Amazon Is Using AI To Transform Retail

Amazon.com has its first bricks & mortar shop and  is using machine learning to try to change the retail experience. 

Using a combination of machine learning, computer vision, sensors and deep learning, the smart store is designed to keep track of what users take off and return to shelves so it can track their purchases in a virtual cart.

When they're done, customers can just leave the store with their purchases; Amazon will charge their account and send them a receipt.

"We created the world's most advanced shopping technology so you never have to wait in line," the company said on its site. "With our Just Walk Out Shopping experience, simply use the Amazon Go app to enter the store, take the products you want, and go! No lines, no checkout. No, seriously!"

The 1,800-square-foot store, located at 2131 7th Ave. in Seattle, is in beta testing now so only Amazon employees are able to use it. The company expects it to be open to the general public in early 2017.

The store sells pre-made meals for breakfast, lunch and dinner and snacks made by on-site chefs and local bakeries. It also stocks milk and bread, along with meal kits, local chocolates and artisan cheese.

Customers only need an Amazon account, a smartphone and the Amazon Go app. "Four years ago we asked ourselves: what if we could create a shopping experience with no lines and no checkout?" Amazon said in its statement. "Could we push the boundaries of computer vision and machine learning to create a store where customers could simply take what they want and go? Our answer to those questions is Amazon Go and Just Walk Out Shopping."

Patrick Moorhead, an analyst with Moor Insights & Strategy, said he's intrigued by the concept and a bit surprised that a major retail brand already ensconced in brick-and-mortar stores didn't come up with it first.

"Automatic checkout is absolutely a characteristic of the store of the future," said Moorhead. "But I can see Amazon doing this to drive even more growth by going brick-and-mortar. The only way to be successful in brick-and-mortar is to change the game, and in this case, changing the game with checkout."

He also noted that this is a good use of smart technology. "This is the ultimate way to use this technology in retail," said Moorhead. "The challenge with all technology like this is accuracy. What if the system charges you for something you didn't take? That could be the big challenge to the system."

One of the biggest problems could be if the technology doesn't notice that a shopper picked up an item to look at it and then put it back. If the shopper is charged for something he didn't take, he wouldn't get the receipt and notice the false charge until after he left the store.

"If customers were charged for things they didn't take, it could lead to high customer dissatisfaction," said Moorhead. "If a bad experience is continuous, it could quickly drive customers away so they just stop using it."

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