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Amazon Creates A Grocery Story With No Checkouts


The concept sounds bizarre to say the least. A convenience store where you walk in pick up groceries and walk out. No cashiers. No checkouts. You do pay – through your Amazon.com Inc. (NASDAQ:AMZNC) Amazon Go account.

Actually, the first Amazon grocery story in Seattle is only open to employees for now. It is expected that more stores, open to the public will launch in 2017.

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How It Will Work

When the company officially launches its 1,800 square foot self-service stores, customers will log in with their Amazon credentials on the Amazon Go app, pick up the items they want and leave the store.

Amazon hasn’t disclosed how it will separate shoppers from shop lifters, perhaps with some sort of facial-recognition system or other technology. However it works, Amazon says the store will be able to detect when products are removed and will charge your account when you walk out the front door.

The Innovation Amazon Needed

Several years ago Amazon CEO Jeff Bezos said he didn’t see a reason for Amazon to get into bricks and mortar stores. At the time, Bezos said the company just didn’t know of a way to be innovative enough to compete with an already established sector. Now Amazon seems to think it has found a way.

Eliminating cashiers, of course, has long been possible with self-checkout. Amazon has taken self-checkout to a new level by eliminating the checkout all together. The current beta operation in Seattle will likely resolve many of startup issues and other questions such as how quickly can the technology process an order?

Other Concepts Underway

Amazon has another grocery store concept under development that would allow customers to order food items online, drive to the store and pick them up in a parking stall without leaving the car.

Two of these stores are already under construction in Seattle according to people who spoke with The New York Times. In theory, the grocery pickup system would be simpler than the no-checkout concept and that may be why those stores are already under construction.

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Brick And Mortar Competition

Adding grocery pickups along with the no-checkout concept will put Amazon in direct competition with Wal-Mart Stores Inc. (NYSE:WMTC), Target Corp. (NYSE:TGTC), Kroger Co. (NYSE:KRC) and others.

Those stores have already started offering call ahead pickup and other convenience features in an attempt to head off the e-commerce giant before things get out of hand.

Wal-Mart said it plans to expand its service that lets shoppers order online and pickup curbside to 1,000 stores before the end of 2017.