Monday, December 5, 2016

Amazon Go - Experimenting Really Does Matter Says Investor Roger McNamee on CNBC

Image: Amazon Go
With the announcement of Amazon Go, the company is taking e-commerce to a whole new level. "Our checkout-free shopping experience is made possible by the same types of technologies used in self-driving cars: computer vision, sensor fusion, and deep learning," the company explained in a press release today. "Our Just Walk Out technology automatically detects when products are taken from or returned to the shelves and keeps track of them in a virtual cart. When you're done shopping, you can just leave the store. Shortly after, we’ll charge your Amazon account and send you a receipt.”

Stores will comprise of a compact 1,800 square feet of retail space so that busy customers can get in and out fast. All consumers need to shop is an Amazon account, a supported smartphone, and the free Amazon Go app. The first store is located at 2131 7th Ave, Seattle, WA, on the corner of 7th Avenue and Blanchard Street and is currently open to Amazon employees in a Beta program. It will open to the public in early 2017. To be notified of when the store opens, click here.

Speaking on CNBC’s Squawk Alley, Roger McNamee, co-founder of technology investment firm Elevation Partners, said, “I think this is part of a continuum that began a number of years ago when folks like Home Depot and then CVS and Albertson's and others like Walmart have experimented with self-checkout. That has been a mixed experience. I think the most compelling consumer experience was the one at Home Depot. Unfortunately, the technology they used to do it was then exploited by hackers to basically get access to all their corporate accounts. That didn't work out so well.”

Image: CNBC Squawk Alley
He continued, “These things have all had rough moments. The consumer experience has been everywhere from fantastic for the person who otherwise would've been in line for a long time, to just dreadful. I don't think that it's been as good for the company as they'd like to think. Amazon's model, which appears to be kind of a closed system, the whole thing is controlled by them, is way more consumer friendly. I really do hope it works. I'm not going to sit there and assume it's going to move the needle much for Amazon because Amazon's really big and really successful. I think moving the needle for them is hard. I think this is another example of Amazon really pushing the envelope in really interesting ways. I like this better than Dot and some of the other things they're doing.”

Human beings are really a positive part of retail

Answering a question about the comparison of Amazon Go with self-checkout at Apple stores, Roger said, “The early results from self-checkouts suggests that, in fact, self-checkout works in a relatively narrow set of circumstances with today's technology. Amazon's moving the technology forward. In principle it should enlarge the number of cases where it works. The reality is, having human beings in the retail experience is actually one of the more positive things for many retailers. Imagine Tiffany, there's a place where the sales person is really important. At Apple the human beings are really a positive part of the experience. I think there are other circumstances and grocery stores might be an example, where it's a mixed blessing. I don't expect this to take over the world. It just doesn't seem like an earth-shattering thing.”

Really hope Amazon Go works

Experimenting really does matter

In conclusion Roger said, “I'm just glad they're doing it. I think variety's a cool thing. I think experimenting really does matter. I do think that the employment impact is going to be something. Hopefully not terribly huge. I think what it will show, as the CVS thing has shown is that humans are actually a really positive part of retail.”

According to CNBC sixty-five percent of U.S. consumers who have never purchased groceries online said they simply preferred shopping in a store, based on a survey of 2,500 U.S. consumers taken by Cowen analysts.

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