How Technology is Shifting the Concept of Retail Loss

The opening of the new Amazon Go store in Seattle has brought a lot of questions about retail’s future. In the shop, which boasts no lines and no checkouts, customers simply pick up the goods they want and walk out. Shoppers scan their phones upon entry, and cameras and sensors placed throughout the stores keep track of what a person buys. Upon exiting, they are presented with a receipt inside their phone and the funds are automatically deducted from their account.

One of the biggest questions for many is how the area of shrink will be handled in this type of store. Damage, theft and other mistakes that impact retail inventories cost retailers almost $49 billion a year, and many are wondering how this will change as retailers try new approaches.

When a shopper recently discovered she hadn’t been charged for some vanilla yogurt at the Amazon Go store, she questioned whether she had technically shoplifted. Amazon Go executives say that it happens very rarely and appear generally unconcerned about it.

Gaming the System

However, it must be a consideration at least on some level as the store goes to such great lengths to track customers’ movements. While walking out with items is, for all intents and purposes, the whole point of the store, what happens when someone finds a way to somehow cheat the system?

It’s an interesting question. While traditional retail stores often have to deal with lost revenue from people or even employees slipping items into their pockets, for example, the culprit is now shifting from customers to technology. This can be seen, for example, when ride sharing apps don’t charge riders the full fare or warehouse workers accidentally send an extra item to someone. While it’s not the shopper’s fault, the retailer will still suffer losses.

Supermarkets like Amazon Go make for good targets because they are big and chaotic. If someone could find a way to avoid being charged for items – say, by encasing them in some sort of sleeve that prevents the Amazon systems from charging for them – there is a great potential for loss here.

This blog post was based off of an article from The Washington Post. View the original here.

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