Inside Amazon’s robot-run supermarket that needs just 3 human workers
Inside Amazon’s robot-run supermarket that needs just 3
human workers
By Josh Kosman February 5, 2017 | 11:07pm | Updated
Amazon's Jeff Bezos is harnessing robotics to make
science fiction-like supermarkets a reality, according to sources. Illustration
by New York Post
If you’re a robot stealing somebody’s job, it’s best to
stay hidden.
That’s what Amazon CEO Jeff Bezos appears to be thinking,
as his Seattle-based web giant has contemplated a two-story, automated grocery
store in which a staff of robots on the floor upstairs grabs and bags items for
shoppers below.
The ground level of the futuristic prototype — a
supermarket-sized version of its recently unveiled “Amazon Go” convenience
store, with a bigger layout that could span anywhere between 10,000 and 40,000
square feet — would be devoted to goods that shoppers typically like to touch,
sources briefed on the plans told The Post.
Those could include as many as 4,000 items, spanning
fresh fruits and vegetables, eggs, meats and cheeses, and grab-it-and-go stuff
like beer and wine, the sources said. Pharmacies might also might spring up at
some of the high-tech locations, as Amazon looks to break into the lucrative
sector, insiders said.
But for many, the most striking feature of the bigger
stores is that they could operate with as few as three employees at a time.
Sources said the plans call for staff to max out at 10 workers per location
during any given shift.
“Amazon will utilize technology to minimize labor,” a
source close to the situation told The Post.
Job-cutting technology isn’t new for Amazon, which has
increasingly used robots to automate its distribution warehouses. More
recently, it has been pioneering the use of drones to deliver packages instead
of humans, and even filing patents for unmanned blimps that would serve as
flying warehouses.
In the case of Amazon’s automated retail prototype, a
half-dozen workers could staff an average location. A manager’s duties would
include signing up customers for the “Amazon Fresh” grocery service. Another
worker would restock shelves, and still another two would be stationed at
“drive-thru” windows for customers picking up their groceries, fast-food style.
The last pair would work upstairs, helping the robots bag
groceries to be sent down to customers on “dumbwaiter”-like conveyors, a source
said.
With the bare-bones payroll, the boost to profits could
be huge. Indeed, the prototype being discussed calls for operating profit
margins north of 20 percent. That compares with an industry average of just 1.7
percent, according to the Food Marketing Institute.
Labor accounts for the lion’s share of a supermarket’s
operating costs. In 2015, the industry employed 3.4 million workers nationwide,
with an average grocery store employing 89 workers to generate annual sales of
more than $2 million, according to the trade group.
Amazon’s prototype, meanwhile, doesn’t call for any
cashiers. It might, however, employ “greeters” that could serve as curbs
against shoplifting — a key hazard for thinly staffed stores — in addition to
using high-tech motion sensors to track wayward goods.
“Shoplifting is a touchy subject for Amazon,” the source
said, noting that Amazon may decide to bar its stores from shoppers who aren’t
members of its “Prime” and “Prime Fresh” services, which carry annual fees.
“In the view of Amazon, people who can afford Prime
memberships aren’t likely to shoplift,” the source said. “If someone walks in
off the street, they’ll be able to access the stores, but they’ll have to sign
up for a membership which means showing an ID.”
Elsewhere, the two-story design could boost earnings by
slashing real-estate costs. The setup could eliminate at least half the aisles
that account for a supermarket’s sprawl, with robots upstairs picking through
between 15,000 and 20,000 staple items like breakfast cereal, spaghetti sauce,
paper towels and soda.
Sources cautioned that the prototype is still in the
early stages, and that it hasn’t received a final nod. Reached Sunday, Amazon
officials denied the company was planning a robot-driven supermarket chain.
“As we’ve said previously, it’s not correct,” an Amazon
spokesman told The Post. “We have no plans to build such a store.”
In December, the Wall Street Journal reported that Amazon
envisions opening as many as 2,000 brick-and-mortar grocery stores across
various formats — a number the company disputed.
Nevertheless, a source said the 2,000-store, nationwide
goal has been a real one inside the company, with execs eyeing a gradual
rollout to gauge demand for the new concepts. A larger-prototype store could
open as soon as late 2017, according to the source.
The plans have already been telegraphed by Amazon
consultant Brittain Ladd in a published paper, “A Beautiful Way to Save
Woolworths,” according to a source close to the company.
The smaller Amazon Go format, which spans just 1,800
square feet, has been opened at a single location in Seattle.
As with Amazon Go, customers at the larger stores —
targeted for the suburbs — could use an app on their phones to track items
they’ve picked off shelves for purchase, with the app automatically recording
what they’ve grabbed with the help of electronic sensors, sources said.
“The products stocked within the store will be retrieved
by an automated storage/retrieval system that I designed,” Ladd says in the
paper.
“Based on my analysis, I was able to achieve margins of
between 22 percent to 40 percent depending on the size and configuration of the
multi-format store design and merchandising assortment. Such margins are
unheard of even in the best-managed grocery retailers operating today,” Ladd
wrote.
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