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News Roundup: Is Amazon Go Losing the Retail Race?

July 26, 2019 Updated: September 8, 2020

Amazon Go Shoppers Actually Spend Less, Raising Questions About Cashierless Model

A new report studying consumer purchases in Chicago, Seattle, San Francisco, and New York shows that shoppers only spend an average of $11 on each trip to Amazon Go and spend about double that amount at mainstream retailers like CVS, Walgreens, and Rite Aid. Shoppers spend even more at larger grocery stores like Kroger with each trip reaching an average of $45.

Experts are increasingly skeptical of how successful the Amazon Go model will be with one saying that it “offers all the selection of a 7-Eleven, but with more complexity and cost.” These reports are a powerful warning to retailers that are hastily trying to copy Amazon Go’s cashierless model could actually decrease sales and hurt your business.

New Poll: Small Businesses and Shoppers Say ‘No’ to Cashierless

A strong majority of American consumers (77 percent) don’t want a cashierless retail experience, saying they prefer to interact with other people at the checkout, according to a new survey. Small businesses are also preferred by a clear majority of shoppers (53 percent) who say they provide better customer service than larger businesses.

“From service to customer loyalty, small businesses are known for personalised experiences that will ultimately allow them to survive in the ever-increasingly competitive commerce segment,” said Steve Rowley, executive vice president of Cox Business. Even with the growth of Amazon, 71 percent of respondents said that they continue shopping small to support their local communities. Additionally, the Harvard Business Review recently studied what they call the “cashless reversal trend” with business large and small discovering that going cashless isn’t necessarily as good as they once thought.

Beyond Retail: Automation Also Faces Challenges in Driverless Cars

Entire companies, like Uber, have built their business models around the “inevitable” switch to driverless cars. But recent expert analysis shows that automating cars will likely be “harder, slower and costlier” than the companies thought. In part fueled by an accident in which an automated Uber killed a woman in Tempe, the new reality has resulted in companies that are now much more reluctant to commit to timelines. The only successful solution so far? Having them operate at very slow speeds and on fixed routes – like a very slow train.

Number of the Week: $3.3 Billion

That’s how much retailers lose to self-checkout shoplifting and other types of theft in Australia and New Zealand every year, according to a new report. One expert said that the expansion of self-checkout at many retailers has “bred a ‘new type’ of thief: customers who would usually never entertain the idea of stealing but do so due to the ‘psychological difference’ of interacting with a machine rather than a human. Customers interviewed who stole from self checkouts say it happened accidentally the first time, and after that, it became easier and easier.

Any upcoming stories about the impact of automation on the retail industry and the economy?

If you’re interested in speaking with UFCW, email awhite@www.ufcw.org for a quote, statistics, or interviews with workers in retail and other sectors of the economy.

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