The next Amazon Go? Albertsons plans a checkout-free future

Following the path paved by the checkout-free Amazon Go concept, the newly merged Albertsons and Rite Aid are developing their own technologies for faster and more efficient checkouts.

The cashierless Amazon Go store is barely more than an experiment — it's live in only one location in Seattle, with plans for a handful of stores to follow this year — but it has already sparked a race to put similar models in place. This competitive trend is particularly heated among grocery stores, where Amazon competes directly through its ownership of Whole Foods and AmazonFresh.

Albertsons unveiled its plans for an Amazon Go-style store during a presentation to analysts last month. The store's cashierless checkout system will support a limited set of products such as Albertsons' meal kit line, Plated, said Shane Sampson, chief marketing and merchandising officer. The system will be supported by an app for mobile checkouts as well.

“We’re experimenting with Amazon Go-like technology today, where for example someone could go in and pick up a Plated order, it would know that you’re in the store, it would tender and order and you can leave outside of the check stand,” said Sampson.

In broad strokes, this is very close to Amazon's model, which uses a mobile app to determine which customers are in its store and automatically charge their default payment card for any products they walk out with. Amazon uses cameras and other sensors to detect which items are being removed from its stores, and by whom. Customers have a chance to review their purchases after the fact correct any mistakes in how they were charged.

As impressive a concept as this is, it's also delicate. The first — and so far only — Amazon Go store in Seattle was reportedly delayed due to problems with handling large crowds. Even after it opened, the store required customers to line up outside, limiting the number of people the store would have to track at any given time. Amazon plans its next Go store locations in Chicago and San Francisco, according to The Seattle Times.

“For Amazon Go, the aspiration is to completely transform the customer experience and you don’t want to be left holding the bag in that sort of scenario,” said financial analyst and President of AZ Payments Richard Oglesby.

Since Amazon Go is not yet available on a broad scale, there is not a competitive gap at this stage, Oglesby said. However, it is obviously something that is happening in the market, and Albertsons’ and other retailers are going to need to be prepared to meet any customer expectations Amazon sets, he said.

Ultimately, a checkout-free store design is meant to speed up the entire shopping experience, and thus would have the biggest effect in the stores that have the most traffic.

Doing checkouts this way will not save money in the short term, Oglesby said. It is a big upfront investment in technology infrastructure that will take years to recoup. There’s also a risk that customers will resist the new process.

“Overall, technology in in-store shopping has to become much more advanced for the simple reason being that, competitively speaking, it’s so much easier for someone to log online and buy stuff online than it is to actually get in a car and or walk into a store,” Oglesby said.

During the presentation Albertsons revealed other technologies it is in the midst of developing, including a mobile app which would allow a customer to buy and pay for fuel automatically at corresponding gas stations. It is in the process of patenting this technology.