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There's not just the reduced cashier costs, but the vastly increased revenue per foot of store that will come about when customers know they don't have to wait

There's not just the reduced cashier costs, but the vastly increased revenue per foot of store that will come about when customers know they don't have to wait in line. The store will also be less empty per dollar of sales; or, said another way, shoppers will spend less time in store, creating the appearance of an emptier store for shoppers walking by, making it less time-consuming to enter. Oh, and don't forget those prime signups just for people who want to try the store (though the number of non-prime subs when these stores rollout will be not huge).

nieksand 9y ago
Indeed. The article didn't touch on how this approach reduces friction for buyers, which is hugely important. For the short-to-mid term, I suspect that frictionless shopping is a bigger deal than change in cost structure that comes from booting cashiers.
- panarky 9y ago
  Exactly this! Stratechery has a giant blind spot about Amazon's strategy, completely missing their #1 objective: customer obsession. Bezos was clear about this from the beginning [0] and he repeats it every chance he gets [1]. He's not just bullshitting, this is actually the strategy, and it fucking works! Stratechery opined that the Whole Foods deal was about putting Amazon products in physical stores. Of course not, it's the opposite -- it's about bringing awesome Whole Foods products to far more customers than Whole Foods reaches today. Now Stratechery says Amazon Go is about eliminating cashier labor and leveraging fixed costs. Ridiculous! If a well-paid cashier costs $15 per hour and can scan 12 items per minute, the cost is only 2 cents per item. In fact, the cashier savings is probably more than offset by additional labor on the sales floor and to maintain all the sensors, cameras, turnstiles and software. This is all about Bezos' customer obsession. If I don't have to wait in line, I'll happily shop Amazon Go every time I can, multiple trips per week. As a customer I'd be thrilled to eliminate the dead time of waiting in a line. [0] 1997 Letter to Shareholders https://www.sec.gov/Archives/edgar/data/1018724/000119312513151836/d511111dex991.htm https://www.sec.gov/Archives/edgar/data/1018724/000119312513... [1] 2016 Letter to Shareholders https://www.amazon.com/p/feature/z6o9g6sysxur57t https://www.amazon.com/p/feature/z6o9g6sysxur57t
Gargoyle 9y ago
I must be weird. At no time has the idea of a line ever influenced my decision to go into a convenience store.
- sgift 9y ago
  Or people like me who don't go shopping in convenience stores at Saturday are weird. I only do it under duress if I forgot something the other day, because I know the line will be so damn long.
- jonknee 9y ago
  Happens all the time to me, I'd rather give my money to someone with more appropriate staffing than wait in line to buy something.
  - Gargoyle 9y ago
    So where do you go instead?
    - jonknee 9y ago
      Sometimes nowhere, sometimes down the street. I do the same thing for restaurants, if there's a wait or my reservation isn't ready on time I'll go somewhere else. There's tons of competition out there, no need to waste my time for the benefit of a business owner.
- reaperducer 9y ago
  I agree with you, and go one step further. I refuse to use self-checkout. For two reasons. 1. I don't like the thought of contributing to a system that costs people (cashiers) their jobs. 2. The whole reason I go to a store is for customer service. If I wanted self check-out, I'd order online from one of the same-day-delivery outfits.
  - onion2k 9y ago
    I don't like the thought of contributing to a system that costs people (cashiers) their jobs. People in boring, low paid jobs shouldn't be there. There are far better things people can be doing than working a till. The idea that we're doing people a favour by 'enabling' them to have a job when that job is tedious menial work a tiny compute can do is nonsense. We need to automate those jobs away to free people to do more interesting, fulfilling things. We also need to do things to work out how to enable those people to do more interesting work, like figuring out how to pay people if the free market fails, but that's a separate issue.
pythonaut_16 9y ago
In a way, what Amazon is really testing here is how to make brick and mortar shopping competitive with online shopping. But rather than undercutting their online business what they're really doing is finding ways to compete with other retailers in spaces that are hard online, such as groceries and immediate items.
lumisota 9y ago
A Prime subscription isn't required to use the store. https://arstechnica.com/information-technology/2018/01/we-test-the-worlds-first-amazon-go-watch-you-shop-grocery-store/ https://arstechnica.com/information-technology/2018/01/we-te...

nieksand 9y ago

Indeed. The article didn't touch on how this approach reduces friction for buyers, which is hugely important. For the short-to-mid term, I suspect that frictionless shopping is a bigger deal than change in cost structure that comes from booting cashiers.

panarky 9y ago
Exactly this! Stratechery has a giant blind spot about Amazon's strategy, completely missing their #1 objective: customer obsession. Bezos was clear about this from the beginning [0] and he repeats it every chance he gets [1]. He's not just bullshitting, this is actually the strategy, and it fucking works! Stratechery opined that the Whole Foods deal was about putting Amazon products in physical stores. Of course not, it's the opposite -- it's about bringing awesome Whole Foods products to far more customers than Whole Foods reaches today. Now Stratechery says Amazon Go is about eliminating cashier labor and leveraging fixed costs. Ridiculous! If a well-paid cashier costs $15 per hour and can scan 12 items per minute, the cost is only 2 cents per item. In fact, the cashier savings is probably more than offset by additional labor on the sales floor and to maintain all the sensors, cameras, turnstiles and software. This is all about Bezos' customer obsession. If I don't have to wait in line, I'll happily shop Amazon Go every time I can, multiple trips per week. As a customer I'd be thrilled to eliminate the dead time of waiting in a line. [0] 1997 Letter to Shareholders https://www.sec.gov/Archives/edgar/data/1018724/000119312513151836/d511111dex991.htm https://www.sec.gov/Archives/edgar/data/1018724/000119312513... [1] 2016 Letter to Shareholders https://www.amazon.com/p/feature/z6o9g6sysxur57t https://www.amazon.com/p/feature/z6o9g6sysxur57t

Gargoyle 9y ago

I must be weird. At no time has the idea of a line ever influenced my decision to go into a convenience store.

sgift 9y ago
Or people like me who don't go shopping in convenience stores at Saturday are weird. I only do it under duress if I forgot something the other day, because I know the line will be so damn long.
jonknee 9y ago
Happens all the time to me, I'd rather give my money to someone with more appropriate staffing than wait in line to buy something.
- Gargoyle 9y ago
  So where do you go instead?
  - jonknee 9y ago
    Sometimes nowhere, sometimes down the street. I do the same thing for restaurants, if there's a wait or my reservation isn't ready on time I'll go somewhere else. There's tons of competition out there, no need to waste my time for the benefit of a business owner.
reaperducer 9y ago
I agree with you, and go one step further. I refuse to use self-checkout. For two reasons. 1. I don't like the thought of contributing to a system that costs people (cashiers) their jobs. 2. The whole reason I go to a store is for customer service. If I wanted self check-out, I'd order online from one of the same-day-delivery outfits.
- onion2k 9y ago
  I don't like the thought of contributing to a system that costs people (cashiers) their jobs. People in boring, low paid jobs shouldn't be there. There are far better things people can be doing than working a till. The idea that we're doing people a favour by 'enabling' them to have a job when that job is tedious menial work a tiny compute can do is nonsense. We need to automate those jobs away to free people to do more interesting, fulfilling things. We also need to do things to work out how to enable those people to do more interesting work, like figuring out how to pay people if the free market fails, but that's a separate issue.

pythonaut_16 9y ago

In a way, what Amazon is really testing here is how to make brick and mortar shopping competitive with online shopping. But rather than undercutting their online business what they're really doing is finding ways to compete with other retailers in spaces that are hard online, such as groceries and immediate items.

lumisota 9y ago

A Prime subscription isn't required to use the store. https://arstechnica.com/information-technology/2018/01/we-test-the-worlds-first-amazon-go-watch-you-shop-grocery-store/ https://arstechnica.com/information-technology/2018/01/we-te...