The first consumer available Amazon Go store opened and every grocery cashier is looking at their paycheck. Well that’s probably an overstatement and in fact Amazon has been testing its Go concept on its own employees since December of 2016 and in development and internal testing for about five years, so the concept is far from new. And while the general news is all about consumers being able to walk out the door without saying hi to a cashier the real story is all about inventory and supply.

 

It’s all about the data

The grocery store has come a long way since every item on the shelf sported a price sticker and was manually keyed in at checkout time. In fact there are plenty of self-checkout lines in grocery stores where consumers scan their own goods and handle their own payment transactions. What’s changed with Amazon Go is the evolution of scanning as it now includes contactless understanding of the products and the customer. And the data collected during the shopping spree informs Amazon’s backend systems about more than standard cash register information, it updates shelf location data, consumer traffic patterns, and even how consumers handle the merchandise as they make buying decisions.

One obvious benefit is the ability to understand sales patterns and replenish stocks automatically. As more Go stores open the aggregated data can be used to schedule delivery on a regional basis and keep local inventories at lower levels based on predictability. Interestingly Amazon is not currently correlating individual shopping behaviors to its online stores though it would seem to be a natural extension.

The tech isn’t what traditionalists would expect

Go store makes extensive use of cameras and sensors to understand what users are picking up and putting back. But while many might expect to see greater implementation of RFID technology as tracking mechanisms the store uses pattern recognition to identify packages and weight scales embedded in shelving. Weight has been part of product information for a long time and helps in securing self-checkout kiosks and pack and ship operations. Amazon says its scales allow it to track when shoppers pick up and replace items to keep accurate counts of its product.

It’s easy to track back the individual components of the Go store to the origin of product information that has been driving the supply chain for decades. But the use of standard item attributes in new ways could signal the end of some retail mainstays like item barcode systems. If cameras can accurately identify products simply from their packaging design there’s no need for the extra printing and tracking of barcodes. And the imaging capabilities are likely to become more widely used as CPG suppliers look to reduce complexity and costs going forward.

It’s too soon for everyone but Amazon to feel confident in the future of the Amazon Go store but the trend is one that is likely to have wide ranging consequences for all retail and beyond.