Amazon's futuristic, cashierless stores could be the company's 'Trojan horse' to take over traditional retail

  • Amazon Go is Amazon's futuristic store that uses cameras and sensors to charge customers for what they take from shelves.
  • Loup Ventures' Andrew Murphy thinks that Amazon will license the tech for other stores.
  • In this way, Amazon would have a "Trojan horse" into traditional brick-and-mortar retail.

Amazon may be going in another direction with its "just-walk-out" technology.

According to a new bit of analysis from Loup Ventures' Andrew Murphy, Amazon could leverage the technology in Amazon Go — the company's futuristic store that uses sensors, not cashiers, to correctly charge customers for what they take — in a different way than anticipated.

7 shock-worthy facts about Amazon:

7 shock-worthy facts about Amazon
See Gallery
7 shock-worthy facts about Amazon
7.5 percent of Seattle's working-age population are Amazon employees

Amazon has more than 300,000 employees worldwide, and 40,000 in Seattle alone.

As a portion of the city's working-age population — roughly 528,000 — that comes out to 7.5% of the city working at Amazon.

For perspective, if the same portion of New York City's adults worked for one company, that company would have about 488,000 locals on staff.

Amazon accounts for 43% of all online sales

Amazon used to be a way to buy books online; today, it's the default buying site for just about everything, especially for people who have Amazon Prime.

An analysis by Slice Intelligence released in February found that 43% of all US online retail sales were done through Amazon in 2016.

That's up from 33% in 2015 and 25% in 2012.

1 out of every 4 US adults has Amazon Prime.

Speaking of Amazon Prime, the company now counts approximately 63 million people among its subscriber base, or about 25% of the total US adult population.

That number may underestimate the true coverage, however, since it doesn't account for multiple adults in one household all sharing the same Prime account.

Amazon ships 1.6 million packages a day

Amazon fulfillment is a beast of its own.

A report from 2013 (the latest year for which data are available) found Amazon shipped 608 million packages that year, or 1.6 million packages a day.

As of 2015, Amazon estimated its fulfillment centers were within 20 miles of 31% of the US population, and within 20 miles of 50-65% of its core, same-day-accessible market.

That's enough cardboard to span all of West Virginia

A back-of-the-envelope calculation reveals all those packages (not including padded envelopes) yield roughly 26,400 square miles of cardboard.

The total land area of West Virginia, meanwhile, is just north of 24,000 square miles.

Given the speed of Amazon's shipments, the company could blanket the whole US in cardboard in about five months.

45,000 robots roam the floors of Amazon's warehouses

To help those shipments leave the warehouses on time, Amazon relies on a growing fleet of autonomous robots that fetch packages from their shelves and bring them to human employees.

The 45,000 robots live across 20 fulfillment centers in the US. In 2016, the company increased the fleet 50% from its prior head count of 30,000.

Amazon is more valuable than all major brick-and-mortar retailers combined

The sum total of those investments in infrastructure and supply chain management have made Amazon by far the most valuable retailer in the United States.

Amazon's $356 billion valuation is so big, it's larger than Wal-Mart, Target, Best Buy, Macy's, Kohl's, JCPenney, and Sears combined.

With the recent acquisition of Whole Foods, there are no signs the retailer has any plans of slowing down.


Instead of simply opening more Amazon Go stores, he thinks the company will instead license the technology to other retailers, which would give Amazon a "Trojan horse into the brick and mortar retail space."

In this way, it would be similar to the infrastructure Amazon built with its cloud-computing platform, AWS, and its third-party marketplace offering, Fulfillment by Amazon.

Amazon is clearly interested in moving into the brick-and-mortar space, and the technology in Amazon Go could be "a turnkey solution for automated retail," Murphy said.

This probably doesn't mean you're going to see the tech in general merchandise competitors like Walmart or Target, but specialty retailers, like Nike, that already sell their goods on Amazon could look to add it to their growing retail presence. It could save on labor costs, or ensure workers focus on customer service instead of rote jobs like cashing out customers.

The race to automate cashiers' jobs as Amazon Go does has the company in the "pole position" to cash in on what Murphy says is a $50 billion opportunity for retailers.

The technology could be a strong driver to bring more brands into the fold as the company courts more and higher-end brands to work with.

Amazon partnered with Calvin Klein over the holidays, using its Echo smart speakers in fitting rooms to answer customers' questions or change the lighting. More collaborations could be possible as Amazon's tech offering convinces more brands to work with it.

A recent report from Recode said Amazon is opening additional Amazon Go stores in Seattle and Los Angeles, with more stores potentially in the works. 

NOW WATCH: The rise and fall of Hooters Air — the airline that lost the 'breastaurant' $40 million

See Also:

SEE ALSO: Amazon is quietly coming after dollar stores — and it's a brilliant move

Read Full Story