Amazon.com is one of the biggest retailers on the planet. Like, “bigger than Walmart” big.
The Seattle-based company sells everything from TVs to books, baby products, and movies. They make their own electronics. They will delivery groceries to your front door. They do absolutely everything.
For the longest time, however, Amazon only existed in the digital space. If you want to buy something from Amazon, you have to open your web browser or Amazon App to do so. The company then ships or couriers your desired product to your door without, meaning you never have to schlep to a real store and get something.
These days, however, Amazon is starting to open up physical stores and sell products in unique ways. First, they opened bookstores that let shoppers buy books at the steep discounts Amazon is known for. These stores are few and far between, but they directly compete with bookstore mainstays like Barnes & Noble.
Now, Amazon is opening a new store concept in its hometown of Seattle. There’s just one problem: they aren’t really employing many people to work there.
Amazon is preparing to open Amazon Go, a grocery store concept in Seattle. The store doesn’t have any checkout lines.
As you can see in the video above, you simply check in with your phone, grab what you want (and put back what you don’t want), and leave. You never have to talk to anyone. You never have to stand in line. You only get charged for what you take.
How does this work? Using sensors in your phone, cameras all over the store, and artificial intelligence, Amazon Go determines where you are, what you’re looking at, and what you pick up. It then automatically charges you when you walk out. That’s it.
This might sound fun and all, but it unfortunately negates the need for hiring hardworking people.
The entire selling feature of Amazon Go is to avoid waiting on line to pay a cashier. This flies in the face of any other retailer — even those with self-checkout kiosks — as there are 3.4 million cashiers working in the country. These cashiers are responsible for totaling items purchased and collecting money, and they provide a brief but often lighthearted interaction that many shoppers enjoy.
Why is Amazon avoiding cashiers entirely? The company is increasingly reliant on an automated workforce. Their warehouses have machines that automatically stock shelves, and they’ll eventually have machines that can pack and ship products without the need for human intervention. Amazon also wants to implement a delivery drone force, which would cut out their delivery partners (USPS and UPS) in favor of cheaper, automated robots to deliver goods.
This is good for Amazon, their investors, and their shoppers.
If Amazon can automate the bulk of their workforce and eliminate the need for cashiers, they can then significantly reduce their overhead. This means fewer salaries and benefits they have to pay. They save more money this way, less the cost of new automated machines and more money spent on research and development.
Since Amazon will save money on not having to hire workers, investors will be happy. In fact, they already are happy after the Amazon Go announcement, as Amazon stock ($AMZN) is up by 2.56% when this was published. Amazon gets to expand their business without worrying about staffing, thus reducing costs and increasing potential revenue.
Since the operating cost of Amazon Go is way less than your standard grocer, Amazon’s savings could potentially be passed onto shoppers. This could very well mean cheaper products in their stores.
Unfortunately, this could be bad for the American workforce.
Automating the cashier position means putting fewer people to work and not creating any jobs. While cashier positions are typically low-paying jobs, they’re still jobs that people in the lower and middle class rely on. Automating anything means reducing the need for a job that once existed. Fewer jobs overall means more people out of jobs, lower consumer spending, and an inevitable economic decline.
Think about this: if people are able to work as cashiers at a grocery store but can’t due to the position not existing, how are those people supposed to pay for groceries?
Amazon is all-in on automating their warehouses and stores. This lets them compete with other retailers by offering cheaper products using new and “experimental” buying experiences, wooing more customers in the process. Unfortunately, automation means job loss and lack of jobs, and no one benefits from that but Amazon.