Beyond the Amazon Go launch, Amazon is now finalising the details of larger supermarket options. This store differs from Amazon Go in the sense that it will have a much larger variety and allow customers to do their entire weeks’ worth of shopping.
However, unlike a traditional supermarket manned by dozens of employees, this version will only need three employees to service all the customers, with a maximum of ten on shift depending on the business of the store.
This is because Amazon has made enough technological advances to have support come in the form of automation and robots. To continue the experience of Amazon Go there will be no check out queues and the few staff in the store will cover restocking of shelves, signing up customers to Amazon Fresh and manning the drive-thru window for order collections, as well as helping robots bag groceries.
Why is Amazon taking this direction?
With the skeleton staff running the store, the boost in profits could be huge. This prototype model is estimating profit margins of more than 20%.Compare that with an industry average of 1.7%, according to the Food Marketing Institute, and we can see why Amazon would go this route.
Labour accounts for majority of a supermarket’s operating costs, with an average grocery store employing 89 workers. Amazon’s concept doesn’t call for any cashiers, which is the majority of employees in grocery stores.
How will this prototype remedy current grocery store pain points?
Amazon is investing in greeters, to reduce shoplifting, which is an ongoing challenge for skeleton staff stores; in addition there will also be high-tech motion sensors to track wayward goods. Sources within the online retailer reveal that shoplifting is a touchy subject for Amazon, saying that:
“Amazon may decide to bar its stores from shoppers who aren’t members of its “Prime” and “Prime Fresh” services, which carry annual fees.”
Related: Amazon Opens A ‘Real’ Store
“In the view of Amazon, people who can afford Prime memberships aren’t likely to shoplift. If someone walks in off the street, they’ll be able to access the stores, but they’ll have to sign up for a membership which means showing an ID,” reveals the source.
Additionally, the current design will reduce real-estate costs, which is another area large grocery stores battle with. This layout could eliminate at least half the aisles, with the robots upstairs selecting the items.
This concept sounds great for shoppers who hate waiting in queues and want a more convenient store. On the other hand, if this concept is successful and becomes popular, it won’t look good for the future of jobs in supermarkets, as others will surely follow in Amazon’s footsteps.