Why Amazon's Store of the Future Will Be Delayed Indefinitely

Ooops. Not that it would be a good idea to bet against them. Eventually. JL

Jason Del Rey reports in Re/code:

It turns out the store’s technology can’t handle crowds. Amazon has run into problems tracking more than about 20 people in the store at one time, as well as the difficulty of keeping tabs on an item if it has been moved from its specific spot on the shelf.

When I asked Target’s chief information and digital officer about Amazon’s new store of the future in January, he smiled.

“I’m kind of skeptical,” the executive, Mike McNamara, said in an interview at an industry trade show that day.

Just a month earlier, Amazon had unveiled a video touting a new store in Seattle — called Amazon Go — with no cashiers and no checkout lines. In their place, a tech cocktail of cameras and sensors would work together to automatically bill customers on the way out.

But McNamara, who spent 17 years at the British grocer Tesco prior to Target, said the concept had been around for more than a decade.

“It’s 14 years later,” he said, “and we’re still probably 14 years away.”

Well, Amazon is still trying to get Store No. 1 right. Recode previously reported that the technology required help behind the scenes from humans, in cases where the computers weren’t sure about which item a person grabbed.

And, on Monday, the Wall Street Journal reported that the company won’t open the first store, in Seattle, by the end of this month like the company had originally planned. The store is currently only open to Amazon employees; Amazon has said it would open to the public in “early 2017.”

For now, it turns out the store’s technology can’t handle crowds.

Amazon has run into problems tracking more than about 20 people in the store at one time, as well as the difficulty of keeping tabs on an item if it has been moved from its specific spot on the shelf, according to the people.

It’s tempting to say that the delay is a stark reminder for Amazon of the challenges it will face expanding its expertise in online retail to physical retail. But it’s really more a reflection of the home-run swing Amazon is taking with the system it has developed for the Go store — something it has dubbed Just Walk Out Technology.

McNamara left open the possibility that Amazon could pull off the idea at a single location — “I’m quite happy for them to take the lead and, if it works, I’m quite happy to copy them” — but he said any serious rollout of the idea would be difficult and cost-prohibitive.

He’s not alone; several retail executives expressed similar skepticism to me in private conversations since the original December announcement.

If Amazon can get it working — yes, still a big “if” — it can be employed in all types of settings beyond just Go stores. Industry sources have speculated the tech could move to Amazon Books stores, of which there are currently five with five more on the way. There has also been speculation that Amazon could license the systems to other retailers.

But first, Amazon needs to get the initial store right. Until then, retailers can keep telling themselves something they haven’t been able to say about Amazon in a long time: “Told ya so.”