Amazon Go…to go or not to go?

 

The “future of grocery shopping” was on full display as the e-commerce giant, Amazon, opened the first of its checkout free convenience stores known as Amazon Go. People walking into the high tech store were able to browse grocery staples like bread and milk, a variety of different snacks, and even chef-inspired meals that can be prepared at home in around 30 minutes.  After selecting what they want, they proceed to put Amazon Go’s motto into action and “Just walk out shopping.”

 

Amazon has proven to be on the cutting edge of retail technology before.  In fact, many of its offerings have quickly become part of our everyday consumer experience. From ordering textbooks to toilet paper with Amazon Prime , to having fresh food delivered to your door through Amazon Fresh, this online beast has revolutionized the way we buy.  

 

And Amazon Go is no exception.

 

The technology is pretty amazing. Shoppers need to have an Amazon account and the Amazon Go app on their phones. They scan the app on electronic turnstiles upon entering, grab what they want, and just walk out.

 

The shelves are lined with hundreds of high tech sensors, and the store is filled with discreetly placed cameras which record all the items being placed in bags, pockets, or in purses. The items removed are linked to the shopper’s Amazon account and they get charged for what they’ve taken.  It’s all really slick.

 

In fact, a little too slick for this guy’s liking.

 

Use Your Mind

Now you need to know that I’m not some anti-technology Luddite. I like technology. Really, I do. I have a smartphone and I “do that texty thing” as my mom would say. I order from Amazon and I mean, I have a blog.  Come on. I am NOT anti-technology.

 

What I am is anti-mindlessness. And that’s what concerns me about Amazon Go.

 

A Pain In The Mind

There has been extensive research done into the spending habits of consumers. In fact, the economy depends heavily on some of the tactics that retailers use to get us to spend more dollars and more often.

 

Specifically, research has shown that there is a direct link between how much we spend and how much pain we feel when spending. In short, when the pain of paying is less, we spend more, experience greater joy from the activity or purchase, and generally have more warm fuzzy feelings afterward.

 

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In other words, we get more pleasure from the purchase and are more likely to engage in it again.

 

Colonoscopies and Painful Endings

In his book, Dollars and Sense: How We Misthink Money and How to Spend Smarter, author Dan Ariely describes how the ending of an experience can dramatically alter the overall remembrance of it.  He details an experiment done by Nobel Prize winning psychologist Daniel Kahneman (author of the bestselling book Thinking, Fast and Slow), Donald Redelmeier and Joel Katz in which they looked at how the ending to a colonoscopy affected the patients’ overall perception of the experience. Some patients were given the standard ending to the procedure. Others were given a 5 minute addition which made the colonoscopy longer but was less painful than the previous portion of the procedure.

 

What did they find? Patients who had the 5 minute addition remembered the procedure in a much more positive light than those who did not have the less painful ending.

 

Ummm, What Does This Have To Do With Amazon Go?

Now you may be saying, “I thought this article was about Amazon Go and now we’re talking about colonoscopies? What’s going on here?”

 

Stick with me.

 

Both the Amazon Go shopper and the colonoscopy patient were impacted by the way the experience ended. The ending of an event deeply colours how it is experienced and remembered by the participant.

 

In the colonoscopy, the less painful ending made the overall procedure seem more “pleasant”. I’ve never had a colonoscopy, so I use the word pleasant very loosely.

 

For the Amazon Go shopper, there’s no scanning the checkouts to see which lineup is shorter. No losing your mind as the lady in front of you fumbles her way through her purse looking for the coupon to save 25 cents on toilet paper. No frustration, aggravation or annoyance. As Amazon Go says, “Just walk out shopping.”

 

Just Walk Out…And Feel No Pain

There’s also no pain of paying. Not physical pain, but the mental discomfort research has shown occurs when we have to buy something.

 

This research also demonstrates that delaying payment increases the pleasure of consuming things. The basic idea is that when the pain experienced from paying is “de-coupled” or separated from the actual consumption of the product or service, people enjoy the overall experience more.

 

That’s one reason why paying for things with credit cards is so deadly. If I want to buy something with my credit card, say a new bike, I go out and buy it. I have 2-4 weeks of cruising around on my new wheels, having all my friends admire my sweet ride, and experiencing the joy and exhilaration of zipping around on my shiny new two-wheeler before I have to face the painful reality of actually paying.

 

And because of the long duration between my initial experience and the payment, I am much less likely to feel the pain of paying.

 

Feels Like Stealing, With One Small Catch

An Amazon Go set-up takes the separation of payment and consumption to a new level. With this retail model, consumers don’t even need to think about paying. Just walk in, grab what you need, and walk out. It’s so easy. It almost feels like stealing.

 

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Nothin’ to see here…

 

And it almost is, with one small catch.  You absolutely do have to pay. And you’ll probably end up paying more than you think.

 

What we know is that when people separate paying and consumption by using technologies like credit cards, for example, they spend far more than they would if they were using cash.

 

In this new retail model, not only will people spend more due to the lack of pain when paying, but it makes the overall retail experience that much more pleasurable. You don’t have to scan the checkout lines for the shortest one.  There’s no need to look at people’s carts and try to estimate which line will move the quickest. And in our fast food, I want it now culture, you don’t need to exercise even the tiniest amount of patience of self-control.

 

Which is great for Amazon and retailers who will surely follow suit. And it can be awesome for consumers too.

 

Enjoy, But Be Aware

I’m not against a more enjoyable retail experience. I love the ease of buying things through online retailers like Amazon.  Having them delivered to my door is so much nicer than that nasty business of going to malls and stores and such. I’ve been known to frequent drive-thrus, have my pizza delivered to my door too from time to time.

 

What I am against is mindless spending. Unless you’ve been living under a rock, you know we’re not exactly in good shape as a continent financially. We’re drowning in debt and floundering with our finances.

 

But it is the 21st century and this technology is likely the wave of the future. We can reminisce about the good old days with cashiers and cash, or we can intentionally build mindful habits when it comes to our spending. This means even more reasons to shop with a list, track your spending, and be aware of the psychological tactics retailers use to get us to spend.

 

It also includes intentionally building mindful money behaviours like taking time to reflect on your spending habits and whether they are in line with your values and goals.

 

In the end, the convenience of retail stores like Amazon Go simply stack the deck in order to make mindless spending much easier. And ultimately, it is these types of mindless financial behaviours that get people in trouble, whether it’s going further into debt or a grabbing a doughnut from Amazon Go.

Mindful attention to our money–our earning, spending, saving, investing, and giving–is the gatekeeper to financial independence. And it is the one thing we truly can’t afford to ignore any longer.

 

What do you think about Amazon Go? What are your thoughts on the future of retail using this technology? Let me know in the comments or on Twitter @method_money or on Facebook @methodtoyourmoney.

2 thoughts on “Amazon Go…to go or not to go?

  1. I’m one of those oddballs who actually spends more if I have cash – but regardless of the type of payment, I HAVE to write down every single purchase in a separate list in order to really pay attention. I have no particular gripe with AmazonGo, except for it seems totally creepy and over the top.

    1. Angela,

      That’s basically how I feel about Amazon Go. I don’t mind the technology, but I just want people to go in with eyes wide open. If you’re looking for an app to help you track your spending we use EveryDollar. It’s really great. It’s free if you don’t link to your bank account (which we don’t) and it’s super easy to use and quick. It has made our monthly budgeting meetings way quicker and less painless.

      Thanks for taking the time to check out the post and comment! -Matt

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