I Visited the New Amazon Go Store in Chicago – Here's Are Some Implications for Payments

I Visited the New Amazon Go Store in Chicago – Here's Are Some Implications for Payments

I Visited the New Amazon Go Store in Chicago – Here Are Some Implications for Payments

Erin M. Sarris

Erin M. Sarris

Erin M. Sarris is the managing editor of ngenuity journal. With more than 10 years of experience in payments, she oversees all aspects of the publication to ensure it covers a variety of topics related to financial services.

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Does it still count as a 'card-not-present' payment transaction if your credit card is not present but you physically are?

That was my first thought as I passed through the gates at the recently opened Amazon Go cashless convenience store in Chicago. As someone who’s been part of the payments industry for nearly my entire career, this felt like a Christmas morning of sorts ― except I got to select my own 'gifts' as part of a retail shopping experience where payments take their rightful place in the background.

For years, I've thought about how thrilling it would be for the day when you could simply walk out of a store without paying and your tab is automatically settled up via some kind of invisible, future-state technology that just 'knows' what you bought. Leaving the store, goods in hand, without interacting with any person or machine used to be called stealing. Now it's called 'Just Walk Out' technology, pioneered by Amazon.

Entrance to the Amazon Go store in Chicago.

Despite the effusive media coverage surrounding the three new stores in Seattle and Chicago, I still didn't feel like I really understood how it worked. Something about facial recognition? Or maybe it was the same weight-sensing technology that prevents one from raiding their hotel mini bar without getting charged? Or was it a combination of the two?

One thing I knew for sure was that you'd never have to wait to check out or interact with a person if you didn't want to. That was enough to get me through the doors, just blocks from the Sears Tower (now known by those outside Chicago as the Willis Tower) ― and, ironically, in the shell of an old Books-a-Million store.

Yes, there was no wait to check out. But I found that checking in was a different story, at least for first-time users.

Getting apped up

My first mistake as a rookie Amazon Go shopper was failing to download the app before I arrived at the store. Which meant I stood outside with a handful of other stragglers while waiting for the maddeningly slow cell service one has when surrounded by skyscrapers.

Once I had signed into the app with my Amazon account, I simply placed my phone (with its QR code displayed) atop a locked kiosk at the entrance. After a blinking green light gave me the go-ahead, I was in ― just as easily as if I was gaining access to the subway or getting on an airplane. These turnstiles are heavily safeguarded by Amazon Go staffers, as the only way you could possibly shoplift is to somehow get in without scanning your unique code.

What's in the store?

When I first heard about the Amazon Go concept, I had kind of expected the retail space to be a microcosm of Amazon itself ― home items, books, clothing, electronics and other consumer goods. After all, you can buy everything plus the kitchen sink on Amazon, so I wondered how they'd find the most commonly shopped items to bring to the store.

In reality, the scope was a lot narrower than that, with a focus on grab-and-go food, as well as convenience items like aspirin, tissues, etc. Think less of a Best Buy or Target and more of an upscale 7-Eleven. Much of the inventory had overlap with ― surprise! ― Whole Foods. So in addition to major snack brands, you’ll also find organic or local offerings.

A white tiled wall in the Amazon Go store in Chicago. The wall reads "No Lines. No Checkout. (No, Seriously.) Just Walk Out Shopping"

Sensor fusion confusion

There was a very high ratio of employees to shoppers ― even more Amazon associates than people browsing the store at one point. I asked several of them to explain to me how the technology worked ― could I really just walk out of the store and expect to be charged accurately?

One phrase echoed by all of them was 'sensor fusion,' which means shelves can detect which items have been removed using proximity sensors. "Okay," I thought, "Just like the minibar that charges you for the orange juice even if you put it back." But, no: unlike the hotel minibar example, purchases are validated through communication with mobile phones, either through RFID, Wi-Fi or NFC, along with facial recognition through the dozens and dozens of cameras in the ceiling. That means you can pick up an item, read the label and put it back without it going on your tab.

(A critical rule of Amazon Go – don't pick something off the shelf and hand it to a stranger unless you want to pay for that stranger's item. Sensor fusion is smart, but it's not quite that smart yet – the cameras will still attribute the purchase to the first person who picked it up.)

After you've selected your items (or, like most of the shoppers, milled about the store slack-jawed like they'd never seen a bag of artisan popcorn before), the checkout process is actually very anti-climactic.

Just leave.

That's it. You're done.

Less than five minutes later, I received an email with my receipt, payment method and a summary of how long I was in the store. (I can already imagine regular visitors gamifying this stat somehow and trying to achieve a personal best for lunchtime speediness.)

There's no doubt, this is shopping for the future. Here are my takeaways at it pertains to the payments industry:

Payments

The only thing 'revolutionary' about Amazon Go from a payments perspective was the use of a QR code, which actually isn't very revolutionary at all. Across the globe, QR codes are used regularly to conduct payments where infrastructure is scarce. For example, M-Pesa has used QR codes in developing countries for more than a decade. WeChat Pay and Alipay have made the codes mainstream in China, and in the United States, you have LevelUp as well as other retailers' apps like Starbucks, Whole Foods, Target's Cartwheel, etc. So with that context, the method of payment isn't new, just being used in a new way using sensor fusion, computer vision and deep learning technology to track your items in a virtual cart.

Retail

Checkout time is one of the biggest pain points for retailers, who are constantly evaluating new technology or methods to help speed it up. Why? I saw with my own eyes that eliminating checkout to mere seconds means consumers will leave the store with more. If I worked or lived down the street, I could see myself regularly coming there for a snack or a quick lunch ― and maybe walking out before I even had time to evaluate my decision or change my mind.

Amazon has been fairly tight lipped about exactly how the technology works. Just like Willy Wonka's chocolate factory, some things need to be kept secret. What wouldn't surprise me, however, is if it started licensing this technology to other stores to help retailers move inventory ― and shoppers ― through the turnstiles more quickly.

Inclusion

Friction, friction, friction ― those of us in the payments industry love to talk about it, and specifically how to reduce it. But I couldn't help but think of the large percentage of the population that has a deal-breaking level of friction in this scenario: those without access to banking services and smartphones. Before something like this can go mainstream, we need to consider how to better bring unbanked and underbanked consumers into the fold so the ease and convenience of this technology can be used by everyone, bank account or not.

Mental shifts

I was surprised to notice that my heart rate picked up a bit as I walked through the exit, even though the entire point of the experience was to leave without checking out. I spend a lot of time with UX and design folks who are always talking about 'mental models,' which are a representation of the external world that's created in your mind. And in my mental model, leaving a store without paying at the end means stealing.

Even in other shopping situations when accidentally tripping up the shoplifting sensor, I panic (despite the fact that I'm no longer a suspicious-looking teenager). So 'Just Walk Out' is a brand-new mental model for consumers that's going to take some time to establish.

I came, I saw, I'll "Go" back

As for me? I look forward to my next visit to Amazon Go. And while I'm fully aware that calling something "The Uber of" an unrelated industry is trite at best, and flat-out wrong at worst, this experience practically made the comparison for me. Outdated mental models be darned ― "Just walk out."

The statements and opinions of the writer do not necessarily reflect those of TSYS.

Other Articles by Erin

Erin M. Sarris

Erin M. Sarris is the managing editor of n>genuity journal. With more than 10 years of experience in payments, she oversees all aspects of the publication to ensure it covers a variety of topics related to financial services, including mobile, B2B and emerging technology.

Erin has written for publications of The Chicago Tribune, RedEye and Metromix.com, as well as The Washington Post's Retirement Living, TV Guide, Washington Spaces, Columbus Valley Parent and The Peoria Journal Star. She graduated from Bradley University with a bachelor of science in political science and communication, and from Columbus State University with a master’s in business administration.

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