The 21st of January, 2018 will probably go down in history as the day on which Amazon changed the entire retail industry. On this day the first cashier-less and register-less store opened in Seattle. It’s called Amazon Go and has a great chance to reshape the retail market and take us to a future of queue-less shopping.

The idea is simple but its execution is extremely complex and requires sophisticated technology as well as out of the box thinking.

A Huge Opportunity for Amazon

1) More consumer data will lead to better shopping recommendations: Amazon is known for its ability to gather and use data to offer an ever-improving customer experience.

2) A feed into Amazon’s AWS business: The technology powering Amazon Go will likely become a commodity sooner rather than later, and Amazon can choose to offer it to other retailers as a complement to its Amazon Web Services (AWS), which include cloud-computing services, analytics and marketplace platforms.

What it Means for the Industry

The news of Amazon Go’s launch is coming at a time when Walmart is piloting a new
store concept—the Pickup and Fuel concept—that offers same-day pickup for groceries ordered online, and on the back of news that Amazon is planning the launch of its own grocery-store pilot program.

About the Technology Deployed in Amazon Go

To be able to shop at Amazon Go, shoppers need to download and log-in to the Amazon Go app, which provides them with a QR code they scan when entering the store. Shoppers are then allowed to pick up and return items freely from the shelves. Amazon’s technology detects shoppers when they walk out of the store and charges their purchases to their Amazon account. There are no checkouts, cashiers or physical payments.

The main challenge: Recognition

The system needs to recognize the customer, the product, the action performed with the product (taking it from or putting it back on the shelf) and the fact of the customer leaving the store. This way Amazon Go can adequately register articles as they are added to or removed from the shopping cart and then charge the customer’s card with the correct amount.

Recognizing the customer

The mobile app generates a QR code; a customer scans it when they enter the store and is immediately registered. Once a customer enters the store and scans the QR code, the cameras take dozens of pictures from different angles. Then these images are indexed in the newly created collection.

Recognizing the actions

The next thing the Amazon Go store must be able to do is to understand what the customer does with the product. Does it add or remove the product from the customer’s virtual shopping cart? Does it charge the customer’s card with the correct amount?

The next big thing?

Amazon has an unprecedented opportunity to change the entire retail industry and take automation, and time and cost optimization to the next level.