“Just walk out,” say the signs at the entrance and store windows at Amazon’s newest concept store. “No lines. No checkout. (No, seriously.)”
Amazon Go opened in Seattle last week with much fanfare, raising a host of questions about the future of retail. Among them: How will the company handle shoplifting? And what does the tech-heavy, no-cashier concept mean for shrink — industry speak for theft, damage and other errors that might eat away at a retailer’s inventory — which costs retailers an estimated $48.9 billion a year?
One of the store’s first patrons took to Twitter Jan. 22 to report that Amazon Go had failed to charge her for a container of vanilla yogurt. “I think I just shoplifted??,” CNBC reporter Deirdre Bosa wrote on the social media platform using the hashtag #freestuff.
Amazon executives responded with a giant shrug.
“It happens so rarely that we didn’t even bother building in a feature for customers to tell us it happened,” Gianna Puerini, Amazon Go’s vice president, told CNBC. “I’ve been doing this a year and I have yet to get an error. So we’ve tried to make it super easy on the rare occasion that does happen either to remove it or enjoy breakfast on us.”
But retail analysts said the incident raised concerns about how the store, which relies on a system of cameras, scanners and infrared sensors to track customers’ movements and purchases, might handle theft, whether intentional or not. A spokeswoman for Amazon Go did not immediately respond to an email seeking comment for this story.
“The absolute biggest concern for me is shoplifting,” said Paula Rosenblum, managing partner at RSR Research, a retail technology consultancy in Miami. “How long until someone figures out a way to cheat the system by — who knows — wrapping items in aluminum wrap or stuffing them into metal containers? Shrink, as a general rule, is a big problem for the industry that nobody has been able to solve.”
“Is it still shoplifting if it’s not the customer’s fault?” added David Bell, a marketing professor at the University of Pennsylvania’s Wharton School. “I suppose it’s in the eye of the beholder.”
The rise of online shopping and app-based payments have given way to a gray area, retail and technology experts say, where the culprit for lost revenue might not be a nefarious customer or an employee slipping items into coat jackets, but a technical glitch. Take, for example, instances where a ride-sharing app doesn’t charge a rider for the full ride, or when a warehouse employee accidentally sends an extra item to a customer. Not the shopper’s fault, but it is still a potential problem for retailers.
Supermarkets, analysts said, are among the most vulnerable retailers, in part because large, chaotic stores make for easy targets.
“There’s an entire cottage industry in place to find ways to steal from stores,” Rosenblum said. “The customer is the biggest variable there is.”
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