Amazon Go: Disrupting retail?

Abstract

In January of 2018, AMAZON.COM Inc. (Amazon) opened its first self-service Amazon Go convenience store in Seattle, Washington. Armed only with a smartphone app tied to a credit card, a customer could enter the store, select merchandise from the aisles and refrigeration cases, and just walk out—no lines, no waiting, no cashier. A can of coke, chocolate bar, or chicken sandwich placed in a shopper’s bag, is identified, accounted for, and charged to a payment card, all facilitated by computer vision, deep learning, and sensor-based information technologies (IT). Based on extensive public sources, the Amazon Go case provides a rich opportunity to explore an IT-enabled startup that potentially threatens three industries: convenience stores, grocery stores, and fast food outlets. In the future, the technology, either by licensing or expansion by Amazon, arguably could disrupt the broader retail industry and its millions of employees. Students have an opportunity to explore the boundary between IT and business strategy, while seeing the potential economic implications of fixed cost investments in IT. They will see how one company, Amazon, strategically develops, deploys, and extends its growing arsenal of IT weapons. The case also catalyzes discussions of social issues, including the impact of technology on employment and the tradeoffs between personal privacy and customer service.