your business to pay less on your taxes.”

Read the full LinkedIn post here.