This image on the right may become a thing of the past if Amazon has their way! But first, I must digress…

For those who have listened to my podcast or read my blog, you probably know about the first stock I purchased in the fall of 1989. I took a few hundred dollars from my first paycheck and walked on down to the Quick and Reilly brokerage office in Boston and set up an account (the concept of online trading still about five years away). Thirty minutes later, I had my 100 shares of a company called CheckRobot in my account (and the riches were going to flow). Their innovation: automated checkout lines. Customers would skip the checkout line and be able to scan their own items and take their groceries and their receipt and pay at a centralized pay station. Customers would love it, companies would love the labor-saving aspect of it (one clerk for 5 checkout lines) and orders would flow in…well that’s not how it happened. Adoption was slow to non-existent, the company ran low on funds and was forced into a merger where shareholders got very little:( I got a valuable lesson in risk.

Fast forward 28 years and big change is coming to the grocery industry and it involves the checkout line (or absence of one). Here’s the headline “Amazon unveils plans for grocery shop with no checkouts.” No checkouts? How is that going to work:

Amazon has revealed plans for a grocery shop without a checkout process, where customers will instead pay for the goods they have selected via an app. The Just Walk Out shopping experience uses the same types of technologies found in self-driving cars.The system detects when items are taken or returned to shelves and tracks them in a virtual shopping trolley. Once the shopper leaves the store, their Amazon account will be charged and receipt sent to them. The first shop is expected to open to the public in Seattle in the US in early 2017.

As one analyst noted, this industry is ripe for innovation with little to no change in the checkout process (despite the best efforts of CheckRobot!):

“Despite significant investment in store technology, the checkout experience has been largely ignored,” said Ms Berg. “Retailers have made a lot of progress on mobile payments as a standalone option; however, very few have been successful in moving towards a comprehensive mobile wallet and thereby addressing the problem of long queues. This is where Amazon comes in.”

_______

Questions:

• How will Amazon avoid setting up checkout lines in the store?
• Would you be comfortable with this technology?
• How do you think it would change your shopping behavior?
• What do you think are other implications of this technology? How many people might lose their jobs in the supermarket?
• Amazon has been an online only retailer and offers online grocery ordering too. Why do you think they are testing a store format for groceries?
• Do you think this strategy will work?

________

For additional reading:

• Quartz: Amazon’s foray into supermarkets is a primer for grocery disruption
• Reuters: Amazon opens line-free grocery store in challenge to supermarkets

______

On the subject of food, be sure to check out one of more popular activities in our curriculum: Research Your Monthly Food Budget!

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.