Tech's Convenience Store : Planet Money Amazon is opening new stores — in the real world. And in true Big Tech fashion the experience is meant to emphasize convenience. All you need to do is walk in, grab your stuff, and go.
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Tech's Convenience Store

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Tech's Convenience Store

Tech's Convenience Store

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UNIDENTIFIED PERSON #1: This is THE INDICATOR FROM PLANET MONEY on NPR.

SALLY HERSHIPS, HOST:

A couple of weeks ago, Cardiff and I went shopping.

Oh, my God.

CARDIFF GARCIA, HOST:

We're here. We are near the corner of 49th Street and Park Ave in Manhattan. And yeah, I'm excited to do this. I've never been in one of these before.

So you know the company Amazon - amazon.com, Amazon Prime - famous for selling stuff online. Well, it's now opening stores IRL - in real life - stores in Chicago, New York, Seattle. These are, like, tiny convenience stores, sort of like a 7-Eleven where you can just walk in, grab a gallon of milk or whatever. But because this is Amazon we're talking about, the new stores are high-tech and a little different.

I can see the scanners in front of me.

HERSHIPS: Do you have your iPhone ready?

GARCIA: I have my Amazon Go app, and I'm about to try it. All right. Ready?

UNIDENTIFIED PERSON #2: Yeah.

HERSHIPS: The new stores are called Amazon Go because after you grab your stuff, you just leave.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED ANNOUNCER: What would shopping look like if you could walk into a store, grab what you want and just go?

HERSHIPS: That would look like stealing.

GARCIA: Yeah, it would feel creepy (laughter).

HERSHIPS: In the new stores, there are no cashiers. There are no checkout counters. There are no self-checkout scanners, either. You take stuff off the shelf and out of the store and somehow, Amazon figures out what you have, and it charges you.

GARCIA: These new stores - they do mean convenience. And they also raise some big issues.

I'm Cardiff Garcia.

HERSHIPS: And I'm Sally Herships, in for Stacey Vanek Smith. Today on THE INDICATOR FROM PLANET MONEY, a global retail giant gets into the convenience store game, which has us thinking a lot of thoughts about consumer privacy and asking two big questions. First, what does this mean for small businesses? And second, if we no longer need humans to run checkout, what is going to happen to all those jobs?

(SOUNDBITE OF MUSIC)

HERSHIPS: The new Amazon store is nice. The store is high-tech. It's clean. There are turnstiles in the front. Cardiff, you downloaded the Amazon Go app, which is what most shoppers do here.

All right. Well, Cardiff, you have to scan us in.

GARCIA: Yes.

HERSHIPS: Says go.

Inside, there's the typical stuff you often run into a convenience store to buy. I see cookies and crackers and sandwiches. But Cardiff, you were on a mission.

GARCIA: Do they have - are cronuts still a thing? People still buy those? I'm definitely walking out with a cronut if that's what they have here.

Look. I didn't know. It looked like they might have a cronut in there, OK? This store has some nice stuff, items that you do not find in a typical convenience store. Like, there were meal kits, organic butter from Ireland and a steak section in the freezer. And here's something else. The ceiling is lined with cameras and sensors, which brings us to a big question. How does Amazon know what products we were taking off the shelf and walking out of the store with?

HERSHIPS: Yeah. Our producer Darius Rafieyan caught a case of consumer indecision. So he was, like, taking things off the shelf, putting them back, taking them off.

Oh, my God. OK. What do you want? Do you want something? Cardiff's paying.

GARCIA: I just can't tell if this is a cronut or not.

DARIUS RAFIEYAN, BYLINE: But the chicken salad on Shabbat - I don't know. Is that - we - I...

HERSHIPS: So Cardiff, we're taking a sandwich off of the shelf. This is the moment. Is it going to go into your cart?

Here is how Amazon explains its process.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED PERSON #3: The green circles represent anonymized 3D point clouds, which are the output of the computer vision algorithm's prediction of customer account location.

GARCIA: Don't understand a word they just said.

HERSHIPS: I mean, to be fair, if we were engineers, this would all make sense. But I'm not.

GARCIA: Here's what we do know, though. Amazon's system represents a trade-off that we often make when we use technology. As consumers, we supply our data in return for convenience. When we shop at Amazon and other online retailers, those companies are collecting information on you, which they think they can sell or use to bombard you with targeted ads or ideas for what to buy next.

Now, we asked Amazon if our data was being mined while we were shopping in the store, and they hadn't responded by the time this podcast went to air. But if data mining has started happening more in the real world, it would represent a kind of shift.

HERSHIPS: Yeah. So far, shopping in the real world has been a holdout, right? It's a place where you can still use cash. You can still buy stuff that maybe you don't want tracked.

GARCIA: Yeah, some people go into a store, and maybe they just want to pay cash because they're buying a sensitive item that you don't want other people to know about, like if you're buying a pregnancy test or condoms. So imagine if all stores started tracking all of your purchases.

Now, we should note, though, that Amazon does say it is planning to accept cash at all of its stores. Sally, you talked to a spokesperson from Amazon.

HERSHIPS: Yeah, the company is not releasing a ton of details, but what she would say is that Amazon is not using facial recognition. It's not collecting biometrics. And the company also says it only stores the data it collects long enough to get you your receipt. That's it.

GARCIA: But how Amazon gets you that receipt does bring us to our next question. So question number two - if humans are no longer checking us out at the register, what's going to happen to all those jobs - all those cashier jobs?

Heidi Shierholz is senior economist at the Economic Policy Institute.

HEIDI SHIERHOLZ: I spend my life, my career worrying about, like, how is the economy doing for low- and middle-income people? And I am not worried about this.

HERSHIPS: Heidi says we have a lot of experience with automation coming in and changing the workplace.

SHIERHOLZ: In the early 1800s, over 80% of our labor market was in agriculture. So if you would've been sort of a futurist at that times, you would've gone, oh, my goodness, we're going to lose all of these jobs. And you would've, in some ways, been absolutely right because now, less than 2% of our labor force is working in agriculture.

GARCIA: Instead, they now work in other industries. Heidi says that what we find is that automation has never caused a sustained decline in the overall number of jobs. And you might be wondering, how is that possible? Well, think about it. When a company like Amazon uses tech instead of human workers, it can now sell its products more cheaply to consumers. And that starts a process where consumers have more leftover cash to buy other things. And when they buy those other things, that generates economic activity, and that brings new jobs to those sectors.

HERSHIPS: And Amazon says it isn't reducing or eliminating jobs. It's just shifting the jobs its workers do, like having them work as greeters at its stores - which brings us to our next question. How are small-business owners - the kind that often run convenience stores - going to be impacted by Amazon moving in on their turf?

JONATHAN BOWLES: The initial reaction of so many small businesses is just going to be, oh, brother.

GARCIA: Jonathan Bowles is executive director at the Center for an Urban Future.

BOWLES: You know, we survived 7-Eleven. We survived the expansion of all these national drugstore chains, and now we've got to deal with this.

HERSHIPS: Right around the corner from Amazon's new store is a local deli. It's a small business. And Cardiff, you know, they told us they didn't want to go on tape, but they were not psyched about Amazon. The company represents major competition for them.

Now, I'm going to go on a little rant here. I love shopping at my local deli. It is run by this Korean family - mom, grandparents, kids. One of the sons just got married, and his wife is from Syria. So now the store is selling hummus, which they make fresh. I've been going there for years. Like, the deli owner, Sandra - she saw me go through a divorce. She asks about my mom. It's part of this wonderful kind of social fabric.

And Jonathan - he sees this a little differently, but he agrees that having small-business owners who are members of a community - that can be really important.

BOWLES: When you shop at a bodega or a small business, your money is staying in the community. Oftentime (ph), that small business or bodega owner is sponsoring a Little League team or being part of the community. They're investing or spending money on local workers. They're putting money into the community by spending things that they earn at the business.

GARCIA: Sally, I got to complicate the narrative a little bit here, to be honest with you. I actually kind of like the Amazon Go store. I've been back since a few times.

HERSHIPS: What?

GARCIA: I know. I like it. I don't know what to tell you. It's a good product. It's a good service.

HERSHIPS: As a native New Yorker, I find this alarming.

GARCIA: Fine. Jonathan says that if too many national chains move in and displace small businesses, that could cause another problem.

BOWLES: When it tips too far in that direction, when the unique, independent small businesses are so crowded out where we've mostly got those national businesses - is just a much less interesting place to be.

GARCIA: Our shopping experience - I got to say it was pretty smooth, though.

HERSHIPS: All right. We did it. We went shopping at the Amazon Go store.

GARCIA: Our receipt showed up - four items. And it even tells us how much time we were in the store.

HERSHIPS: That's kind of creepy.

GARCIA: Yeah - 10 minutes, 1 second.

HERSHIPS: Which is the limit for this podcast.

GARCIA: Yep.

HERSHIPS: Thanks for listening. Before we go, Cardiff...

GARCIA: Yeah.

HERSHIPS: ...Did you ever get your cronut?

GARCIA: Apparently caramelized croissants with tender layers within.

RAFIEYAN: I feel like that describes you. You have tender layers within, too.

GARCIA: I know.

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