Amazon Go

The endless aisle behemoth is working its magic on the physical side.

Today, Amazon revealed plans to open a checkout-free grocery store in Seattle in the spring. The first physical grocery store for Amazon is billed as “Amazon Go,” and it will deploy what the e-tailer has labeled “Just Walk Out Shopping.”

The Seattle store, at 2131 7th Avenue, is currently in a testing stage and only open to Amazon employees, selling ready-to-eat food and grocery staples.

It lets customers check in using the Amazon Go app, and in an Amazon-supplied video showing the process (show below), shoppers gained entry into the store by scanning a code on their smartphone and walking through a turnstile.

Then, a combination of “computer vision, sensor fusion and deep learning” (Amazon did not dive into specifics), automatically detects when a customer removes a product from the shelf and tracks them in a “virtual cart.” The customer can just take items and leave the store, while their Amazon account is automatically charged. This removes the checkout line, and the entire checkout process, from the shopping experience.

The idea of eliminating the cash register isn’t new to retail; companies ranging from Apple to Intermix have dropped them from stores, choosing instead to arm roving store associates with checkout devices. This concept takes the idea one step further by digitally tracking which products a customer is carrying and keeping.

Amazon said that it spent four years working on the idea, and in the meantime, its foray into physical retail has attracted considerable speculation. By year’s end, it will have five bookstores, in addition to multiple pop-up mall kiosks, in addition to this grocery store.

Ed Yruma, managing director, equity research analyst at KeyBanc Capital Markets, said that groceries and apparel would likely be two key focuses of Amazon’s expansion into physical retail, and that Amazon Go underscores the company’s commitment to physical store retailing. “The concept is expected to utilize a small-box concept and looks to be focused on convenience items. We think this is in addition to the grocery pickup locations that Amazon is also developing,” he noted.

Yruma suggested that Amazon might approach apparel stores with a showroom concept that lets shoppers view and try on merchandise that could be shipped later. It could also use RFID technology imbedded in apparel to track the location of objects. Rebecca Minkoff, for example, has experimented with this in dressing rooms that detect which items are in the space. This technology can be extended to a checkout process that detects which pieces the customer is taking out of the store.

In April, Avery Dennison Retail Branding and Information Solutions teamed with “Internet of Things” smart products platform provider Evrytng to imbed 10 billion apparel, activewear and footwear products with “unique digital identities and data profiles.” The products can interact with smartphones to perform a range of functions for the store — supply chain information, product authentication, automatic checkout — and to trigger personalized mobile content, such as loyalty programs, for each customer.

Tracking which items leave a store could be only the beginning. Deon Stander, vice president and general manager of Avery Dennison’s RBIS division, said that creating digital identities for items of clothing opens up brands and retailers to reaching the consumer in a personalized way.

“I am the consumer, and I scan something on my clothing that is uniquely identified, so the brand knows what I bought. That one-on-one engagement becomes powerful,” he said when the news was announced in April. “Consumers will benefit from digitized physical items, and there are probably a lot of applications that we don’t anticipate that will come to life.”