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Amazon Go: A Disruptive Supermarket powered by Artificial Intelligence

If you are in the retail business in the developed world, specifically in food and grocery and haven’t heard of Amazon Go yet, then you are likely to be out of business within a decade! Unfortunately, this isn’t a bad joke either.

I will try to elaborate on the significance of Amazon Go from a large datacentre perspective (aka Warehouse Scale Computer). A WSC is simply a massive datacentre, comprising some 45 thousands servers on average. Counter-intuitively, WSCs are much cheaper to operate compared to smaller datacentres that comprise a few thousands servers. How is this possible!? It is possible thanks to high degree of automation that cuts down manpower cost by over 90% (some WSCs require less than 10 operators per shift). Amazon is exceptionally good at this and have perfected this mode of operation in their famous AWS platform over many years.

By using state-of-the-art checkout-free system in their upcoming supermarket, which is made possible by advance Machine Learning and AI, Amazon can lower operating cost to a ridiculous degree. This means Amazon can sell the same product at a lower price while still remain profitable. Here in the UK for example, ASDA is likely to close down soon because their strongest competitive advantage (unbeatable price) turned out to be their biggest threat as they slid below their breakeven point.

I am not suggesting that retailers should implement checkout-free system like Go (unless Amazon decides to license it for lots of £$€ and the Go turned out to be a provocation). Amazon is already a leading AI company and took their time to develop and perfect the system. You simply stand no chance. What I suggest is to start using Machine Learning and Artificial Intelligence to optimize existing business processes to save cost and increase efficiency beyond whatever ERP you might already have in place. Controlling inventory level can be a good start