In August, Amazon opened two more of its Amazon Go cashierless stores—one in San Francisco, the other in New York. The high tech convenience stores, which were first introduced in 2018, represent one of Amazon’s newest campaigns to alter the brick-and-mortar retail experience. To shop at Amazon Go, customers have to scan in with their Amazon Go app simply to enter; once inside, hundreds of cameras and sensors identify products that customers take off the shelves and put into bags. Their Amazon accounts are then docked accordingly based on the merchandise with which they exit the store (a process Amazon has dubbed “Just Walk Out” technology). No checkout, no cashiers, no waiting in line.
The company has announced plans to unveil a London location in the near future; in the longer term, they’ve set their sights on opening 3,000 such grocery and convenience stores by 2021. So far, there are just 15 of these stores in operation.
For a company with such imperial ambitions, spanning sectors from web hosting to freight logistics, 15 stores may not seem a particularly consequential project. But Amazon is not the only company pursuing automated retail. Such grocery giants as Carrefour, Tesco and the Walmart-owned Sam’s Club (which rolled out a 32,000 square foot cashierless operation in Dallas in late August), are also setting up cashierless locations. Tech companies like Microsoft, and a smattering of startups, have gotten themselves in the game as well.
In fact, according to a recent survey by the advisory firm International Data Corp, 28 percent of retailers are currently testing or piloting cashierless systems. According to The Wall Street Journal, the firm found roughly 100 companies worldwide currently engaged in the process of going cashierless.
The looming threat of automation encroaching from all sides has become a dominant theme in the media. Impending automation in factories has become a regular feature of doomsday McKinsey reports, and has been blamed for the closure of the GM plant in Lordstown. It’s been a staple of the conversation about driverless cars, which were supposed to imminently replace the fleets of Uber and Lyft. It has threatened to radically reshape the trucking and freight industries. A 2017 Pew study found that 72 percent of Americans are worried about the threats to job security posed by automation.
All of that has fed into the “robot apocalypse” being prognosticated by presidential candidate Andrew Yang, who prophesies a profound mass unemployment to which the only logical response is his $1,000/month universal basic income proposal. “All you need is self-driving cars to destabilize society,” Yang has told The New York Times.
But Yang mistakes the immediate risk for a more distant one. In fact, few of these threats have actually come to fruition. The timeline for driverless vehicles continues to be extended. GM shifted much of its Lordstown operation to Matamoros, Mexico, not for its robot density, but for a more traditional reason: its exceptionally low wages.
The real epicenter of the automation crisis has been the check-out line.
While it may not convey the stark visual jolt of a fleet of driverless semis barreling down the highway, the impact of cashierless automation could be huge. According to 2019 data from the Bureau of Labor Statistics, cashiering is the third largest occupation in the United States, employing 3.6 million workers, just a hair less than all food services and preparation. And these cashier jobs, which tend to be low wage, are disproportionately held by women and people of color. Indeed, 73 percent of cashiers are women.
With the retail sector already in the midst of major job losses brought on by private equity raidership, as in the case of Sears, and the rise of e-retail, cashier jobs were already under threat. Inroads made by automation are only exacerbating that crisis. “Cashiers are the canary in the coal mine,” Marc Perrone, international president of the United Food and Commercial Workers International Union, told me.
The concern isn’t just that Amazon Go will become the next big thing. It’s also that Amazon, by dint of sheer size, is the trendsetter in the retail sector. Even if the thousands of cashierless stores Amazon has predicted don’t materialize, the fact that Amazon has developed the technology—a cocktail of data analysis, image processing, and artificial intelligence—means that it will likely be made available (for a fee, of course) to other retail stores in the future. “It’s a crisis without a clear solution,” said Mark Cohen, the director of retail studies at the Columbia School of Business.
There are still plenty of obstacles to implementation. Walmart trotted out a cashierless system based on scanning barcodes for roughly 100 of its stores, but discontinued the program in April 2018. And theft remains a big issue: spend just a few minutes at a self-checkout kiosk at any CVS and that should become clear. For the time being, the high powered data analysis the startup world has to offer has been unable to solve that problem entirely.
Crucially, it’s unclear if customers will like cashierless stores. So far, self-checkout has not proven to be much of a crowd pleaser. With mounting concerns over privacy in the tech sector, there may be good reason to be distrustful of the technology.
There are also consumer access issues when it comes to cashless-only transactions. Some cashierless stores, like the aforementioned Sam’s Club in Dallas, don’t accept cash at all, while the Amazon Go store requires a smartphone with the Amazon Go app to permit entry. That means that those without phones, credit cards, or formal banking, which is a meaningful percentage of the country’s population, won’t be able to shop in these stores. That’s caused multiple cities, including New York and Philadelphia, to outlaw cashless retail altogether. Amazon has since softened its cashless dictum accordingly.
Even with all those complications, the proliferation of cashierless stores may come down to a simple analysis of cost. If the technology is cheap enough to subsidize the occasional shoplifter, it would be no surprise to see such stores spread. For an economy oriented around retail, the fate of cashiers—not drivers or assembly line workers—could soon become the real destabilizing force at the center of our great automation debate.