Dismissing Amazon Go and Scan-&-Go Technology Does A Disservice To The Retail Industry - Forbes

Photographer: Mike Kane/Bloomberg© 2018 Bloomberg Finance LP

Over the past week, there were a number of articles written in criticism of Amazon Go and the use of scan-and-go technology. A former Walmart executive, Joel Larson, even went so far as to say that Amazon Go is "a fairy tale for retailers that actually want to make money" and that scan-and-go technology pilots will eventually give way to employee-based mobile checkout solutions, akin to what Apple pioneered a decade ago.

Sadly, the arguments advanced in both cases are thin. They ignore the future for the comfort of the present at a time when open-mindedness is needed most. It is dangerous to dismiss the promise of these two technologies, without acknowledging the full context up for discussion, because doing so gives an almost tacit permission to those uncomfortable with change. It warrants them to bury their heads in the sand like an ostrich and do nothing as the retail world turns around them.

While a healthy skepticism is always important, whenever there is flawed logic involved, it is important to set the record straight. Amazon Go and scan-and-go innovation are vital to the progress of retail.

So let’s start with the most common arguments against Amazon Go:

Generally detractors highlight four key things when pointing out Amazon Go's flaws. I have heard these points made time and time again, in pieces like those mentioned above, at trade shows, and in conversations with colleagues throughout the country.

1. The Tech Is Too Expensive
2. The Tech Won’t Scale To Larger Footprints
3. Customers Still Want A Human Touch
4. The Tech Does Not Save Labor Costs

All of which calls to mind one word -- balderdash.

First, the tech is too expensive rationale loses validity whenever Amazon is involved. The Amazon Prime-consuming population, which some estimate is now nearing 100 million people just in the United States alone, basically acts like a pyramid scheme that covers Amazon's enormous R&D efforts. Other companies may not be able to pay for the tech involved in Amazon Go, but Amazon can and will. The tech will only get cheaper over time too.

Amazon has effectively moved the goal line. It can make as many Go stores as it wants and put as many as it wants in big cities, in airports, in hospitals, in strip malls, in retirement homes, and even inside of apartment buildings, all the while disrupting many other companies' business models in the process.

The nail in the coffin for me on the above was when Laura Heller, noted retail expert and the former Editor for Retail Dive, despite an early skepticism, remarked on one of my recent Omni Talk Spotlight Series Podcasts that Amazon Go "is something you really have to see to understand how great the technology is."

What game everyone is playing matters, and Amazon, as Laura's experience attests, is not only playing a different game than everyone else, it is also rewriting the entire playbook in the process. Just because the financials of Go may not work for other companies does not mean that Amazon Go will not still become a new consumer expectation over time.

Second, regarding scale -- who gives a flying fiddler’s you know what about whether the technology can scale up to larger footprints?

Why does this question even matter?

This argument is the one with which I have the biggest problem because it assumes the world of today will be like the world of tomorrow. Why should anyone assume that the world will still need large footprint or big box retailers 10 to 15 years into the future? The business models of large retailers and malls are already struggling against e-commerce because their value propositions with consumers are not as strong as they once were.

To dismiss technology over whether it can scale larger is like saying the world is flat. The beauty of Amazon Go and its platform (as opposed to the majesty of its actual shopping experience itself) is that, once all the kinks have been worked out, any mom and pop on the corner can begin to use it, just as they began to use Amazon's e-commerce portal for direct-to-consumer selling and distribution decades ago.

For every trend there is a countertrend, and tech like Amazon Go could be the technological breakthrough that gives back power over time to small box, local merchants who understand the inherent differences that make physical retail experiences special from digital ones.

Third, touching on the human touch argument -- customers only like and desire human interaction if it is a required element within the experience they crave. E-commerce has shown that a physical or human interaction is not important in all circumstances. When consumers know what they want to buy or have a strong inkling of what they want to buy, they will nearly always choose the most convenient and easy way to get the products they desire.

Put this to the test yourself.

For those Amazon Go naysayers out there, go buy something you need. First, go to an Amazon Go store. Then go to any chain drug or convenience store, on any street corner in San Francisco and New York, and tell me, just tell me, which experience is better. You don’t need human interaction in either one, and, in the latter situation, it is probably more of a harmful deterrent than a pleasure-filled experience.

Finally, the labor savings argument. This argument is small potatoes too. Usually the arguments on this front boil down (pun intended) to observations that Amazon Go still has employees roaming the store or concerns that humans are operating behind the curtains to ensure that the visual recognition technology is working correctly.

Both of these common complaints fall into the same death traps described above. They assume that the present day represents the future and that Amazon cares about costs. The cost of technology always decreases over time (and especially if Amazon has no design to increase the size of the box), and again Amazon has the deep pockets to make Amazon Go work until it becomes a social norm.

Now the scan-and-go theft argument:

Reports are that Walmart killed its scan-and-go pilots because of theft. If so, that is cool, and there is no reason to fault Walmart for that. But these reports should not be used as validation to stop all experimentation with scan-and-go as a concept.

The issue with such a logic leap is that it too, just like the Amazon Go arguments above, assumes that the shopping experience of the future will always be the same as it is today. It assumes that people will always shop the same way they have for centuries -- where stores are essentially shelves upon shelves of products, and customers essentially do their own picking by placing products within carts or bags.

Candidly, this last point is what continues to hold up scan-and-go implementations within the United States. American retailers, unlike Alibaba overseas, have not reimagined anything else surrounding the consumer shopping experience outside of just offering scan-and-go as a standalone service.

But, instead of as a standalone service, imagine a different world, a world where the elements of micro-warehousing work with scan-and-go to form a new equation. The items on a shelf are no longer for customers to pick but for show. Consumers simply shop a showroom of products with their mobile phones, and products are actually picked and packed behind the scenes while they scan the floor to tell retailers what they want.

You may think the above sounds nuts, but what was just described is no different from what exists already at an IKEA today, only modernized by way of technology.

In this new world, pencil and paper to write down Swedish names you cannot pronounce are replaced with scan-and-go technology, and automation and robotics evolve to do the picking on the behalf of customers. All of which means no more lines, no more checkout, and no more worries about theft because all the merchandise is bifurcated from the showroom and held within a micro-warehouse.

Not testing, not experimenting with scan-and-go implementations now, regardless of theft, means that companies will be behind the eight ball once smart entrepreneurs start to full scale redesign retail experiences entirely fresh from the ground up and start to combine scan-and-go with the full enchilada of other ideas like micro-warehousing, digital payment innovations, automation and more.

Now is the time for openness. Now is not the time to dismiss innovation for the safety and security of incrementalism.  It is time to agree and expand upon the innovative ideas of the present for the good of the future.

Bury your head in the sand long enough, and, before you know it, the present becomes unrecognizable from the past.

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