There has been quite a lot of attention in the last few days on the Amazon Go unit in Seattle being opened to the public. Much has focused on whether this is the end of retail work and how fast this will sweep through our food retailing.
A couple of things should be immediately stated. Amazon Go has been in trial mode for some time now, and its public opening is somewhat later than expected. This suggests some teething problems, which given what is being attempted, is to be expected. Secondly, this is a small store, one shop trial. There may be more to come (indeed, will be more), but should local stores across Scotland be worried at this point? Hardly. Reality and hype are a long way apart here again.
Amazon Go is a logical continuum of trends we already see. Watching the roll-out of self-checkouts in heavily trafficked urban stores, and of cashless shopping shows the consumer demand for speed, rapidity, convenience and perhaps control. Amazon Go takes this to another level (through its use of technology and machine learning) and integrates the product end of the retail operation to the in-store consumer experience. For some consumers this will be perfect; for others not so. For the retailer, the linkage and integration could be great, but there remain questions over the cost and return. Will the increased throughput, sales (possibly) etc. and reduced labour costs outweigh the technology costs (not now necessarily, but in the future)? It is one version of the future, but is not going to be the only one.
There were a couple of tweets around the topic which made me laugh:
The absurdity of queuing to get into a store whose whole rationale is not to have queues, demonstrates perhaps our tech interested world and the fascination for all things Amazon and innovative. Just Walk Out indeed – be nice if we could Just Walk In. As for WH Smith, well that’s just cruel, though true! Their use of self-checkouts is one that regularly drives consumers crazy. How not to do technology.
The Amazon Go story came at the same time as Tesco and Sainsbury (following Asda in December) announced job cuts in stores and especially management level reductions. Pressured by costs and competition, these retailers are having to look at all their practices and with labour being a major cost, it is the obvious target. Much of the change seems to be in reducing management (and full-time) staff, mainly (though not entirely) in the larger stores, reflecting the significant pressure such units are under. Whilst some staff may get redeployed, there will be a lot of personal upset at the job losses, and lives affected.
Taken together Amazon Go and Tesco/Sainsbury point to the ever changing nature of retailing. In the UK, the BRC Retail Employment Monitor for the fourth quarter of 2017 found that employers in the sector had 2.9% fewer staff, working for 3.9% fewer hours than they had a year earlier. There are new jobs to be had and significant skills are needed in retailing, but these are changing. Amazon Go points the way in which some parts of retailing will be rethought – if consumers allow. Whilst work in retailing will always be there, its nature and scale continue to evolve and there is no doubt the scale of retail work will continue to be affected by technology and competitive effects. Whether this will result in a loss of 900,000 jobs in the UK by 2025 remains to be seen, but current trends certainly point to real pressures on workers.