At Amazon’s new grocery store, there is no need to wait in line, no need for check outs. A shopper just grabs the product and simply walks out the door. Providing the shopping culture a whole new platform, the Amazon Go innovation is encouraging South Korea to accelerate its cultivation of a smarter Omni-channel system as well. Worried about what to wear for the weekend’s wedding? Use smart devices to pick out a nice blouse and have it delivered to the nearest convenience store.
Omni-channel, a new shopping mechanism, provides consumers with a constructive shopping experience with a variety of channels such as online stores, mobile app stores, kiosk machines as well as self-service stations. With this emerging trend, Amazon, an electronic and cloud computing company in the United States (U.S.), is opening a whole new chapter of the retailing industry. Its newly built grocery store, Amazon Go, is an attention grabber as the next hot spot.
What is special about this offline store is that there are no cashiers, so customers never have to wait in line or check out products; they can just walk out the store. The secret behind it is the highly advanced shopping technology called Just Walk Out, adopting a similar system to that of self-driving cars. It automatically detects and sensors items being taken or returned to the shelves in the store. It then keeps track of them until they are checked out and paid for through the customer’s online account, as he or she leaves the shop.
On Frequently Asked Questions (FAQ) on the official Amazon Go website, Amazon explains how they came up with the innovative shopping technology. It is written that they have asked themselves a question four years ago—what it would be like to “create a shopping experience with no lines and no check outs,”—and to this, everything gradually came to be the answer. The first store is located in Seattle, while Amazon plans to open more branches throughout the U.S.
Meanwhile, Shin Dong-bin, the CEO of Lotte Group in South Korea, introduced the Amazon Go store to his aggregation on December 15, 2016—claiming that Lotte is to follow in its footsteps. With its high speed Internet access and increasing use of mobile devices, “Korea is a good match competitor to the U.S.,” Shin said. He is showing a strong enthusiasm toward strengthening the Omni-channel market which will bring sweeping changes to South Korea’s retail sector.
Over the last decade, in fact, South Korea has proven its growth potential in advanced Information and Communication Technolog y (ICT) which now widens the realm of retail industry. Self-checkout counters in hypermarkets and drive-through services are rapidly growing in number. In October 2015, Lotte launched the Smart Shopper service in one of its department stores in Bundang. The purpose of the technology is to save its customers the energy of carrying around shopping baskets and carts. They would walk around the shop and simply scan the barcodes of the products with their smart phones. Then within hours, the products would be at their doors.
Additionally, in 2014, K SHOP, a conference and an exhibition of Omnichannel market, was held in South Korea. It introduced the shifting trends and newest technologies that are transforming the landscape of Korea’s retail market. It was held as a battleground for the growing showroomers. The term showroomer refers to consumers who examine merchandise at offline markets and then make purchases through online shops. With customers turning offline shops into mere showrooms, retailers had to come up with a counterplan to save their businesses.
The Omni-channel strategy was successful in tearing down the wall between online and offline shops, multilaterally connecting them to create one huge shopping mecca. It proposed a win-win situation for both online and offline markets, having accomplished a combination of the originally two separate institutions.
Despite the overwhelming advancement and maximum convenience the new shopping technology provides consumers, predicting its long-term implications still remains as a task. The concern of machines becoming capable of taking over human jobs is a rising social fear. Back to the case of the U.S., as much as the Amazon Go is predicted to save an immense amount of consumers’ time waiting in line—by 36 percent of about 37 billion hours per year—retail laborers are in great danger of losing their jobs. Self-checkout essentially means that there will be a substantial cut in cashier jobs eventually, if not right away.
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Martin Ford, author of Rise of the Robots: Technology and the Threat of a Jobless Future (2015), shared his opinion with CNBC on December 10, 2016. He said that what Amazon had brought on the table is disruptive and unstoppable. “What it leads to is more job destruction, and less job creation, especially for average typical people that don’t necessarily have PhDs from MIT,” Ford criticized. His concerns evolve around the forthcoming mass unemployment of the non-college educated Americans, who take up most in the retail labor market. Some critics also point out that while bolstering the middle class, the emergence of the technology would lead to growing inequality and will kill massive amount of jobs, slowly.
However, experts’ views on the issue vary respectively. Professor Anindya Ghose (Technology and Marketing, NYU Stern School of Business) said that as much as there will be a job loss due to the employment cut-down of offline markets, the retail industry overall is looking at a huge growth. “The marriage between technology and the digital retail experience will redefine jobs in retail, which is the largest growing industry for millennials,” he explained. Professor Ghose also added that as retailers look to create engaging contents, “jobs like software engineers, developers, marketing analysts, data scientists and social media teams will be in high demand.”
The positive side is that while inevitably losing some of the old jobs, the industry is generating new career fields, albeit ones that will require degrees. Along with the speeding social shift, there will be a collective desire for a new social system which would secure the occupations of the former retail laborers. The ultimate question in a world whose population increases by the second is; are we blazing trails at the risk of burning bridges?