case study amazon go

Airport Biometrics: A Primer (2021)

Chapter: appendix a - case study: amazon go cashierless retail experience.

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135   Summary Initiated by Amazon, the Amazon Go retail experience (see Figure A-1 and Figure A-2) uses a combination of cameras, sensors, computer vision techniques, machine learning, and artificial intelligence to create a cashierless retail experience; the first airport location will be at Newark Liberty Inter national Airport (EWR) (Amazon Go 2020). This technology, called “Just Walk Out,” requires customers to identify themselves when they enter the store (Amazon 2020). The customer’s identity is verified either by scanning the Amazon Go mobile app (in the case of an Amazon Go store) or their credit card (for other retailers equipped with the Just Walk Out technology). A biometric variant also exists, where instead of a QR code or credit card, customers enroll at the storefront enrollment kiosk by scanning their 3D hand palm biometric and linking that to their account. The Just Walk Out technology leverages computer vision and machine learning to distinguish between customers and the items picked out and added to their virtual cart. The system does not rely on facial recognition but relies on movement tracking. Each customer is associated with a name, an account, and a consumer profile that reflects all interactions with items on the shelves (which items are stared at, picked up, or bought). Future use of the customer’s data is still undefined. However, the initial patent application included some examples where the customer’s purchase history could be used to confirm which items were picked by the user. The main benefits are significant time savings for customers and financial savings for retailers (reduced to no cashiering cost) (Bishop 2020b). The system architecture relies on Amazon’s A P P E N D I X A Case Study: Amazon Go Cashierless Retail Experience Source: Adapted from Amazon Go 2020. Figure A-1. Amazon Go shopping experience.

136 Airport Biometrics: A Primer What? ● Cashierless retail technology ● Project implemented by Amazon Where? ● 26 Amazon Go stores across the United States (e.g., Chicago, New York, Seattle, San Francisco) ● Deployment at a few airports across the United States in stores of retail chain OTG (On-the-Go), including at EWR (OTG Management 2020) Customer process steps ● To access Amazon Go stores: – Create an Amazon account – Download Amazon Go app – The Amazon Go mobile app interface will generate a QR code, or the user may add a hand palm scan to the account at an enrollment kiosk. – Customer enters the store by scanning the QR or hand palm (or credit card for other retail stores with Just Walk Out technology) – Just Walk Out technology tracks the customer and the interaction with store items. – Virtual cart validation – Exit Who? ● Amazon patented the Just Walk Out technology. It provides the hardware (camera and sensors) along with the software. Why? ● Amazon’s goal is to create a seamless shopping experience where customers do not have to wait in line. How? ● The concept relies on the combined use of cameras, sensor fusion, computer vision, and deep-learning algorithms to track customers during their time in the store, noting each item picked up, put back, or added to their virtual carts. For the biometric hand palm variant, 3D hand palm scanners and a palm recognition software are used. Enrollment/digital identity creation and verification ● An Amazon account can be made online, and enrollment is done in the storefront at the enrollment kiosk. The online Amazon account can be linked to the hand palm biometric by scanning one's hand at the kiosk. Verification of identity how? ● Customers are identified by either a QR code generated by the Amazon Go app in Amazon Go stores or their credit card in third-party retail stores where the Just Walk Out environment is available. For? ● Amazon account holders Table A-1. Key facts for the Amazon Go case study. Just Walk Out technology and includes the camera and sensor hardware as well as the software system. Table A-1 contains a summary of the Amazon Go case study. How Does It Work? Before the Customer Journey • Amazon Go relies on sensor fusion (analyzing and aggregating data from multiple sensors, including weight and movement sensors), advanced data hosting services through Amazon Web Services, and advanced computer vision–based machine learning (Amazon 2015). • The hardware includes electronic shelves, cameras, fixtures, and a facility management system. • The inventory management involves data storing and item identification. • In the case of Amazon Go stores, customers create an Amazon account and download the Amazon Go app. • In the case of Just Walk Out–enabled stores, customers access the store with their credit card.

Case Study: Amazon Go Cashierless Retail Experience 137   The Customer Journey The customer journey can be described by the following: • Each shopper (and that shopper’s party) enters and is identified with a QR code generated by the Amazon Go app, biometric hand palm, or a credit card in the case of stores equipped with the Just Walk Out technology. • The technology tracks the customer’s movements and interactions with the different store items. As customers remove items from the shelves, those items are added to their virtual cart (Kumar et al. 2013). • The customer receives a receipt and is charged when exiting the store. Retention and Storage Account data are saved on Amazon’s own servers. • Cameras track throughout the store in real time using the video feed streaming from a ubiquitous network of cameras (Bacco and Hiatt 2010). • Amazon Go stores retain data on the interactions of individual customers with the items on the shelves. These data are used to further train the artificial intelligence running the architecture. • Account data are retained and stored at Amazon until the passenger opts for the deletion of the account. • Customers can elect to delete their biometric data. System Architecture Flow Diagram The flow diagram for this case study can be found in the Amazon Go Cashierless Retail Experience case study of Chapter 2. Source: Amazon 2020. Figure A-2. Just Walk Out enables seamless store experiences for other retailers as well.

138 Airport Biometrics: A Primer System Specifications The system relies on an artificial intelligence (see Figure A-3) to track the customer in the store. The artificial intelligence architecture relies on Amazon Web Services for streaming services as well as advanced computer vision–based machine learning. Computer Vision–Based Machine Learning To associate the right items with the right customers, the technology relies on aggregating data from different sensors linked with the location information of the sensors. The artificial intelligence driving the architecture tracks the customers in the store by aggregating data from different sensors through sensor fusion and solving different identification and linking problems to associate customers, their location, and their interactions with items in the store. Person Detection The Just Walk Out technology does not use facial-recognition technology but relies on red- green-blue cameras equipped with depth- and distance-sensing capabilities. Each customer is associated with a general profile and an anonymized 3D point cloud. During the customer’s time in the store, a deep-learning algorithm predicts the customer’s location and associates that location with actions and interactions with store items (see Figure A-4). System Architecture, Pre-Existing Systems, and Databases The following explain the buildup of the system and its processes: • Customer information and biometrics are collected at the entry gate. • The identification of distinctive features on the hand(s) of the customer relies on a propri- etary algorithm, with distinctive features of the hand specific to this proprietary technology architecture (see Figures A-5 through A-7). • Hand biometrics data that are collected are either stored, if the customer has an Amazon account, or are deleted once the customer exits the store. • The customer holds his or her palm over the device to opt in. Source: Amazon 2019. Figure A-3. Amazon artificial intelligence for the Amazon Go retail experience.

Case Study: Amazon Go Cashierless Retail Experience 139   Stakeholders and Responsibilities Stakeholders The main stakeholders of Amazon Go concept are Amazon and the third-party retailers who have purchased Just Walk Out technology services. Responsibilities Amazon owns the Just Walk Out concept, which builds on a series of patents submitted by Amazon Technologies since 2013 (Puerini et al. 2014). Case Study Review Benefits The Just Walk Out technology presents benefits both for the customer and the retailer. Benefits to customers include: • Improved customer experience over time with deep learning allowing for faster tracking and more accurate identification of interaction with store items, • Limited contact and interaction with store employees, • Reduced time spent in the store, and • No use of facial recognition. Benefits for the retailers providing the Just Walk Out–enabled experience include: • Adaptability of the Just Walk Out technology to different store layouts, • Financial savings due to reduced staff cost related to cashiering or inventory, • No use of facial recognition, • Improved customer experience, and • Detailed consumer profile data. Source: Amazon 2019. Figure A-4. Logic structure of Amazon Go and technology components.

140 Airport Biometrics: A Primer Source: Kumar et al. 2018. Note: Numbers in figure are part of the patent application and are not relevant to this discussion. Figure A-5. Hand biometrics identification process.

Case Study: Amazon Go Cashierless Retail Experience 141   Source: Kumar et al. 2018. Note: Numbers in figure are part of the patent application and are not relevant to this discussion. Figure A-6. Hand biometrics characteristics identification.

142 Airport Biometrics: A Primer Source: Kumar et al. 2018. Note: Numbers in figure are part of the patent application and are not relevant to this discussion. Figure A-7. Person detection based on hand biometrics identity.

Case Study: Amazon Go Cashierless Retail Experience 143   Responses From Customers Crowd-sourced reviews for individual stores rate on average more than 4 stars out of 5. A stated choice survey conducted by the Shorr group in 2018 found that “84% of respondents to a survey said that they see Amazon Go as a ‘type of grocery shopping experience’ they’d enjoy more than traditional grocery shopping” and “over 25% of respondents said that they would pay more for grocery products if it meant they didn’t have to wait in line at checkout” (Shorr 2018). System Performance and Specifications Review The Just Walk Out technology requires an approximately $1 million investment in hard- ware. Customers spending less time in the store allow for higher customer throughput per hour compared to a traditional store (Cheng 2019). The system is designed for 99% accuracy, including during the busiest periods. On average, Amazon Go stores process 550 customers per day and as many as 90 people at any given time. Fall-Back Options • Despite the absence of cashiers, a few store staff members are present to assist customers with any technical issues, answer questions, and process cash transactions. • If customers are incorrectly charged for an item, they can contest the charge and be reimbursed. Concerns • Privacy and use of collected data: There is a lack of transparency on how the collected data factor into the overall Amazon personalized marketing strategy. The architecture relies on deep learning, and data mining of the customer’s activity in the store would improve the experience and accuracy over time. • Lack of transparency around the use of data slowed the adoption of the technology in Europe because of confrontation with GDPR regarding consent to the processing of personal data. In the context of the regulation, every consent request must state the precise purpose for which the data will be processed (Walters 2020). Lessons Learned The Just Walk Out technology initially relied on motion tracking and an anonymized cloud of data to identify individual customers. However, in December 2019, Amazon submitted a patent for a non-contact biometric identification system to identify customers by their hands (Kumar et al. 2018). Introducing hand biometrics as one of the identifying features of each customer is expected to simplify the person-detection component of the Just Walk Out architecture. Findings and Trends Findings The Just Walk Out technology is a potential template for future models of touchless and cashierless retail at airports and other shopping locations. The use of biometrics for identifica- tion, camera tracking devices, image analysis software, and a program that automates product billing has proven to create a new user-friendly experience that is more efficient and is touch free and seamless. Amazon now has several versions of this retail technology in operation, and future revisions of the concept will only improve accessibility. Enrollment challenges may be resolved with biometric palm geometry recognition, which is also being trailed, or with a simple

144 Airport Biometrics: A Primer two-step authentication process. Another option is the use of not just one biometric, but two or more, thereby providing options for customers to choose from. The main benefits behind using this type of software are significant time savings for customers and financial savings for retailers through lower operational expenditures on employees (e.g., labor wages, benefits). Some enrollment challenges may be resolved with simple two-step palm enrollment, which is interesting because it may seem less invasive when compared to a picture of one’s face. Furthermore, this type of software presents a potential alternative to current and future models for touchless retail for airports and airlines. Future Situation and Broader Implementation Amazon submitted a patent application for a touchless hand scanning system named “Amazon One” and started implementing it in Amazon Go stores in October 2020. Customers scan their hands at the entry gate to enter the store. Trends Identified A trend identified in the Amazon case study is that the use of hand biometrics is aimed to facilitate a more efficient, user-friendly (retail) experience. In the cashierless system, time is saved, shopping requires less fumbling of personal items during payment, and simplicity for the user can bring satisfaction. In this specific case, it is not only the biometric technologies enabling this, but also the camera tracking system and software, which allow for the automatic charging of customers to their accounts. This is a trend that will likely expand to other sectors outside of retail and airports. Similarly, the retail experience removes the need for contact points and human interactions, which has the added benefit of reducing the risk of transmissible diseases, which is especially beneficial in the COVID-19 era. The camera system and the 3D hand geometry scanners allow for tracking and identification without customers needing to touch any surfaces.

Biometrics is one of the most powerful, but misunderstood technologies used at airports today. The ability to increase the speed of individual processes, as well as offer a touch-free experience throughout an entire journey is a revolution that is decades in the making.

The TRB Airport Cooperative Research Program's ACRP Research Report 233: Airport Biometrics: A Primer is designed to help aviation stakeholders, especially airport operators, to understand the range of issues and choices available when considering, and deciding on, a scalable and effective set of solutions using biometrics. These solutions may serve as a platform to accommodate growth as well as addressing the near-term focus regarding safe operations during the COVID-19 pandemic.

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Amazon Go: Venturing into Traditional Retail

By: Wiboon Kittilaksanawong, Aurelia Karp

In December 2016, Amazon.com, Inc. (Amazon), the largest online retailer, entered the offline retailing industry by launching its first Amazon Go store in Seattle. Previously, the company had entered…

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• Publication Date: Jun 28, 2017
• Discipline: Strategy
• Product #: W17398-PDF-ENG

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In December 2016, Amazon.com , Inc. (Amazon), the largest online retailer, entered the offline retailing industry by launching its first Amazon Go store in Seattle. Previously, the company had entered the food, diaper, and housekeeping product manufacturing industries with its Amazon Elements brand. The company had not been profitable until 2001 and was still facing some financial difficulties, but it was named the fourth most valuable public company in the United States in 2016. In 2015, it surpassed Wal-Mart Stores, Inc. (Walmart) as the most valuable online retailer in the country. Given its current competitive advantages in the online retail business, could Amazon reproduce this success in offline markets? Did Amazon's diversification into offline retailing make sense considering its existing resources and capabilities, the presence of established traditional retailers such as Walmart, and a market trend that was increasingly moving toward online stores?

Wiboon Kittilaksanawong is affiliated with Saitama University. Aurelia Karp is affiliated with Nagoya University of Commerce & Business.

Learning Objectives

This case is intended for senior undergraduate and graduate-level business school students in courses on competitive strategy, Internet marketing, new market entry, and supply chain management. After completing the case, students should be able to do the following: Understand the competitive strategies of an online retail company that tries to diversify to compete with brick-and-mortar retailers in the global market. Evaluate the extent to which a company can diversify, given its resource and capability constraints. Analyze what it means to be a first mover and how such a company can sustain its first-mover advantages. Assess the use of standardization and localization strategy in a new international market entry. Understand the critical role of efficient supply chain management.

Jun 28, 2017

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W17398-PDF-ENG

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Please note you do not have access to teaching notes, amazon go convenience stores: skip the lines.

Publication date: 29 June 2021

Issue publication date: 24 August 2021

Teaching notes

Theoretical basis.

This compact case study uses the marketing mix (product, price, place and promotion) and customer segmentation/targeting as theoretical platforms for the Amazon Go business concept. It reinforces the idea that these are important aspects in developing a successful marketing strategy especially when they are aligned with the core competencies of a firm. Additional concepts include localization strategy, loyalty and Maslow’s hierarchy. Localization focuses on merchandising and local partnerships. Customer loyalty is discussed in the context of loyalty programs and consumer trust. Maslow’s hierarchy is used as a way to connect the pandemic and safety concerns to the offline retail experience.

Research methodology

This case was developed from secondary sources readily available in the public domain including websites, news articles and social media sites. This case has been taught in undergraduate marketing management courses.

Case overview/synopsis

In 2018, Amazon opened high tech convenience stores across a number of metropolitan cities in the USA offering a checkout-free experience for customers. This case evaluates the marketing aspects of the move including industry structure, store format and customer loyalty. The underlying question is how will Amazon, the company that pioneered online shopping, perform in an offline retail marketplace that is highly competitive? Will Amazon be able to leverage its massive technology power and shake up offline retail? Will changing market forces caused by the pandemic reshape retail as we know it?

Complexity academic level

This case should be used in a marketing management course or a retailing course for undergraduate students. Applicable concepts include competitive advantage, marketing mix, customer loyalty and retailing in a digital world. This case could also be used to discuss or compare the differences between online and offline brand leadership.

• Marketing mix (four Ps)
• Segmentation and targeting
• Customer loyalty
• Competition
• Market forces

Acknowledgements

The author would like to thank Dr Rebecca Morris (Westfield State University) for teaching the compact case study technique through her “hackathon” events.Disclaimer. This case is intended to be used as the basis for class discussion rather than to illustrate either effective or ineffective handling of a management situation. The case was compiled from published sources.

Furnelli, A. (2021), "Amazon Go convenience stores: skip the lines", , Vol. 17 No. 3, pp. 320-332. https://doi.org/10.1108/TCJ-11-2020-0165

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Copyright © 2021, Emerald Publishing Limited

You do not currently have access to these teaching notes. Teaching notes are available for teaching faculty at subscribing institutions. Teaching notes accompany case studies with suggested learning objectives, classroom methods and potential assignment questions. They support dynamic classroom discussion to help develop student's analytical skills.

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Amazon Go: The impact on human jobs, retail innovation, Amazon's bottom line

Amazon Go, a cashier- and cash-free shopping experience from Amazon, has garnered headlines, some consternation and a lot of oohs and ahhs from the tech press.

But now the access journalism, tours and fun facts have passed and it's time to look at the fallout, the impact on business, and how Amazon Go can ultimately add to Amazon's bottom line.

Obviously, Amazon Go deserves some play. After all, it's downright bizarre how lines for Amazon Go can go around the block all so folks can have a shopping experience without a line.

Also: What it's like inside Amazon's futuristic, automated store (CNET) | Shopping at Amazon Go is really freakin' fast (Video) | Amazon Go launches: The automated retail revolution begins (TechRepublic) | Here comes the future of retail (again) brought to you by tech vendors | Robot fired from grocery store for utter incompetence

Take a look at our video up top for a quick tour of the moving parts.

The human factors

• How many humans are needed to iron out the inevitable issues? Watch any self-checkout row at a grocery store and you see the limits of automation -- and the ability of people to navigate technology. Generally speaking, any person with more than four items at a self-checkout area stumbles and requires help. At Amazon Go, there will inevitably be similar issues -- even though the approach where you simply walk out with goods may eliminate some friction. Read more: AI and jobs: Where humans are better than algorithms, and vice versa | Five tech jobs that AI and automation will make radically more efficient
• What happens when things get complicated? For now, the Amazon Go app enables you to ask for a refund without returns and no questions asked. That approach is fine for a beta, but should Amazon Go scale it's a margin hit and then some.
• Privacy. Amazon Go is largely powered by a surveillance system. Obviously, this surveillance is necessary to prevent theft, verify purchases and ultimately figure out who you are. Given the lines that flow around the block at the first Amazon Go in Seattle, these potential privacy issues don't matter much.
• The digital/economic divide. One of the big headlines on launch day for Amazon Go was that the store doesn't take food stamps. The reason for that is obvious: Food stamps are a more complicated transaction and you can't use them to plug into an app-controlled payment system. At scale, Amazon Go will ultimately be seen as anti-poor.
• Jobs. Amazon Go is nuking the concept of cashiers and if the rest of retail follows (likely to some degree) many jobs will be lost. Amazon Go will be one more anecdote to the ongoing discussion around how automation, technology and artificial intelligence are killing jobs over time.

Impact on retail

• Can Whole Foods go cashier free? You can't help but look at Amazon Go and wonder how much of this technology will wind up in Whole Foods. Keep in mind, that Amazon associates are in the store to help customers and make food. These higher value tasks are already at Whole Foods. What's unclear is whether the Amazon Go technology can apply at scale to Whole Foods. We'll find out as the Amazon Go beta plays out. Read more: How to automate the enterprise: Your guide to getting started

Special feature

Ai, automation, and tech jobs.

There are some things that machines are simply better at doing than humans, but humans still have plenty going for them. Here's a look at how the two are going to work in concert to deliver a more powerful future for IT, and the human race.

• Sensor proliferation in retail. Amazon Go relies on technologies such as sensors, deep learning and other new technologies. The proof-of-concept store from Amazon will likely give retailers more of a reason to accelerate Internet of things projects that were primarily focused on supply chain and distribution. Read more: What is the IoT? Everything you need to know about the Internet of Things right now

Impact on Amazon

• There is tremendous public relations impact for Amazon Go . Sure, there are concerns that Amazon has too much power, but Amazon Go does illustrate how the company is innovative. That innovation storyline trumps any concerns about the future of cashier jobs.
• How much of this Amazon Go experience can be packaged as an Amazon Web Services experience? Much of the technology behind Amazon Go is available as an AWS service. It's quite possible that Amazon Go's backend can help sell more AWS to enterprises. Amazon Go could be a nice halo showpiece for AWS. XaaS: Why 'everything' is now a service | Infographic: Why companies are switching to Everything as a Service | Free PDF download: The Future of Everything as a Service | Re:Invent 2017: AWS all about capturing data flows via AI, Alexa, database, IoT cloud services
• Amazon Go and Prime. All you need today for Amazon Go is an Amazon account. In the future and at scale, rest assured that the Amazon Go approach will be tied to Prime somehow. For what it's worth, Amazon is estimated to garner an additional $300 million in revenue from its monthly price increase from $11 a month to $13 a month, according to Cowen analyst John Blackledge. By linking a concept like Amazon Go to Prime, Amazon may alter its household income Prime subscriber mix. Here's what it looks like today.

More topics:

Free PDF download: Turning Big Data into Business Insights

TechRepublic : Amazon AI: The smart person's guide | How to become an Alexa developer: The smart person's guide

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The best amazon deals right now: may 2024, amazon prime day is back this july. here's what we know so far..

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Is the Amazon Go cashierless-store concept the future of retail or just another fad?

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By Jennifer Faull, Deputy Editor

August 20, 2021 | 9 min read

Listen to article 4 min

Amazon has paved the way for ’just walk out’ shopping and now all manner of retailers are experimenting with cashierless stores. As part of our Retail Deep Dive , we ask experts: is it the future of shopping, or just another retail fad?

Amazon opened its first cashierless store in the UK earlier this year (check out The Drum editor-in-chief Gordon Young’s experience here ) and since then the likes of Tesco and Morrisons have committed to trials of the technology. Some experiments have already gone awry, however, Sainsbury’s having abandoned its cashierless stores after tests in early 2019 led it to admit “not all our customers are ready for totally till-free“.

So what does the future hold? The Drum caught up with industry experts for their take.

Michelle Whelan, UK chief executive, VMLY&R Commerce

Attitudes to cash changed during the pandemic – the majority of UK consumers now prefer to go cashless. The pandemic also accelerated innovation in payments, fueling the development of low-touch transaction systems with an emphasis on consumer experience. According to UK Finance research, the number of transactions using coins and notes fell by 35% last year, while contactless methods accounted for more than a quarter of all payments.

This is not a flash in the pan. Gen Z and millennials were adopting mobile payments long before Covid, regularly using technology-enabled payment methods embedded in their phones. They see cash as redundant and therefore an encumbrance.

Looking east, everything in China is now cashless thanks to two giant payment platforms – Alipay (Alibaba) and WePay (WeChat) – that own 90% of the market. The payment mechanic is typically a QR code, whether it is a local street vendor selling home cooked food or a QSR restaurant such as KFC.

Over the last months there has been real advancement in the cashless transaction space. Suning.com in Nanjing (China’s third largest e-commerce platform) has recently completed a successful trial of cashless payments involving facial recognition.

In the UK, Amazon’s ‘just walk out’ technology is far from being alone and is in its infancy. A cashless society is not a fad. Arguably it’s a necessity to stay relevant with new audiences and has a role to play in shouldering the future of retail.

Jessica Chapplow, head of e-commerce, Havas Market

There’s no doubt that ’just walk out’ shopping has benefits for retailers and customers alike.

For retailers, the supply chain becomes far more optimized to the store when it comes to these cashless experiences, and the combination of AI and IoT technologies to power walk-out technologies also provides more data on stock and products’ shelf life, enabling them to ensure that 100% of their shelf space is allocated. Staff can also receive real-time inventory updates.

Ultimately, the walk-out model offers retailers far more behavioral data, going beyond what can traditionally be collected from POS systems. Brands can gain insight into what products are picked up and returned to shelves, how long the customer stands in front of what shelves and what products they select as a result, as well as better understanding the in-store behaviors of visitors who exit without making a purchase. This could level the playing field between online versus offline analytics and insights, offering the type of information that retailers could previously only obtain via their e-commerce websites.

For consumers, cashless stores add convenience and personalization to the shopping experience, with shoppers matched to their online shopping accounts and purchase histories. However, retailers (particularly those outside of the grocery space) and merchants will need to reassure people visiting their stores that they are taking the necessary steps to keep their data safe.

Providing a human element is the logistical advantage and key differentiator that physical stores have always had over e-commerce platforms. Consumer adoption of cashless stores will require retail brands to strike the balance between providing a quick, seamless experience and meeting customers’ desires for human interaction. Otherwise, this new way of shopping may become just another passing fad.

India Doyle, deputy editor of consumer insights agency, Canvas8’s Library

Walk in/walk out retail embodies the battle between desires for hyper convenience and Covid safety and a deep need for human connection and sense of community in an era of loneliness. We know from the boom of 15 minute delivery and the rise of Amazon Prime that there’s a growing expectation from people that retail should be instant and seamless. And that behavior has helped to fuel the growth of cashless, walk in/walk out stores.

While they are convenient, the question is what needs will they serve for that consumer group who is already now comfortable with, and in the habit of using, instant online delivery? If people can get everything they want delivered to their door in 15 minutes, the allure of the supermarket – however convenient – is lessened. Plus the emergence of the hybrid working model means commuters are less likely to be doing a supermarket sweep in a hurry after work and more likely to want groceries delivered to their homes.

Research found that 52% of British shoppers want to return to shopping in store after a year of lockdown, and there’s also a need for retailers to think about the element of digital exclusion that cashless stores introduce – research by the Post Office for example found that 40% of Londoners still rely on cash on a weekly basis and 1.4 million people in the UK don’t have a bank account. At a time when people also want businesses to help solve social issues and help to create more equitable and inclusive communities, small details such as making payments accessible to everyone are important to keep in mind.

Nick Blenkarne, creative strategy director, Imagination

What might have initially seemed like a slightly gimmicky niche store concept has now become a very real prospect for traditional retailers. There are a series of experiments ongoing from the ’Big 4’. Tesco and Morrisons are trialing a cashierless sensor and camera-based store akin to Amazon Fresh, and Sainsbury’s tested a mobile-pay only store in Holborn.

But the real test of long-term adoption will be the extent to which ’just walk out’ genuinely improves the shopping experience for customers and provides value to retailers in a way that outweighs the high implementation costs.

For customers, the promise of a more frictionless experience with no queues is balanced by some apprehension, at least in the short term. ’All these cameras feel a bit creepy.’ ’Have I been charged properly?’ ’It’s very cold and clinical.’ Those concerns might well dissipate over time as it becomes normalized and trust builds. But there’s also the barrier of systems that require customers to have an app and online account to enter a store. Sure, most people already have an Amazon account, but if all retailers do go down that route, forcing customers to download yet another supermarket app to allow entry could prove off putting.

For retailers, the benefits in terms of data are huge. Being able to target and personalize stock based on local user needs can lead to much lower stock wastage, and the ability to retarget them online based on in-store behaviors offers great sales potential. But the cost of rolling out sensors, cameras, turnstiles and all of the other hardware required will be astronomical.

As cash becomes phased out of societies in general, retailers will follow suit, but they also don’t want to alienate customers who aren’t there yet. With more wholesale changes like ’just walk out’, we will continue to see retailers experiment with a mix of store concepts, but until the consumer concerns are ironed out and the right combination of investment versus return is figured out, the jury is out whether this particular incarnation will proliferate.

Jo Arden, chief strategy officer, Publicis.Poke

‘Just walk out’ shopping is very cool. It’s like magic. The power of technology to solve problems of this scale makes my mind boggle. Except, I’m not sure it is solving any problem at all. If anything, I suspect it will compound some pretty serious problems that already exist. The last 12 months have been the worst in 25 years for retail job losses. While Amazon’s UK workforce is projected to hit 50,000 this year, those jobs do little to replace the opportunity and sense of community that vanishes with the loss of more traditional retail job roles. Covid is not the only pandemic we face; loneliness shows no signs of abating. There is something cruelly ironic too about the arrival of ‘contactless shopping’ after 18 months (and counting) when most people have craved more, not less, in-person contact. If we now no longer even have the time to swipe, tap and maybe chat as we pick up a sandwich given the year we’ve had, our priorities as people need some serious re-examining. There are so many ways in which tech could add to the retail experience and I’d like to see this same ingenuity applied to building more, not less human connection.

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Polacco, Backes / Journal of Business and Management, 24 (1), March 2018, 79-92

The Amazon Go Concept: Implications, Applications, and Sustainability

Alex Polacco Kayla Backes

Amazon opened its first Amazon Go sans-checkout grocery store in Seattle , WA in early 2017. Having worked out the bugs, Amazon plans to fully open the store in early 2018. The experience is designed for those who do not like to stand in a checkout line. Amazon benefits by eliminating the cost of checkout personnel. Customers use an Amazon Go app and scan their I-phones on entering the store. Sophisticated technology tracks their purchases, allows them to exit the store without a physical check-out, and automatically charges their account. This paper explores implications, applications, and sustainability within the industry, and in other industries. Included are also the results of a survey conducted with management of six grocery stores in a city in the Midwest.

Keywords: IT (information technology), Amazon Go, machine vision, artificial intelligence, EPOS (electronic point-of-sale).

Reference to this paper should be made as follows: Polacco, A. & Backes, K. (2018). The Amazon Go concept: Implications, applications, and sustainability. Journal of Business and Management, 24 (1), March, 79-92. DOI: 10.6347/JBM.201803_24(1).0004. 80 Polacco, Backes / Journal of Business and Management, 24 (1), March 2018, 79-92

Introduction

In early 2017, Amazon opened its sans-checkout grocery store, Amazon Go on a pilot basis. The experience is designed for those who don’t like to stand in a checkout line. Sophisticated technology tracks their purchases, allows them to exit the store without a physical checkout, and automatically charges their account. With lessons learned Amazon Go plans to open the store fully in early 2018.

In order to fully understand the implications of this new technological and operational model, we must first look at how the shopping process will shift with Amazon Go. We will examine the type of technology being used such as computer vision and weight sensors. Then will we explore the industries that are currently exploiting these innovations.

Once we have reviewed how the sans-checkout grocery store concept works, we will look closely at the impacts on the retail operational model. We will examine the evolution of self-checkout processes over time. Then, we will investigate the potential for sustainability within Amazon Go’s supply chain.

We will delve into the effects on the community at large. Focus will be on the current employment landscape and how it may be impacted by this new technology. We will also touch on any sociocultural implications that may exist.

After we have discussed Amazon Go’s potential impacts on the community, we will switch gears and consider the possibility of using this concept in other industries. We will take care to examine how similar technology is currently being used, and what industries will most likely be affected by these recent developments. For example, how the payment method could possibly impact banks and financial institutions.

Upon reviewing how this technology may influence the retail operational model, the community, and other industries, we will look at the specific threats and opportunities that may arise. Focus will be given to the work force, new industry standards, and concepts of trust. Once all of these topics have been covered, managers may better prepare themselves for the potential threats and opportunities that could lie ahead. We will also include the results of interviews conducted with managers of several grocery stores in the Midwest. 81 Polacco, Backes / Journal of Business and Management, 24 (1), March 2018, 79-92

Methodology and Research Questions

This study was conducted on current literature in the library and from online resources. The managers of six major retail and grocery stores were also interviewed:

1. Jon. Assistant Manager at St Cloud, MN Target on February 28, 2017. 2. Forsell, P. Assistant Manager at St Cloud, MN Walmart on February 28, 2017. 3. Gruber, K. GeneralManager at St Cloud, MN Lund’s & Byerlys on February 28, 2017. 4. Lachmansingh, R. Store Director at St Cloud, MN Cash Wise on February 28, 2017. 5. Rick. A. Assistant Manager at St Cloud, MN Walmart on February 28, 2017.

The managers were given the following information and asked the following questions: In early 2017, Amazon plans on making their sans-checkout grocery store, Amazon Go, available to the public. The experience is designed for those who don’t like to stand in a checkout line. Sophisticated technology will track their purchases, allow them to exit the store without a physical checkout, and automatically charge their account.

Survey Questions:

1. What would some of the pros and cons be in the adoption of this technology? 2. Do you think it could benefit your chain of stores and your particular store? 3. Do you believe that Amazon Go’s new technology will be adopted by other food chains? 4. Do you believe that this new technology is sustainable? 5. What are the greater effects that you think this technology will have on their respective communities if implemented into food chains? 6. Could this new concept make Amazon Go a major player in the grocery business in the future?

Amazon Go Review

Shopping Process

In order to shop at an Amazon Go store, the consumer must first create an Amazon account, have a smart phone, and download the Amazon Go app. Once these 82 Polacco, Backes / Journal of Business and Management, 24 (1), March 2018, 79-92

items are in place, the customer scans their Amazon Go app, located on their smartphone, upon entering the retail store. At this point, the customer is free to walk around the store, shop, and add and replace items to or from their virtual cart (Amazon Go Editorial Staff, 2017).

For Amazon Go to accomplish this paradigmatic shift in the operational model of retail shopping, it relies heavily on technological innovation. The technology Amazon Go uses automatically senses when an item is picked up, put back on the shelf, and tracks who committed the action. Once the customer is satisfied with the items they have chosen, they simply walk out the door - no lines, no checkouts, and no waiting. The purchased items are charged to the customer’s Amazon account and a receipt is sent to the Amazon Go app (Amazon Go Editorial Staff, 2017).

Technology Used

Amazon Go uses what they call, “Just Walk Out Technology”. This technology is responsible for keeping track of items taken from, and in some cases, returned to, the store’s shelves. It also keeps track of the individual’s virtual cart (Amazon Go Editorial Staff, 2017).

For this to be possible, Amazon uses technology similar to that of self-driving cars. The system relies heavily on sensor fusion, computer vision, and deep learning algorithms (Amazon Go Editorial Staff, 2017). While they have not revealed too much about their technological advancement, it appears that Amazon plans on making cameras central to their operational strategy. These cameras will track not only the products and their placement, but also the individuals who do the shopping (Swanson, 2016).

Industries with Similar Technologies

Amazon states that the technology behind their cashier-less operating model is the same technology prevalent in driverless cars (Amazon Go Editorial Staff, 2017). However, the automotive industry isn’t the only place that this type of technology is being used. Vision technology is also extensively used in manufacturing industries to assure quality, and to inspect, test, and sort parts (Dipert, 2017).

Computer vision and machine learning have become so prevalent across industries that it can even be seen in the scientific study of animal behavior. 3D Computer vision software has already been developed that scans the subject animal’s behavior in order to try and measure the quality of life of the animal. It is capable of learning and differentiating normal behavior from abnormal behavior. This allows for 83 Polacco, Backes / Journal of Business and Management, 24 (1), March 2018, 79-92

an objective analysis of how the animal is coping in its captive environment (Barnard, Calderara, Pistocchi, Cucchiara, Podaliri-Vulpiani, Messori, et al. , 2017).

In addition to the automotive, manufacturing, and scientific industries, the hospitality industry is no stranger to the type of sensor technology potentially used by Amazon Go. A similar concept is used at some hotels that have condiments and drinks on the counter or in the refrigerator, known as a mini bar. These snack trays have motion sensors and electronic scales built in, that at times, may automatically charge the consumer if something is moved (Laasby, 2014).

Survey Responses

Q1: What would some of the pros and cons be in the adoption of this technology?

Pros cited by the respondents:

All six respondents said that automatic self-service will save the customer time. Jon and Lachmansingh said that more interesting jobs would be created, while Sorenson, Gruber, Rick, Forsell, and Lachmansingh said that entry level jobs would be eliminated. Sorenson, Gruber, and Rick said that product and coupon pricing would be more accurate. Rick felt that costs, product price, and safety costs would go down.

Cons cited by the respondents:

All six respondents said that the cashier-less service will eliminate staff- customer interpersonal communication and limit service levels. Jon felt that personal safety would be affected, while Rick said that a lot of jobs would be lost.

Q2: Do you think it could benefit your chain of stores or your particular store?

Respondents had different opinions: Jon and Forsell said there would be more work but it would be more efficient. Sorenson had no comment. Gruber said that there could be labor-savings, but it would help as it is hard to find employees these days. Lachmansingh said that only a couple of departments would take advantage, such as end of line cashiers. Rick said that it could because Sam’s Club and Amazon are big competitors, although he couldn’t see adopting it very soon, and the closest technology currently used was the in-store scan and self-checkout.

84 Polacco, Backes / Journal of Business and Management, 24 (1), March 2018, 79-92

Q3: Do you believe that Amazon Go’s new technology will be adopted by other food chains?

All respondents said – yes. Jon said that is the future and more customers will be served. Sorenson said it would take time to adopt. Gruber, Forsell, and Rick said that the main driver will be savings in labor costs and time. Lachmansingh said that it will take time to follow up with this technology.

Q4: Do you believe that this new technology is sustainable?

Jon said - yes. It will work perfectly with the new generation. Sorenson said - sure. It will help in other parts of the store such as inventory. Gruber said that more proof was needed that it works from a customer perspective. Lachmansingh said that he was not sure, and that more time was needed. Rick said that he needed to see it in action and that there is always someone who will try to hack the technology. Forsell said that time would tell.

Q5: What are the greater effects that you think this technology will have on their respective communities if implemented into food chains?

Jon said that small businesses cannot afford this technology. Sorenson said that it will force others to adopt, and that it will save time and money. Gruber said that time is important to everyone and that the average customer would be pleased because they will no longer wait in line to checkout. Lachmansingh said that it would be an extension of how people do things at the moment. There are phones, laptops, tablet that can help to shop faster, cheaper, and delivered to their homes. They only need to visit stores to check the price and order the products. Rick said that there would be time savings.

Q6: Could this new concept make Amazon Go a major player in the grocery business in the future?

Jon said that it would. Sorenson said – absolutely. Tracking will have to be adopted by the other food chains. Gruber said - absolutely. With this type of technology, customers will save a lot of time and money too. However, with good technology like that, someone will always try to do one better and will take advantage of it. Lachmansingh said –yes. With this technology, Amazon will fill customers’ needs for faster checkout and time savings. Rick said that he thought so. Amazon was already a major player and with this technology they would take off to a new and different level. Forsell said – yes. 85 Polacco, Backes / Journal of Business and Management, 24 (1), March 2018, 79-92

Operational Evolution

Movement Towards Self-Checkout

The Amazon Go concept is an evolution from the self-checkout operational model that is used at Walmart and other grocery stores. However, self-service in the retail arena has been evolving for over a hundred years. In 1916, Piggly-Wiggly made the innovative decision to allow customers to explore the aisles of products without the assistance of an employee. Then, in 1992, some of the first self-checkouts debuted (NCR, 2014).

Since then, the self-checkout model has been widely accepted and immensely popular. According to a study conducted by computer and point-of-sale terminal company, NCR, those who use the self-checkout indicated that they appreciate the convenience and ease of use that it provides. One interesting note of those surveyed, was that they indicated that they still liked knowing an attendant was nearby to provide help if needed (NCR, 2014).

Paul Forsell, an Assistant Manager with a major retail and grocery store, estimated that roughly 20 to 30 percent of customers prefer self-checkout. The rest give preference to the traditional cashier check-out method. He indicated that while self- checkouts are popular, some people prefer to not have to deal with the technology themselves. In fact, Walmart’s attempt to have customers in 200 stores pre-scan their purchases using their “Scan & Go” app failed when customers could not figure how to use it. Walmart discontinued the experiment (Anderson, 2014).

Sustainability of Supply Chain

With all of this next generation innovation associated with Amazon Go, we must also look at any potential strides in supply chain sustainability that may also be occurring. It’s no surprise that Amazon does have sustainability initiatives that span many of its different services and products. From Amazon Wind Farms in Texas, to its innovative approach to recycling energy of nearby data centers, it’s clear to see that Amazon has been making great progress in its efforts to build upon the best energy and environmental practices. However, one initiative of particular relevance is the work being done with AmazonFresh, Amazon’s grocery delivery service for Prime Members (Amazon Go Editorial Staff, 2017).

AmazonFresh’s initiative with Feed America, a nonprofit organization tasked with feeding America’s hungry through extensive national cooperation of food banks, has led AmazonFresh to donate food to these food banks from its distribution centers. While it is unclear if Amazon Go will incorporate a similar model as Amazon Fresh , 86 Polacco, Backes / Journal of Business and Management, 24 (1), March 2018, 79-92

the partnership with food banks appears to already exist and could potentially be duplicated. In addition, Amazon has stated that the efforts it makes towards energy and environmental practices are intended to be implemented throughout Amazon (Amazon Go Editorial Staff, 2017).

Community Impact

Impact on Workforce

According to the Bureau of Labor Statistics, in 2016, there were 2.7 million people identified as being employed by retail grocery stores, 856,850 of whom are employed as cashiers (Bureau of Labor Statistics, 2017). This number doesn’t even reflect the 3.5 million cashiers that are employed across all industries, not just the retail grocery industry (Bureau of Labor Statistics, 2016). With so many people being employed in this industry, and in jobs that this disruptive technology may make obsolete, it follows that one may be curious how these individuals will be affected by Amazon Go and its cashier-less operational model.

While there could be an obvious adverse impact on cashiers, there could also be an increased demand for technical people to design, implement, and maintain this new technology. Supervisors and customer service personnel would be needed to answer questions, handle returns, and handle quality related issues. Security and anti- theft employees would also be needed to prevent shop-lifters (Rash, 2016). It appears that people will still be needed in retail, perhaps just in different capacities.

Forsell’s take on this new technology appears to reinforce earlier theories. He indicated that if technology was implemented, it would free up the cashiers to perform other duties. He also alluded to the probable increase in demand for individuals with computer maintenance skills, and individuals to help in the validation of purchases prior to leaving the store.

Sociocultural Implications

With all of this fear that Amazon Go’s new “Just Walk Out Technology” will eliminate the jobs in retail stores, it should remain top of mind that humans are still emotional creatures. We are hard-wired to crave human interactions. An example of this can be seen in the increase in popularity of farmers’ markets that provide a more personal experience (Merholz, 2011). 87 Polacco, Backes / Journal of Business and Management, 24 (1), March 2018, 79-92

In addition, an Accenture study found that 77 percent of U.S. consumers would rather interact with a human than with a digital channel to solve service related issues (Davis, 2016). The desire towards personalization in retail shopping would almost inherently require a unique experience that, at this point, may only be possible through dynamic human interaction. At the end of the day, the consumer will decide what type of shopping experience will win out in the retail industry, not technology. Boyle reported that consumers are more concerned with shopping convenience and price, than wait time in a queue (Boyle, 2017).

Impact on Other Industries

There are many industries that are likely to be impacted by the technology and operational model of Amazon Go. For starters, it is believed by some that Amazon intends to increase the number of Amazon Accounts. This could have many benefits besides data-collection; it could also increase the adoption rate of its Amazon Payments platform. If this is the case, it could greatly increase competition for payment platforms such as PayPal, Square, and Visa (Melville, 2017).

This sans-checkout model could be easily implemented across various retailers. While retailers and grocers more than likely don’t have the funds available for research and development like Amazon does, if Amazon Go’s technology were to be offered to the masses this could cause widespread change (Pasquarelli, 2016). As previously discussed, this could potentially cause increased profits, faster shopping experiences, and job role changes. This could mean instead of cashiers, we will have concierges, greeters, and sampler staff (Solomon, 2016). With a little creativity, one could also imagine similar models in non-retail settings such as libraries, check-ins at doctors’ offices, and restaurants.

Walmart announced its adoption of no-checkout technology in December 2017. Dubbed Project Kepler, the technology and concept are similar to that of Amazon Go, and will be beta-tested in an incubator facility. Code Eight, a subsidiary of Walmart, is currently testing a personal shopping service targeting busy New York City moms. The service allows those women to make purchases through text messages (Del Rey, 2017).

In November 2016, leaked documents from Amazon showed its plans to open 2000 grocery stores with a “no line, no checkout” strategy, CA in early 2017. FutureProof Retail launched its first grocery line free checkout in November 2016 in San Luis Obispo, CA. It uses cloud computing, line free mobile technology (Line Free Checkout Provider FutureProof Retail Reacts to Amazon Go, 2016). 88 Polacco, Backes / Journal of Business and Management, 24 (1), March 2018, 79-92

Managerial Implications

The potential threats for retailers, grocers, and their employees, in the event of a widespread implementation of a technology similar to that of Amazon Go, are numerous. This technology threatens those working in cashier positions, gives rise to theft and fraudulent activity concerns among retailers, and could possibly widen the competitive gap between small and large retailers with a potentially large investment. If Amazon were to expand their payment platform, this could create increased competition for companies like PayPal, Square, and Visa (Melville, 2017). In addition, if Amazon chooses to implement sustainability efforts into Amazon Go, like it has with its other business units, it could increase the sustainability standard among retailers (Amazon Go Editorial Staff, 2017).

With potential threats, come potential opportunities. The advent of Amazon Go and the evolution of the self-checkout bring many benefits for both the consumers and retailers alike. For consumers, the decrease in waiting time, and the ease of use are very attractive benefits. For retailers, the ability to reduce lines, relocate personnel resources, and gain the customers trust to provide quick service could prove to be profitable.

Current Status

In November 2016, Amazon Go announced its plan to open its first store for beta testing in Feb-March 2017. The convenience store opened in March with employees simulating customers and service. Important technical and protocol information was obtained which showed that the store would not be ready to serve the public for a while. The system could only handle 20 customers at a time and had problems when the store was at capacity. It also had difficulty tracking merchandise moved to and from shelves (Lamm, 2017).

The technology crashed when the store was too crowded, and required quality control personnel to ensue people were being charged correctly (Boyle, 2017). The system worked well with standard scenarios, but failed when faced with atypical scenarios and distinguishing among similar shaped items, or identifying customers who change apparel such as caps or coats. By the end of March, it became apparent that formal opening to the public would have to be postponed indefinitely.

Although the beta test was necessary to glean information for improvement of the system, critics pointed out that using employees for simulating actual customers was neither credible nor valid due to the inherent bias (Hofbauer, 2017). The report 89 Polacco, Backes / Journal of Business and Management, 24 (1), March 2018, 79-92

also showed that sensors and algorithms inadequately captured couples or families with children who eat products or take items off the shelves. Amazon Go has been using the feedback for focus groups to improve the system in how to handle returns, defective products, or customer service questions (Hofbauer, 2017). In December 2017 Amazon Go announced that it would open to the public in early 2018.

In April 2017, Amazon acquired Whole Foods for $13.7 billion which demonstrated its presence as a major player in the grocery business (Bowman, 2017). Bowman speculated that Amazon was motivated by its difficulties with Amazon Go, but considering the size and timing of the acquisition, it is more probable that the strategy was in the works for more than a few months. Bowman cited Whole Foods plan to hire 6000 more people, and concluded that Amazon will focus on traditional labor service rather than on Amazon Go’s automated processes. It is more probable that Amazon embarked on the Whole Foods and Amazon Go ventures to seize the opportunities in the grocery business and to incrementally automate service processes through its Amazon Go pilot program.

Amazon Go plans to fully open its checkout-free grocery shopping concept in early 2018. The strategy is an evolution from the self-checkout version that is used in many grocery chains today. Advanced technology and computer integrated inventory management systems enable the customer to take products off the shelves, put them in their carts, and leave the store without going through a checkout line. Besides the convenience to the customer, Amazon evidently plans to benefit through a reduction of checkout clerks. The cost of implementing, maintaining, and sustaining the system may offset or exceed cost-savings through reduction of checkout clerks. It is unclear as to whether the new concept will be adopted fully or partially by Whole Foods, other grocery chains, and similar industry applications.

Acknowledgements

This paper is a revised and expanded version of a paper entitled The Amazon Go Concept: Implications, Applications, and Sustainability presented at WDSI 2017 International Conference in Vancouver BC, Canada, in April 5-8, 2017.

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Amazon Go Editorial Staff (2017). Amazon Go, Retrieved from https://www.amazon.com/b?node=16008589011. Anderson, G. (2014, August 14). WalMart’s Scan & Go is a no-go. RetailWire. Retrieved from http://www.retailwire.com/discussion/walmarts-scan-and-go-is-a-no-go/ Barnard, S., Calderara, S., Pistocchi, S., Cucchiara, R., Podaliri-Vulpiani, M., Messori, S., and Ferri, N. (2017). Amazon Go. Retrieved from https://www.amazon.com/ b?node=16008589011. Bowman, J. (2017, November 3). Whatever happened to Amazon Go? Retrieved from https://www.fool.com/investing/2017/11/03/whatever-happened-to-amazon- go.aspx Boyle, A. (2017, March 21). Reports point to caution signals for Amazon Go store. GeekWire. Retrieved from https://www.geekwire.com/2017/caution-amazon-go- checkout-free/ Bureau of Labor Statistics (2017, February 8). Labor force statistics from the current population survey. Retrieved from https://data.bls.gov/cgi-bin/surveymost?ln Bureau of Labor Statistics (2016, March 31). Retail salespersons and cashiers were occupations with highest employment in May 2015. Retrieved from https://www.bls.gov/opub/ted/2016/retail-salespersons-and-cashiers-were- occupations-with-highest-employment-in-may-2015.htm Davis, L. (2016, March 23). U.S. companies losing customers as consumers demand more human interaction, Accenture strategy study finds. Accenture. Retrieved February 25, 2017, from https://newsroom.accenture.com/news/us-companies- losing-customers-as-consumers-demand-more-human-interaction-accenture- strategy-study-finds.htm. Del Rey, J. (2017, December 20). Walmart is developing a shopping service with no cashiers. Recode. Retrieved from https://www.recode.net/2017/12/20/ 16693406/walmart-personal-styling-jet-black-amazon-go-prime-no-checkout-store Dipert, B. (2017, January 23). Visual depth sensors: Multiple applications and options. Vision Systems Design. Retrieved February 25, 2017, from http://www.vision- systems.com/articles/2017/01/visual-depth-sensors-multiple-applications-and- options.html. Hofbauer, R. (2017, November 22). Is Amazon Go nearing public debut? Progressive Grocer. Retrieved from https://progressivegrocer.com/amazon-go-nearing- public-debut Laasby, G. (2014, September 10). Hotels use sensors to bill for uneaten snacks, hit guests with unexpected charges. Milwaukee Wisconsin Journal Sentinel. Retrieved 91 Polacco, Backes / Journal of Business and Management, 24 (1), March 2018, 79-92

February 25, 2017, from http://archive.jsonline.com/watchdog/pi/hotels-use- sensors-to-bill-for-uneaten-snacks-hit-guests-with-unexpected-charges- b99347028 z1-274623181.html. Lamm, G. (2017, March 27). Amazon Go store could be shut down. Digital Editor. Puget Sound Business Journal. Retrieved from https://www. bizjournals.com/seattle/news/2017/03/27/amazon-go-difficulties-seattle-beta- test.html Line Free Checkout Provider FutureProof Retail Reacts to Amazon Go (2016, Dec 6). NewsWire Press Release. Retrieved from https://www.newswire.com/news/line- free-checkout-provider-futureproof-retail-reacts-to-amazon-go-18151183 Melville, A. (2017, January 20). Amazon Go Is About Payments, Not Grocery. Forbes. Retrieved from http://www.forbes.com/sites/groupthink/2017/01/20/amazon- go-is-about-payments-not-grocery Merholz, P. (2011, December 12). The Future of Retail? Look To Its Past. Retrieved from https://hbr.org/2011/12/the-future-of-retail-look-to-i. NCR. (2014). Self-checkout: A global consumer perspective. NCR, 2014. Retrieved February 25, 2017, from https://www.ncr.com/sites/default/files/white_ papers/RET_SCO_wp.pdf. Pasquarelli, A. (2016, December 5). What Amazon Go means for the future of retail. Adage. Retrieved from http://adage.com/article/digital/amazon-means-future- retail/307020/. Rash, W. (2016, December 8). Amazon Go won't kill many jobs, but it may prove a boon to crooks. eWeek. Retrieved February 25, 2017, from http://eds.a.ebscohost.com. Solomon, W. (2016, December 11). What retailers must remember about customer experience amid the Amazon Go hype. Retrieved from http://www.forbes.com/ sites/micahsolomon/2016/12/11/everyones-learning-the-wrong-customer- experience-lesson-from-amazon-gos-cashierless-retail-model/#6297d0f83f25 Swanson, J. (2016). A first look at Amazon Go. Benzinga, 2016. https://www.benzinga.com/news/16/12/8780759/a-first-look-at-amazon-go.

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About the Authors

Alex Polacco* Herberger Business School, St. Cloud State University, 720 4th Ave S, St. Cloud, MN 56301, 320-308-3935, E-mail: [email protected]

Kayla Backes MBA graduate, St. Cloud State University, 720 4th Ave S, St. Cloud, MN 56301, 320-308-3935, E-mail: [email protected]

*Corresponding author

Alex Polacco (MBA, BSIE, CPIM, CSCP, CMOE, CQE, CQA), is a Professor of Management at St Cloud State University in Minnesota. He has been teaching courses in Operations and Supply Chain Management for the past 12 years. Prior to that, he had worked in industry for 22 years as consultant, manager, and engineer. He was a member of the APICS Academic Committee from 2013-2016, and board-member of the Central Minnesota APICS chapter for 9 years.

Kayla Backes (BS Marketing, MBA) graduated from St. Cloud State University. Her work experience is in marketing analysis, and she is currently an instructor in marketing and management.

More Content

Stay connected, additional links, amazon go: a case study in cashless retail pushback.

The decision by Amazon to change course with its cashless Amazon Go stores offers a cautionary tale for retailers about the likely fallout when they try to exclude fiat currency as a payment choice for potential customers.

April 16, 2019 | by David Jones — Editor, Networld Media Group

After Amazon publicly confirmed that it had reversed course and decided to accept cash at its autonomous Amazon Go stores, public officials, consumer advocates and industry experts agreed that the omnichannel retailer has recognized that U.S. consumers are not quite ready to give up cash as a payment option and that digital payment technology can still win the day without locking out an entire class of customers.

"I think this is a wise business move on behalf of Amazon and one that acknowledges that not every one has has access to credit and even those that do don't always want to use it," New Jersey Assemblyman Paul Moriarty told ATM Marketplace sister publication Mobile Payments Today by phone.

Steve Kessel, senior vice president of physical stores at Amazon told employees in March that it will allow cash payments at its cashierless Amazon Go stores, which has become a growing issue in the industry as several retailers and retaurant chains began are experimenting with autonomous retail and cashless payment models. Currently Amazon has a total of 10 stores in Seattle, Chicago and San Francisco, but plans to increase that number to approximately 3,000 by 2021, in a direct challenge to 7-Eleven, Krauzer's and thousands of bodegas across the country.

"We are working to accept cash at Amazon Go," a spokesperson confirmed to Mobile Payments Today.

When asked what type of technological or labor changes would be required, the spokesperson did not directly answer the question and replied that it would would work the same way you would expect, “you’ll check out, pay with cash and then get your change.”

Policy debate

Officials involved in some of the earliest policy debates over cashless retail see the Amazon Go decision as a recognition that local and state governments will do what is necessary to protect the right of their constituents to access goods and services, no matter their socioeconomic status.

"We have not heard directly from Amazon about these proposed changes to their Amazon Go stores, so we are not sure of their intent," said Lauren Cox, deputy communications director at the office of Philadelphia Mayor Jim Kenney. "If this change is being made in an effort to take the concerns about potential discrimination against low-income individuals seriously, then we welcome it."

New York City council member Richie Torres , who led the fight against cashless retail in that city and sponsored a bill to force all stores to accept cash, said that Amazon is recognizing the public backlash against Amazon Go and restaurants with similar policies.

"Amazon saw the writing on the wall and made the right decision to start accepting cash at its Amazon Go stores," Torres said in an email statement provided by his deputy chief of staff. "Now it should extend that policy to other brick-and-mortar stores nationwide. A cashless business model is a discriminatory model that excludes the unbanked and people without access to credit."

The business model

It remains unclear how Amazon Go will transition the business model to begin accepting cash — for example would there be a designated cash checkout line or kiosk or would point-of-sale terminals be configured to accept cash? The change also raises the question as to whether Amazon would need to hire cashiers.

Aite Group senior analyst Thad Peterson said the transition should not be too difficult a task, depending on how Amazon structures cash payment acceptance.

"If you look at an Amazon Go store as the world's largest vending machine, which it kind of is, then accepting cash could easily be an option," he said, "but if the cash payment was taken in-store then it would force a reconfigure of the store to complete a transaction."

Amazon already offers a preloaded stored value product called Amazon Cash, which operates similarly to a prepaid retail gift card or mobile wallet. Customers can load from $5 to $500 cash value onto a card or mobile app and use that payment instrument to shop online. Customers can purchase the cards at CVS, 7-Eleven and Gamestop stores.

The decision by Amazon comes at a time of fierce debate in the U.S. and overseas about cash access, the growing prevalence of e-commerce, and a lack of access to traditional banking facilities among lower income and rural communities.

The Health of Cash, a 2018 study by Cardtronics PLC , found that 92% of consumers want choice in the types of payment methods available to them.

The study also revealed that 73% of consumers use cash regularly, even though they have other options. Additionally, while 37% of respondents preferred a debit card as their go-to payment option, 28% preferred cash.

“Cash is universal, its convenient, it’s accepted everywhere, its safe to use and there is anonymity to it," said Brad Nolan, executive vice president of Allpoint, a unit of Cardtronics.

Industry experience

Officials at Standard Cognition, a San Francisco firm that developed AI-powered checkout technology, which it sells to third-party retailers nationwide and uses to power its recently launched autonomous grocery store in the city, said that accepting cash payments should continue to be part of the retail experience.

“Standard found early on in talking with retailers that they all wanted to accept cash and credit/debit card payments, so right from the start Standard decided to offer a kiosk option for non-app payments,” Michael Suswal, co-founder and COO told Mobile Payments Today via email.

He said shoppers using the Standard or store app can just use the app and walk out of stores, however shoppers that want to pay with cash just need to stop at any kiosk and pay with credit/debit or cash options.

Financial Innovation Now, an alliance of technology firms including Amazon, Stripe, Apple, Intuit, Google, Paypal and Square, has advocated for the development of faster payments and other methods of accelerating the development of e-commerce technologies.

"FIN members are working to provide innovative payment tools that are more accessible, safer and faster than cash," said Brian Peters, a spokesman for the organization. "We are aligned and working towards the same goals of financial inclusion. To make that a reality for all consumers, we are hopeful that policymakers provide flexibility in how we approach all kinds of consumer payment environments."

David Jones

David Jones is the editor of Mobile Payments Today. He is a veteran business and technology journalist, with three decades of experience writing about business travel, real estate and technology.

Since 2015 he covered a range of technology stories for the ECT News Network, which includes the E-Commerce Times, TechNewsWorld, LinuxInsider and CRM Buyer, writing about cybersecurity, artificial intelligence, machine learning, open source computing and privacy issues among others. He recently covered FinTech issues for PYMNTS.com.

He worked as a staff writer for Bloomberg Business News and an online reporter for Crain’s New York Business. He has written for numerous media organizations, including Reuters, The New York Times, The Real Deal, Continental, City Limits and The Nation. 

He was previously awarded the George Washington Williams Fellowship for Journalists of Color by the Independent Press Association. 

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This is the Amazon everyone should have feared

A little less than six years ago, I wrote an article with a similar headline to this newsletter.

At the time, Amazon had once again posted its largest quarterly profit in history—$2.5 billion at the time—on the back of its two fastest-growing businesses that hadn’t even existed when Jeff Bezos took the company public: Amazon Web Services and Amazon Advertising.

“An Amazon that is posting growing profits from its non-core business,” I wrote back in 2018 , “means an Amazon that can continue to keep prices low and invest in ever-speedier delivery times to widen its defensive moat in its main retail business. That should be a very scary realization for rivals.”

And it mostly has been. Fast forward to last week, when Amazon announced its financial results for the first quarter of 2024. Amazon’s net income surpassed $10 billion for the quarter and would have exceeded $12 billion if not for a $2 billion non-cash expense from its investment in the electric carmaker Rivian. 

On the revenue side, its year-over-year growth rates accelerated across the board, for its AWS, advertising, and core e-commerce divisions, respectively. That’s a revenue acceleration even as AWS is on track to surpass $100 billion in annual sales by the end of 2024, while its investments in what could be a transformational technology of generative AI are just ramping up. The law of large numbers doesn’t seem to be holding AWS back.

Meanwhile, Amazon’s ad business should top $50 billion for the first time in 2024, and that’s with the tech giant just starting to really court TV advertisers to buy ads on Prime Video, thanks to its deal to stream NFL games—and, soon, NBA basketball games too .

Over the decade-plus that I’ve covered this company, it’s become common for stock analysts to ask Amazon officials on earnings calls whether the company is currently operating in more of an investing cycle than a profits one, or vice versa. And on last week’s earnings call, an analyst posed such a question once again. But the answer was much different than ever before.

“I think we’re in a position to do both is the short answer,” Amazon CEO Andy Jassy said on the call. “I think there’s actually an opportunity in our existing large businesses—in the stores business along with advertising and AWS—there’s a lot of growth in front of us. And I think we’re investing in a meaningful way. But I think…we don’t believe that we’re at the end of what we can do in terms of improving our cost structure on the store side.”

For the first time in a very long time—maybe in the company’s 30-year history—Amazon is at a point where it can afford “to do both.” That’s noteworthy.

To be clear, the company is facing myriad challenges, including some self-induced. Its plans to reinvent brick-and-mortar shopping through technology haven’t gone as planned. The Federal Trade Commission’s antitrust lawsuit against Amazon, however unlikely, could someday force the company to overhaul its business or even split it into parts. Amazon’s relationship with the hundreds of thousands of sellers who account for 60% of the company’s product sales has probably never been worse no matter what Amazon’s CEO says . And as the nascent generative AI sector has boomed, Amazon has found itself in some instances trailing competitors. 

But for today, considering the financial results Amazon is showing, and considering the fact that the company is finally at a size that it can, as Jassy said on the earnings call, both invest aggressively in its future while also pumping out real profits, this certainly feels like the Amazon everyone should have feared. 

Jason Del Rey

Want to send thoughts or suggestions to Data Sheet? Drop a line  here .

The rest of today’s Data Sheet was written by David Meyer.

Bad Apple. Apple received backlash for its new iPad advertisement, in which a huge hydraulic press crushes art supplies, musical instruments, and books, transforming them into an iPad. Many social media users have said the commercial and destruction it shows feels “grim” and “horrifying,” because it depicts the replacement of art and creativity with technology, VentureBeat reported.  

xAI funding. Elon Musk’s AI startup xAI is expected to close its funding round as soon as this week, with a valuation of $18 billion , Bloomberg reported. The company is behind the chatbot Grok, which is available on X, formerly Twitter. Musk intends for xAI to compete with OpenAI, the ChatGPT maker he helped found. 

Neuralink issue. Elon Musk’s brain implant company Neuralink experienced a problem with the implant in its first human patient, the Wall Street Journal reported. Some of the threads that record neural activity retracted from the implant, which reduced the amount of data it could collect.

IN OUR FEED

"When the internet first came about, Google didn’t even exist then. We weren't the first company to do search. We weren't the first company to do email. We weren't the first company to build a browser. So I view this AI as—we are in the earliest possible stages."

—Alphabet CEO Sundar Pichai told Bloomberg about the perception that Google missed the AI wave when OpenAI released its large language model ChatGPT.

IN CASE YOU MISSED IT

TikTok will automatically label AI-generated posts using Adobe’s Content Credentials , by Sharon Goldman

Elon Musk’s Tesla quietly slashed over 3,400 job postings, leaving just 3 listed in the U.S. , by Orianna Rosa Royle

Google employees grill Sundar Pichai and CFO Ruth Porat on why they’re not getting pay rises amid blowout earnings , by Eleanor Pringle

OpenAI is touting a new plan to protect creator works—here’s why it won’t actually resolve AI’s copyright crisis , by Sharon Goldman 

CEO Dara Khosrowshahi wants more workers to return to the office—preferably in an Uber , by Marco Quiroz-Gutierrez

Smartphones have taken over our lives and free time—but the process began with the phonograph more than 100 years ago , by Gary S. Cross

BEFORE YOU GO

Succession talks. After 13 years at the helm of Apple, Tim Cook has served as chief executive longer than most Fortune 500 CEOs. While Bloomberg expects Cook to put at least another three years in, he can’t remain in the top spot forever. COO Jeff Williams is a contender, but head of hardware engineering John Ternus has gained favor recently , Bloomberg reported.

This is the web version of Data Sheet, a daily newsletter on the business of tech. Sign up to get it delivered free to your inbox.

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Additional study space available; impeded access to KSL: May 3, 2024

To the Case Western Reserve community,

We are aware that access to Kelvin Smith Library may be impeded, especially for those who use wheelchairs and other assistive devices. To address these concerns as well as provide an additional quiet study space, we are opening Adelbert Gym from 6 p.m. to 6 a.m. daily. The university has set up study areas and enhanced WiFi connectivity in this air-conditioned space. Like all buildings on campus, it will require a CWRU ID to enter.

As a reminder, yesterday we adjusted hours to provide alternate study options, with the closure of Tinkham Veale University Center and Thwing Center after 6 p.m.:

• Leutner Commons’ Division of Student Affairs room and Lower-Level Fireside Lounge will be open 24/7, beginning Friday.
• In Fribley Commons, Elephant Step Inn’s late-night seating area and second floor lounges will have 24/7 access, beginning Friday.
• The Biomedical Research Building cafeteria will remain open until midnight.
• Shuttles will be available throughout the week, 7 a.m. to 11 p.m., to transport to and from Samson Pavilion. As always, Safe Ride is available until 3 a.m. each night.

I appreciate that these interim safety measures may be inconvenient in the midst of final exams, but the safety of our community must be our highest priority.

Eric W. Kaler President

Chronic wasting disease: Death of 2 hunters in US raises concerns of 'zombie deer'

The 2022 report of two hunters who developed neurological diseases after eating potentially infected deer meat has raised concerns 'zombie deer disease' could pass to humans as mad cow disease did..

Two hunters who ate meat from a population of deer known to have chronic wasting disease − or "zombie deer disease" − developed similar neurological conditions and died, raising concerns that it can pass from animals to humans.

Found in deer in northern Colorado and southern Wyoming in the 1990s, chronic wasting disease (CWD) has been recorded in free-ranging deer, elk and moose in at least 32 states across all parts of the continental U.S., according to the U.S. Centers for Disease Control and Prevention .

Deer infected with CWD may be called "zombie deer" because the disease leads to weight loss, lack of coordination, stumbling, listlessness, weight loss, drooling, and lack of fear of people.

The 2022 case did prove that CWD could infect humans. But scientists and health officials have been concerned that CWD could jump to humans as mad cow disease did in the United Kingdom in the 1990s . In 2022, scientists in Canada published a study, based on mice research, suggesting a risk of CWD transmission to humans .

Here's what you need to know about chronic wasting disease and whether you need to worry about it.

Researchers identify troubling case involving 2 deaths

Researchers at the University of Texas Health Science Center at San Antonio have reported how two hunters who ate venison from a deer population known to have CWD died in 2022 after developing sporadic Creutzfeldt-Jakob disease (CJD), which is a neurological disease like CWD.

The second man to die, who was 77, suffered "rapid-onset confusion and aggression," the researchers said, and died within a month despite treatment.

"The patient’s history, including a similar case in his social group, suggests a possible novel animal-to-human transmission of CWD," they wrote in the case report , which was presented earlier this month at the annual meeting of the American Academy of Neurology and published in the peer-reviewed journal Neurology.

The researchers did not say where the men lived or hunted. But the highest concentration of CWD-infected deer can be found in Kansas, Nebraska, Wisconsin and Wyoming, according to CDC and US. Geological Survey reports.

Because of the difficulty in distinguishing between the diseases, the researchers said the case does not represent a proven case of transmission. However, "this cluster emphasizes the need for further investigation into the potential risks of consuming CWD-infected deer and its implications for public health," they wrote.

'Zombie deer disease': What to know about chronic wasting disease and its spread in the US.

What is 'zombie deer disease'? What are prion diseases?

Also known as chronic wasting disease, "zombie deer disease" is a prion disease, a rare, progressive and fatal neurodegenerative disorder that affects deer, elk, moose and other animals, the CDC says.

In prion diseases, the abnormal folding of certain "prion proteins" leads to brain damage and other symptoms, according to the CDC. Prion diseases , which usually progress rapidly and are always fatal, can affect humans and animals. 

Creutzfeldt-Jacob disease (CJD) and variant Creutzfeldt-Jacob disease (vCJD), which is a form of mad cow disease, are prion diseases found in people.

Mad cow disease  is an example of a prion disease that can spread from cattle to humans, and some researchers have likened "zombie deer disease" to it.

For instance, with mad cow disease, it usually took four to six years from infection for cattle to show symptoms, according to the Food and Drug Administration . Deer may have an incubation period of up to two years before the onset of symptoms. So, the animals could have the disease but look normal until the onset of symptoms, such as weight loss, notes the U.S. Geological Survey .

The development of vCJD in humans in the wake of mad cow disease – its official name is bovine spongiform encephalopathy, or BSE – through eating meat from contaminated cattle has concerned scientists about the possible transmission of chronic wasting disease (CWD) to humans.

Can 'zombie deer disease' be transmitted to humans?

Even though there has been no known confirmed case of deer-to-human transmission of "zombie deer disease,' concerns have risen since officials found CWD in a dead deer in Yellowstone National Park in November.

"As of yet, there has been no transmission from deer or elk to humans," Jennifer Mullinax, associate professor of wildlife ecology and management at the University of Maryland, told BBC . "However, given the nature of prions, CDC and other agencies have supported all efforts to keep any prion disease out of the food chain."

Should CWD transmit to humans, it could create a "potential crisis" similar to what mad cow disease caused, Michael Osterholm, director of the Center for Infectious Disease Research and Policy at the University of Minnesota, told BBC .

"However, it’s important to note that BSE and CWD prions differ structurally, and we do not yet know whether the pathology and clinical presentation would be comparable if CWD transmission to humans were to occur," he said.

Meanwhile, chronic wasting disease continues to spread to more states; the most recent is Indiana. The disease was detected this month in a male white-tailed deer in the northeastern part of the state, which borders part of Michigan, where CWD had been detected earlier, according to the Center for Infectious Disease Research and Policy .

The U.S. Geological Survey updated its tracking of chronic wasting disease on Friday to include 33 states (adding Indiana), as well as four Canadian provinces and four other countries (Finland, Norway, Sweden and South Korea).

Contributing: Sara Chernikoff and Julia Gomez

Follow Mike Snider on X and Threads:  @mikesnider  & mikegsnider .

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When Is the Best Time to Work Out?

It’s an age-old question. But a few recent studies have brought us closer to an answer.

By Alexander Nazaryan

What is the best time of day to exercise?

It’s a straightforward question with a frustrating number of answers, based on research results that can be downright contradictory.

The latest piece of evidence came last month from a group of Australian researchers, who argued that evening was the healthiest time to break a sweat, at least for those who are overweight. Their study looked at 30,000 middle-aged people with obesity and found that evening exercisers were 28 percent less likely to die of any cause than those who worked out in the morning or afternoon.

“We were surprised by the gap,” said Angelo Sabag, an exercise physiologist at the University of Sydney who led the study. The team expected to see a benefit from evening workouts, but “we didn’t think the risk reduction would be as pronounced as it was.”

So does that mean that evening swimmers and night runners had the right idea all along?

“It’s not settled,” said Juleen Zierath, a physiologist at the Karolinska Institute in Sweden. “It’s an emerging area of research. We haven’t done all the experiments. We’re learning a lot every month.”

No single study can dictate when you should exercise. For many people, the choice comes down to fitness goals, work schedules and plain old preferences. That said, certain times of day may offer slight advantages, depending on what you hope to achieve.

The case for morning exercise

According to a 2022 study , morning exercise may be especially beneficial for heart health. It may also lead to better sleep .

And when it comes to weight loss, there have been good arguments made for morning workouts. Last year, a study published in the journal Obesity found that people who exercised between the hours of 7 a.m. and 9 a.m. had a lower body mass index than counterparts who exercised in the afternoon or at night, though it did not track them over time, unlike the Australian study, which followed participants for an average of eight years.

Of course, the biggest argument for morning exercise may be purely practical. “For a lot of people, the morning is more convenient,” said Shawn Youngstedt, an exercise science professor at Arizona State University. Even if rising early to work out can be challenging at first , morning exercise won’t get in the way of Zoom meetings, play dates or your latest Netflix binge.

The case for afternoon exercise

A few small studies suggest that the best workout time, at least for elite athletes, might be the least convenient for many of us.

Body temperature, which is lower in the morning but peaks in late afternoon, plays a role in athletic performance. Several recent small studies with competitive athletes suggest that lower body temperature reduces performance (though warm-ups exercises help counter that) and afternoon workouts help them play better and sleep longer .

If you have the luxury of ample time, one small New Zealand study found that it can help to nap first. As far as the rest of us are concerned, a Chinese study of 92,000 people found that the best time to exercise for your heart was between 11 a.m. and 5 p.m.

“The main difference is our population,” Dr. Sabag said. While his study was restricted to obese people, the Chinese study was not. “Individuals with obesity may be more sensitive to the time-of-day effects of exercise,” he said.

The case for evening exercise

This latest study may not settle the debate, but it certainly suggests that those struggling with obesity might benefit from a later workout.

Exercise makes insulin more effective at lowering blood sugar levels, which in turn fends off weight gain and Type 2 diabetes, a common and devastating consequence of obesity.

“In the evening, you are most insulin resistant,” Dr. Sabag said. “So if you can compensate for that natural change in insulin sensitivity by doing exercise,” he explained, you can lower your blood glucose levels, and thus help keep diabetes and cardiovascular disease at bay.

One persistent concern about evening exercise is that vigorous activity can disturb sleep. However, some experts have argued that these concerns have been overstated.

The case that it may not matter

While many of these studies are fascinating, none of them is definitive. For one thing, most are simply showing a correlation between exercise times and health benefits, not identifying them as the cause.

“The definitive study would be to actually randomize people to different times,” Dr. Youngstedt said, which would be phenomenally expensive and difficult for academics.

One thing public health experts do agree on is that most Americans are far too sedentary. And that any movement is good movement.

“Whenever you can exercise,” Dr. Sabag urged. “That is the answer.”

In a recent edition of his newsletter that discussed the Australian study, Arnold Schwarzenegger — bodybuilder, actor, former governor — seemed to agree. He cited a 2023 study suggesting that there really isn’t any difference in outcomes based on which time of day you exercise. In which case, it’s all about what works best for you.

“I will continue to train in the morning,” the former Mr. Universe wrote. “It’s automatic for me.”

Alexander Nazaryan is a science and culture writer who prefers to run in the early evening.

Let Us Help You Pick Your Next Workout

Looking for a new way to get moving we have plenty of options..

What is the best time of day to exercise? A few recent studies have brought us closer to an answer .

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Cycling isn’t just fun. It can also deliver big fitness gains with the right gear and strategy.

VO2 max has become ubiquitous in fitness circles. But what does it measure  and how important is it to know yours?

Is your workout really working for you? Take our quiz to find out .

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Want to build a home gym? These five things can help you transform your space  into a fitness center.

Transform your upper-body workouts with a simple pull-up bar  and an adjustable dumbbell set .

Choosing the best  running shoes  and running gear can be tricky. These tips  make the process easier.

A comfortable sports bra can improve your overall workout experience. These are the best on the market .

Few things are more annoying than ill-fitting, hard-to-use headphones. Here are the best ones for the gym  and for runners .

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The fishy death of Red Lobster

Endless Shrimp didn't sink the seafood chain. Wall Street did.

With the chain on the verge of bankruptcy, it has become abundantly clear that Red Lobster letting customers eat all the shrimp their hearts desire was not a great business idea . It's also not the reason the restaurant is in a deep financial mess .

In mid-April, Bloomberg reported the debt-laden seafood chain and home of beloved cheddar biscuits was considering filing for Chapter 11 bankruptcy protection. Red Lobster is being bogged down by increased labor costs and expensive leases on its restaurants. Some observers were quick to blame the financial woes on its decision last year to make its "Endless Shrimp" promotion, which used to be an occasional, limited-time offering, permanent. The move was not a smart one. While Red Lobster increased traffic somewhat, people coming in to chow down on all-you-can-eat shrimp was a money bleeder. The company blamed Endless Shrimp for its $11 million losses in the third quarter of 2023, and in the fourth quarter, the picture got even worse, with the restaurant chain seeing $12.5 million in operating losses.

But the story about what's gone wrong with Red Lobster is much more complicated than a bunch of stoners pigging out on shrimp (and, later, lobster ) en masse. The brand has been plagued by various problems — waning customer interest, constant leadership turnover, and, as has become a common tale, private equity's meddling in the business.

"If anything, the Endless Shrimp deals are probably as much a symbol of just either desperation or poor management or both," Jonathan Maze, the editor in chief of Restaurant Business Magazine, said.

Red Lobster first opened in Lakeland, Florida, in 1968 and was acquired by the food conglomerate General Mills in 1970. General Mills then spun the chain off in 1995 along with the rest of its restaurant division, which also included Olive Garden, as Darden Restaurants. In 2014, amid flagging sales and pressure from investors, Darden sold Red Lobster for $2.1 billion to Golden Gate Capital, a San Francisco private-equity firm.

If anything, the Endless Shrimp deals are probably as much a symbol of just either desperation or poor management or both.

To raise enough cash to make the deal happen, Golden Gate sold off Red Lobster's real estate to another entity — in this case, a company called American Realty Capital Properties — and then immediately leased the restaurants back. The next year, Red Lobster bought back some sites, but many of its restaurants were suddenly strapped with added rent expenses. Even if Darden had kept Red Lobster, it's not clear it would have taken a different route: A press release from the time says it had contacted buyers to explore such a transaction. But in Maze's view, the sale of the real estate was sort of an original sin for Red Lobster's current troubles. He compared it to throwing out a spare parachute — chances are, you'll be OK, but if the first parachute fails, you're in deep trouble.

"The thing that private equity does is just unload assets and monetize assets. And so they effectively paid for the purchase of Red Lobster by selling the real estate," he said. "It'll probably be fine, generally, but there's going to come a time in which your sales fall, your profitability is challenged, and your debt looks too bad, and then suddenly those leases are going to look awfully ugly."

That time, according to recent reporting, is now. With struggling sales and operational losses, the leases are an added headache that is helping push the company to the brink, though bankruptcy may help Red Lobster get some wiggle room on them.

Eileen Appelbaum, a codirector of the Center for Economic and Policy Research, a progressive think tank, and a longtime private-equity critic, said in 2014 that private equity wouldn't be the solution to Red Lobster's ills. She isn't surprised about how this is all turning out.

"Once they sell the real estate, then the private-equity company is golden, and they've made their money back and probably more than what they paid," she said, noting that this was a common theme in other restaurants and retailers and adding: "The retail apocalypse is all about having your real estate sold out from under you so that you have to pay the rent in good times and in bad."

After the real estate move, Golden Gate sold 25% of the company in 2016 to Thai Union, a Thailand seafood company, for $575 million and unloaded the rest of the company to an investor group called the Seafood Alliance, of which Thai Union was a part, in 2020. Golden Gate likely came out ahead, but the same can't be said for Thai Union, which also controls the Chicken of the Sea brand. It is now looking to get out of its stake in Red Lobster and took a one-time charge of $530 million on its investment in the fourth quarter of last year. In 2021, Red Lobster refinanced its debt, with one of its new lenders being Fortress Investment Group, an investment-management group and private-equity firm. According to Bloomberg, it's one of the "key lenders" involved in debt negotiations now.

Beyond the pandemic-related troubles that hit restaurants across the country , analysts and experts say that Red Lobster's particular problems are attributable to a mix of poor brand positioning and unstable leadership. The seafood-restaurant business is a tough one in the US, and people who are hankering for lobster or fish are increasingly going to steak houses that offer those options, said Darren Tristano, the CEO and founder of Foodservice Results, a food-industry consultancy.

"What's truly happened with Red Lobster is that the consumer base has changed and Red Lobster hasn't," he said. "Red Lobster isn't losing to a competitor in their space — they're losing to competitors outside their space."

John Gordon, a restaurant analyst in San Diego, said Red Lobster had been on the decline for 20 years but that it didn't "fall on the knife" until Thai Union got it. "They were totally unprepared to hold a casual-dining restaurant," he said. Kim Lopdrup, Red Lobster's longtime CEO, retired in 2021, and since then, the restaurant hasn't had much in the way of stable leadership. His successor resigned after only a matter of months, and the role remained vacant for more than a year before someone else was appointed. He's left, too, and now Jonathan Tibus, an expert in restructuring, is at the helm.

"One of the problems is that Thai Union just had no credibility in terms of recruiting a new CEO," Gordon said.

Essentially, Red Lobster finds itself in a landscape where there just aren't a lot of bright spots. Add on the weight of the debt and lease obligations the company's private-equity owners saddled the brand with, and a turnaround becomes a gargantuan task.

"It's hard to blame leadership when you have a problem that is unsolvable — I mean, getting the consumer back in the door, increasing traffic. All-you-can-eat shrimp can only do so much," Tristano said.

Red Lobster did not respond to a request for comment for this story. Golden Gate declined to comment. Thai Union pointed to a press release about its intention to exit its investment and said it didn't wish to comment further.

One bad promotion should not doom a restaurant chain like that.

As to what drove Red Lobster to the edge, it's clear that despite not being a very good idea, the blame doesn't fall on Endless Shrimp. Years of changing tastes, tough industry conditions, and poor brand management all contributed to the chain's difficult position. But plenty of other restaurants have faced similar issues and aren't on the verge of bankruptcy. What separates Red Lobster is a decade of private-equity and investor tampering. Pinging from owner to owner makes it hard to settle on a turnaround vision. The company faces challenges that necessitate a long-term view that requires patience — the kind that the short-term-focused Wall Street often struggles to tackle. Whether Red Lobster can turn it around from here remains to be seen: Even if it files for bankruptcy protection, the chain may not disappear. Plenty of companies go bankrupt and keep on keeping on.

"You've got to at least be able to pay your bills, and what's happened over the last five years is the cost of operating a restaurant has taken off," Maze said. "One bad promotion should not doom a restaurant chain like that."

Emily Stewart is a senior correspondent at Business Insider, writing about business and the economy.

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