Amazon has opened a small physical store that could be the future of grocery shopping, one where customers walk in, collect their purchases from the shelves and walk out — all without ever needing to line up to pay or check out.
Called Amazon Go, the location in Seattle is a pilot project that could roll out to other cities early next year. So far, it's still in beta testing, and for now only available to employees in Seattle where the company is based.
Shoppers who enter the store sign in by waving their smartphone over a reader. Once inside, they can wander through the aisles, picking up items. When they're done, there's no need to line up at a cashier — simply walk out the door, and the company will bill their Amazon account for whatever they have taken with them.
The system is sophisticated enough to tell when a shopper has picked up an item and then put it back on the shelf, versus one they have taken with them.
"If it works at all like it does in their video, this will be nothing short of revolutionary," says Doug Stephens, the founder and president of Retail Prophet.
The store is small by conventional grocery store standards: just 1,800 square feet. And everything is prepackaged and portioned, so there's no need to measure out or weigh items to determine the price.
Amazon first conceived of the store years ago and applied for a patent on it in early 2015. At the time, many conventional industry players pooh-poohed the idea, saying it would never work and would lead to rampant errors in terms of neglecting to scan an item, or charging a customer for something they didn't actually intend to buy.
"But as with most things with Amazon," Stephens says, "the industry seems to have once again underestimated this company's desire to knock down paradigms."
It's not the e-commerce powerhouse's first time dipping its toe into the physical realm. It has opened three bookstores in California, Oregon and Washington with traditional checkouts. Two more are in the works in Illinois and Massachusetts.
And Amazon's online store already sells groceries, often with same day delivery to Prime customers in many markets.
But taking on the big grocery chains on their home turf is something altogether different.
"It's a great recognition that their e-commerce model doesn't work for every product," says analyst Jan Dawson of Jackdaw Research, noting that physical stores would complement their online grocery offerings.
"If there were hundreds of these stores around the country, it would be a huge threat" to supermarket chains, he said.
Conventional wisdom in retail is that it's smart to funnel shoppers into checkout aisles at the end of their time, because that's one last chance to sell them things at eye level, in a captive market. But "the idea that you load everything on to a conveyor only to load it back into your cart seems so archaic," Stephens says.
If Amazon has found a way to do away with that part of the shopping experience, it could change the game for all retailers.
"The ease with which you can shop a website," he says, "the same thing is going to happen for physical stores."