Amazon Go vs Alibaba Tao Cafe: Staffless Shop Showdown

The staffless shop — where grab-and-go automated payment replaces checkout lines — is a futuristic retail experience envisioned by e-commerce moguls Amazon and Alibaba. Last July Alibaba showcased its proof-of-concept Tao Cafe in Hangzhou, while in downtown Seattle today Amazon opened its staff-free convenience store Amazon Go.

Amazon and Alibaba’s brick-and-mortar-but-no-staff shops offer very different user experiences. To bring you first-hand feedback, Synced visited them.

Both shops require customers to use a dedicated mobile app to link to shopping accounts. Customers can then enter the shop by displaying a generated QR code to a scanner. But that’s where the similarities end.

Amazon Go is a convenience store selling snacks, drinks, lunch boxes, salads and sandwiches. Its customers will likely be local office workers (and probably more than a few tech heads).

Amazon Go uses a system called “Just Walk Out,” a first of its kind shopping technology that lets customers select anything from the inventory and leave the store without additional steps. Powered by computer vision, deep learning algorithms and sensor fusion, the system is able to recognize what items which customers have taken in real-time. A backend system then automatically processes the transaction. A Synced reporter tried shutting down their smartphone at the store, but this did not impact the transaction.

One of the concerns with “Just Walk Out” is the high computational power required for detection and processing. Amazon Go was reportedly incapable of accommodating more than 20 customers at a time during testing. On opening day Synced observed at least 50 in-store customers, although Amazon staff started to limit traffic when the number exceeded 60.

Setting up an unstaffed shop is not cheap — Amazon Go is equipped with hundreds of cameras and sensor arrays costing millions of dollars. Amazon has however priced the merchandise competitively, a 500ml bottle of water for example costs US$0.49, about the same as in other stores.

Tao Caffe meanwhile is a staffless cafeteria and boutique located in Hangzhou, selling drinks and snacks as well as products such as backpacks, notebooks, plush toys, etc. It is only open to users of Alibaba’s e-commerce site Taobao.

Technically, Tao Cafe is not entirely staffless — flesh-and-blood waiters take the orders and baristas make the drinks. Like Amazon Go, Tao Cafe enables customers to shop without directly paying, but does this in a very different way.

For the purchase of drinks, a facial recognition-enabled camera system at the service counter automatically identifies the customer, links to their account, and processes the payment. Customers buying merchandise exit through a processing chamber equipped with multiple sensors, which identifies both the customer and the merchandise they have. The scan works even if the customer has put the goods in pocket or a bag.

Synced observed however that customers required about 10-15 seconds to leave Tao Cafe, this occasionally creating a lineup for the exit scanners where only one customer could pass at a time. Amazon Go had no such bottleneck issues.

Amazon also has an advantage over Alibaba at this stage because Amazon Go is open to the public, while Tao Cafe remains something of a randomly recurring pop-up. While it’s still too early to say who will win the battle of the staffless store, it’s clear that neither of these multi-million-dollar experiments will generate any profit in the short term.

Both companies have invested heavily in brick-and-mortar retail development over the last year: Amazon acquired American supermarket chain Whole Foods for US$13.7 billion, while Alibaba announced an investment of US$2.88 billion for a 36% stake in Gao Xin Retail, China’s largest and fastest-growing hypermarket operator.

With payroll costs rising and sensor costs falling, more staffless stores are bound to pop up in 2018.

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Journalist: Tony Peng | Editor: Michael Sarazen