Is Amazon Go a sign of the downfall of a retail workforce?

Any time a disruptive technology with industrial or productive applications comes into play, the question arises as to whether or not that technology will result in the loss of jobs. This issue has been tackled extensively in the manufacturing sector, but what about retail? Are robots and IoT technologies putting our retail workforce at risk?

The Bureau of Labor Statistics has predicted a 7% growth in the retail workforce over a period of ten years, ending in 2024. This is a positive sign for the 4.8 million retail workers in the United States. However, what impact will technologies like those that drive the Internet of Things, artificial intelligence, and robotics have on the industry is harder to predict.

For one, these technologies are being developed at a breakneck pace. In the past year, drones and other automated delivery methods have promised to give online retailers an edge in both speed and reach of delivery. This adds pressure on brick-and-mortar retailers to not only make their stores more appealing to a modern customer base but to find ways to increase efficiency to remain competitive.

The impact of these disruptive technologies

To better understand the plight of the retail sector, we should first examine what has been going on in the world of manufacturing.

Manufacturing, especially in the auto industry, experienced a significant shift in employment as automated equipment became commonplace in facilities around the world.

Warehouse-level work for online retailers especially are a different story. Robots are already rolling around Amazon’s expansive warehouses, grabbing shelving units full of merchandise and bringing it to their human counterparts which pick items and place them in boxes for shipping. Amazon’s robotic armies haven’t ceased Amazon’s need to hire. Amazon grew its labor force by 47% over a period of a single year, much of this growth occurring in its fulfillment centers.

Back in 2012, PCWorld reported on Amazon’s vocational training program enabling employees that were currently working in unskilled warehouse jobs to train for more high-demand jobs. This includes job skills that aren’t directly related to Amazon, such as nursing.

While a direct connection between an increase in automation and the decline of U.S. manufacturing jobs is a topic of debate among economists, there is no question that corporations in virtually every sector are actively seeking ways to lower staffing costs while improving efficiency.

There’s no doubt that robots change the dynamic of the workplace. For retail workers, robots are being tested as a replacement for some of the many customer-facing retail jobs out there, but they’re in no danger of hitting the mainstream anytime soon. Human customers are slow to embrace a robot rolling down the aisles, asking customers if there is anything they can help the customer find.

The perks of a new generation of retail technologies

Amazon, a predominantly online retailer, has offered its own solution to the problem in the form of a brick-and-mortar store that cuts the cashier out of the purchasing process. Customers of the upcoming Seattle-based Amazon Go store will walk in, pick out their item(s), and walk out. The only thing the customer needs to do is load the Amazon Go app on their phone and check in. Their Amazon account gets charged after leaving the store.

This process takes advantage of a number of emerging technologies including computer vision, sensor fusion, and deep learning to track the customer’s movements throughout the store and which item(s) they take off the shelves as you shop. Upon leaving, your Amazon account is charged for any item(s) you have with you as you walk out the door.

This has many upsides for customers. Shoppers don’t have to interact with a store employee if you don’t want to. You can rush in and rush out in seconds rather than waiting in line to check out. For the store, it means less overhead. You won’t need as big of a staff, or the staff that you have can spend more time concentrating on providing good customer service prior to checkout.

For nearly a decade, technologists have been predicting that technologies such as RFID would enable shoppers to load their carts with goods and bypass the checkout line. Some stores, including Kroger’s, have been testing technologies that would speed up the checkout experience by automating the process utilizing 360-degree barcode scanners.

Smart carts with location awareness and integrated RFID readers are already being tested and show a lot of promise. These carts, which include a tablet-like interface can do things like present shoppers with location-aware ads that direct them to a sale or recommend recipes based on nearby ingredients. These carts can even track shopping habits of particular customers and offer directions to specific items.

This technology doesn’t inherently supplant a worker. It enhances the customer experience in a way that complements the customer service that can be provided by the human staff. It also provides the retailer with an additional source of revenue through ad sales and upselling.

But for every upside….

Any time you change a customer’s experience, a level of friction presents itself. Change is very difficult. People, in general, don’t like change if it means they have to learn how to use a new system. Efficiency has to come with a heavy dose of convenience.

Right now, supermarkets and grocery stores around the world the United States are taking advantage of self-checkout lanes. These lanes enable customers to scan, bag, and work the register for their own purchase. This enables a single cashier to monitor 6, 10, or more checkout lanes at a time. This means fewer cashiers are needed.

Self-checkout lanes are an alternative that these stores are turning to in order to improve efficiency. That creates less demand for cashiers in particular. Employees are often cross-trained to assist with any number of tasks when checkout is slow.

The challenge of these self-checkout lanes comes in the form of increased occurrence of theft. Scales that weigh produce at the self-checkout scanner can be tricked by a crafty customer where a trained cashier ensures an accurate accounting for the merchandise being ringed up.

Will Reynolds Young member of UFCW (United Food and Commercial Workers) said, “Self-checkout lanes are slower and less efficient for customers, despite the misconception that they’re faster. They’re also easy to trick. A single “watcher” can only really monitor three lanes, and even then that’s too much.”

Take the challenges of keeping an honest account of a customer’s purchase on a self-checkout lane and cut out the checkout part of this experience. We’ve all seen what a madhouse retail stores can be during sales, such as those held on Black Friday each year. How accurately can cameras and advanced scanning systems track merchandise when it’s being fumbled around in a crowded store?

RFID tracking is a possible solution, but RFID-blocking bags and accessories are very easy to acquire.

Just as with most technologies, the more convenient you make them, the less secure they become. People are crafty, and they will find ways around these systems. It could be argued that for every cashier replaced by a robot, there would need to be a human standing at the door checking receipts.

What does the future hold?

Amazon Go’s model is intriguing. If successful, it would become a proof of concept for a technology that would undoubtedly be licensed and/or adopted by other retailers. Go’s model isn’t one for a supercenter or a giant grocery store. It’s a test, with a small retail space in a calm corner of Seattle. Despite some claims in the media that as many 2,000 Amazon Go stores are in the works, the company insists that the checkout-free trial will be anything but a massive brick-and-mortar rollout.

So while these technologies are certainly changing the world of retail, the idea that a store would be entirely powered by IoT technologies and staffed by robots is still a bit far-fetched. Beyond the boutique examples of trendy Quinoa restaurants, which still have human attendants present to assist customers with using the technology, the vision of retail stores smattering the landscape devoid of a human workforce remains one of science fiction.

For now.

 

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