Five years ago Amazon started working on a secret project: how to eliminate the checkout line in stores. Amazon executives reasoned that most other aspects of physical shopping had been pretty much perfected, except for one thing – nobody likes waiting in line.
The result of that project is Amazon Go, a futuristic convenience store in which shoppers are tracked by hundreds of cameras on the ceiling and a computer algorithm that analyses their every gesture, and then tallies up their receipt when they exit. Amazon calls this “just walk out” shopping, because there is no checkout counter and no checkout line, just a few turnstiles like those on the underground.
The store, which has been in testing since December 2016 and opens to the public on Monday, represents Amazon’s most provocative effort yet to reshape the future of brick-and-mortar retail.
Located in a ground-floor retail spot at the centre of Amazon’s campus in Seattle, the shop has posters in its windows advertising the “just walk out” shopping experience. To underscore the point, each receipt comes with a “trip timer” so shoppers see exactly how many seconds it took to grab their goods. The items for sale are similar to what might be found in a deli or a corner store, with an in-store kitchen that prepares fresh sandwiches and salads.
Although it was founded as an online-only bookstore, Amazon’s aggressive push into physical retail has surprised – and alarmed – many of its retail competitors. The company now operates 13 brick-and-mortar bookstores, several grocery pick-up points and, since its $13.7bn acquisition last year, hundreds of Whole Foods stores across the US.
However the complexity of the Amazon Go store’s design means that it is more of an experimental concept at the moment, rather than a mature technology that can be easily and cheaply replicated. The store was initially supposed to open to the public in the spring of 2017 but was delayed until this month amid reports it was not quite working as expected.
Five years ago we said: can we push the boundaries of computer vision and machine learning to create this effortless experience for customers to come in, take what they want, and leave? – Dilip Kumar, Amazon
Dilip Kumar, who oversees the technology behind the Amazon Go store, explains that the store uses computer vision – the ceiling is dotted with hundred of video cameras – to determine what shoppers are picking out.
“Five years ago when we started this, we said: can we push the boundaries of computer vision and machine learning to create this effortless experience for customers to come in, take what they want, and leave?” he says.
Mr Kumar points to the cameras that nearly blanket the ceiling, and explains that the computer algorithm uses these to determine which customer is taking which products. There are also weight sensors on the store shelves, but these are less useful because different items can have the same weight, such as different flavours of yoghurt.
“The holy grail is video understanding,” he says. “To be able to understand and interpret and know exactly what is happening. Doing this at scale and getting transaction-level accuracy is what makes this challenging.”To help facilitate identification, certain items in the store such as sandwiches also have a special dot code on top, similar to a bar code but designed with circles and diamonds that make it easier for a camera to read from a distance
He explains that one of the most difficult things for the algorithm to master is when the store gets crowded. “It is much more convoluted when you have 50 people picking up multiple items or browsing,” he says. “They are occluded, they occlude each other, items are getting occluded, and the items are small.”
Over the past year, the tech team has been improving the algorithm so that it is trained to handle these scenarios, including when customers might partially cover an item with their hand when they take it from the shelf.
$800 billion – size of the US grocery business
To help facilitate identification, certain items in the store such as sandwiches also have a special dot code on top, similar to a bar code but designed with circles and diamonds that make it easier for a camera to read from a distance.
While Mr Kumar vowed that the technology was “very, very accurate”, he declined to specify when the company might open other Amazon Go stores. “We’d love to build more,” he said, without elaborating.
Mr Kumar also said the company has “no plans” to introduce its checkout-free shopping in any Whole Foods stores, nor in the Amazon bookstores.
Nevertheless, in the year since Amazon first unveiled plans to reinvent the grocery store with Amazon Go, rivals have raced to invest in similar technologies as they battle for market share of the $800bn US grocery business.
Plans have ratcheted up since Amazon acquired Whole Foods last summer. In the ensuing months bankers have worked closely with their brick-and-mortar clients to help them come up with a tech-centric defence to the threat.
Some of those moves are already materialising as Kroger, the largest standalone US grocery chain, is rolling out its own take on the cashier-free experience this year. Visitors to a Kroger supermarket will be able to scan the barcodes of food on their smartphone as they walk through the aisles, and pay at a self-checkout machine upon leaving the store. The company says it will roll this technology out to 400 of its more than 2,700 stores in 2018.
Walmart, which derives more than half of its nearly $500bn annual sales from food, is testing a grocery shopping experience without cashiers in places including Dallas and Orlando. The company says that by the end of this month, 100 of its supermarkets will allow customers to buy groceries through a smartphone app – only interacting with a human when they show their digital receipt to an employee before walking out the door.
Doug McMillon, chief executive of Walmart, has referred to himself as a “gadget-guy” and promised to mould Walmart into more of a tech company since he took the helm in 2014. At a conference last week, he boiled down the challenge, and the impetus, for retailers’ race to cut the queues.
Amazon Go: a new kind of store
Scan to enter: Shoppers enter the store using a smartphone app to scan a code that is linked to their Amazon account. If a family is shopping together, they can all scan in on the same code.
Pick up what you want: Merchandise is spaced out along shelves that have weight sensors and plastic dividers to keep the items distinct. Some, like the sandwich pictured above, have a dot code for easy camera identification.
You are being watched: Hundreds of cameras hang from the ceiling of the store, constantly monitoring shoppers’ actions and recording which items a shopper selects.
Just walk out: When finished, shoppers simply exit the store. There is no need for them to use their smartphone again or scan anything. A receipt for their purchases will appear in the app.
– Copyright The Financial Times Limited 2018
Trade mission seeks to calm concerns about forestry downturn
Forests Minister Doug Donaldson says he’s in Asia trying to calm investor concerns about reduced supplies of British Columbia timber for major residential developments and tourism-resort projects in China and Japan.
Donaldson, in a teleconference from Tokyo, says he and 35 senior executives from B.C. forest companies and associations are on a five-day trade mission to Asia that concludes Friday.
He says the Chinese and Japanese are keenly aware of the toll pine beetle infestations and massive wildfires have taken on B.C.’s forests, but business leaders and forests ministry officials are reassuring potential customers the province has abundant supplies of timber.
The Opposition Liberals recently released a document detailing ongoing forest industry struggles, listing almost 60 examples where companies have implemented cost-cutting measures that range from harvest reductions to permanent mill closures.
The detention of top Huawei executive Meng Wanzhou in Canada prompted the minister to postpone his planned participation on a forestry trade mission to China last December.
Donaldson says this week’s trade talks in Japan and China focused only on business.
Union representing SkyTrain workers considers possible strike action
CUPE Local 7000, the union representing 900 SkyTrain workers, says negotiations with the BC Rapid Transit Company (SkyTrain) have reached a deadlock.
CUPE Local 7000 says that there have been more than 40 sessions at the bargaining table since the beginning of May, and that talks broke down Tuesday, Nov. 12. It says that both sides were unable to reach an agreement on several key issues.
“The Company has failed to offer fair wages or address the sick plan, inadequate staffing levels, forced overtime, and other issues important to our members,” said CUPE 7000 President Tony Rebelo.
“We have been more than proactive and flexible in trying to reach solutions to improve the service, but the employer’s latest package failed to address the key issues. They are simply not interested in bargaining seriously, so we’re left with little choice but to go to our members and seek direction for next steps.”
CUPE 7000 represents approximately 900 SkyTrain workers who provide service as SkyTrain attendants and control operators as well as administration, maintenance, and technical staff.
Vancouver Is Awesome reached out to TransLink for comment and will update the story when they have provided comment.
U of T names Michael Sabia director of the Munk School of Global Affairs & Public Policy
Michael Sabia, one of the country’s most accomplished leaders in business, investment and public policy, has been named the new director of the University of Toronto’s Munk School of Global Affairs & Public Policy.
The university’s Agenda Committee of Academic Board recently approved the appointment of Sabia, who is currently CEO of pension fund Caisse de dépôt et placement du Québec (CDPQ), which has more than $325 billion of assets invested globally, for a five-year term beginning Feb. 1, 2020.
A U of T alumnus, Sabia will draw on his considerable experience in both the public and private sectors – he once ran Canada’s biggest telecom and helped privatize its largest railway – to help realize the Munk School’s growing ambitions in Canada and on the global stage.
“CDPQ is now a global financial institution with investments around the world. Over the last decade, we have had to navigate through an increasingly complex and turbulent geopolitical scene,” Sabia said.
“With the lessons learned and the global relationships built, I am looking forward to working with the scholars, students and staff at the Munk School to continue building an institution engaged in the world and widely admired around the globe for the quality of its ideas and its practical solutions to the issues facing us all.”
The Munk School, created through a merger last year of the Munk School of Global Affairs and the School of Public Policy & Governance, is a leading hub for interdisciplinary research, teaching and public engagement that houses world-class researchers and more than 50 academic centres, labs and programs.
It’s also home to 20 teaching programs, including Munk One – a first-year foundational program that focuses on global problem-solving.
Sabia will take over the role of director of the Munk School from Professor Randall Hansen, who is currently serving as interim director.
“I’m delighted to welcome Michael Sabia back to the university as the Munk School’s new director,” said President Meric Gertler. “Throughout his career, he has made significant contributions to public policy, to business and to the world of investment. I know he will bring the same kind of engaged thought leadership to the school.
“I would also like to thank Professor Hansen for his excellent leadership and guidance at the school. His work has helped set the stage for future success.”
Sabia, who earned a bachelor’s degree in political economy from U of T before completing two graduate degrees at Yale University, took over the role of chief executive at CDPQ in 2009 and proceeded to build the organization into a global financial institution with more than $325 billion in assets under management.
He also oversaw the implementation of a new investment strategy that made CDPQ an internationally recognized leader among investors working to address climate change, develop urban infrastructure and forge global industry partnerships.
Before that, Sabia held several senior positions at Bell Canada parent BCE Inc., including the role of CEO from 2002 to 2008 when he led a strategic transformation of the telecommunications giant. He also served as chief financial officer at Canadian National Railway, where he worked with then-CEO Paul Tellier to successfully launch CN as a publicly traded corporation through what was then the largest-ever initial public offering in Canadian history.
Sabia spent several years in the public service prior to entering the corporate world. He was director general of tax policy in the federal department of finance, where he was one of the architects of a comprehensive reform of Canada’s tax system, and served as deputy secretary in the Privy Council Office.
More recently, Sabia served on Finance Minister Bill Morneau’s advisory council on economic growth. He is currently co-chair of the G7 Investor Leadership Network on Climate Change, Diversity and Infrastructure Development, as well as co-chair of long-term investment, infrastructure and development for the World Economic Forum.
In addition, Sabia is a trustee of the Foreign Policy Association of New York and a member of the Asia-Pacific Foundation of Canada’s Asia Business Leaders Advisory Council. He was named an Officer of the Order of Canada two years ago, and has received an award from the non-profit Public Policy Forum for his many contributions to public policy in Canada.
President Gertler said Faculty of Arts & Science Dean Melanie Woodin, Vice-President and Provost Cheryl Regehr and he have asked Sabia “to lead a consultative process within the university to determine whether establishing the Munk School as a free-standing faculty would be a constructive step forward.”
“I’m immensely proud of everything that has been accomplished at the Munk School so far,” President Gertler said.
“With the invaluable financial and ongoing commitment of the Munk family and other generous donors, and with the dedication of the school’s first-class faculty and staff, I am confident of our continued success.”
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