Last year, Amazon opened a physical bookstore in Seattle, a program it has since expanded to other US cities. And this week, Amazon has announced that it is beta testing a brick-and-mortar convenience store in Seattle, a concept it has dubbed Amazon Go. While at first glance it is surprising that Amazon would be so eager to enter the world of physical retail, upon closer examination Amazon's moves start to make a lot of sense. In truth, despite being best known as an internet company, Amazon's remarkable success has always relied upon the company's unique status as a leader in two seemingly very disparate milieus – the ethereal world of e-commerce, and the physical world of logistics. As I have written before, however, success in the digital era increasingly depends on developing business models and competencies that take advantage of the merging of the physical and the digital. Few companies do this better than Amazon does.
Aside from the sheer irony inherent in fact that the company which has done more than any other to disrupt the world of retail by helping usher in the era of e-commerce is opening a physical store, the novelty of Amazon Go is that Amazon has completely done away with the check-out line. Amazon claims to have completely automated the checkout process, by using what it calls "Just Walk Out" technology (which the company says employs similar technologies to those used to operate self-driving cars), so customers can simply grab items off of the shelf and walk out of the store, and they will automatically be charged the correct amount through a smartphone app.
Cashier jobs are not about to disappear overnight
