Amazon and its ambitious foray into physical retail has hit yet another roadblock. The e-commerce giant has announced the closure of eight of its cashierless Amazon Go locations in Seattle, New York, and San Francisco, citing the need for cost-cutting in the face of slowing sales growth. This latest move has cast a pall over the future of the company’s brick-and-mortar investments.
Since its inception in 2016, the Amazon Go format has been a groundbreaking model for physical retail, with its cashierless technology and convenience-focused product offerings. However, the pandemic dealt a severe blow to the format, as remote work made office meal options less of a priority for workers. Now, the format has become the latest victim of Amazon’s ruthless cost-cutting measures.
The Amazon Go Self-Checkout Stores to Close Soon
Amazon’s foray into physical retail has been met with numerous challenges, from the closure of bookstores and novelty shops to the recent pause in the expansion of its Amazon Fresh supermarkets. These setbacks have raised questions about the company’s strategy for increasing grocery sales and standing out in an already crowded market.
The closures are set to take effect on April 1, leaving customers with limited time to take advantage of the convenience that Amazon Go stores provide. The move has sparked concerns about the future of the format, as well as the company’s ability to crack the physical retail market.
The decision to close the Amazon Go stores comes as the company is facing mounting pressure to cut costs, following a pandemic-era boom that has since petered out. Last year, Amazon froze most corporate hiring and began a round of layoffs that will ultimately affect 18,000 workers. Furthermore, Bloomberg reported that the company is putting construction at its second headquarters near Washington on hold.
While Amazon remains committed to the Amazon Go format and currently operates more than 20 locations across the US, the latest closures have raised concerns about the viability of the format and the company’s ability to navigate the challenges of physical retail. As the company continues to assess its portfolio of stores and make optimization decisions, customers and investors alike will be watching to see what the future holds for Amazon’s brick-and-mortar ventures.
The Amazon Go Stores – a Futuristic Model That Is Not Precisely Working
Amazon Go stores are brick-and-mortar retail locations that operate on a cashierless, checkout-free model. Customers simply enter the store, scan their Amazon Go app at the entrance, and proceed to select the items they wish to purchase.
The store uses a combination of computer vision, sensors, and deep learning algorithms to track which items are being taken off shelves and placed in the customer’s shopping cart. This technology is able to accurately detect when an item has been removed, and then adds it to the customer’s virtual cart. If an item is returned to the shelf, it is removed from the virtual cart. Once the customer is finished shopping, they can simply walk out of the store without stopping at a traditional checkout. The total cost of their items is automatically calculated and charged to their Amazon account. Customers receive a digital receipt via the Amazon Go app, and can also opt to receive a paper receipt if desired.