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A Case For Amazon's New Brick-and-Mortar Stores

December 04, 2016 00:00 AM UTC
- Updated September 02, 2020 11:36 AM UTC

Amazon is debuting its new 'Amazon Go’ stores, and Fortune’s Andrew Nusca and Robert Hackett are here to give their takes.

Transcript
[THEME MUSIC] ANDREW NUSCA: Welcome to Fortune Tech Debate where we debate the issues of the day in two minutes. Today, we are talking about Amazon's new Go grocery store. All right. Let's put two minutes on the clock. Well, obviously, Bob, go. ROBERT HACKETT: All right. So Amazon is opening roboticized grocery stores. They're going to be filled with sensors and with artificial intelligence algorithms- ANDREW NUSCA: Bring it on. ROBERT HACKETT: --to track your movements and get rid of the checkout line at the end, which is a great idea. But I'm skeptical here. As much as I hate waiting on checkout lines, I think that Amazon is unproven in the brick and mortar shop industry. ANDREW NUSCA: No, come on. It's bookstores. ROBERT HACKETT: They're an online company. ANDREW NUSCA: Look, Amazon opened those beautiful bookstores. They're unlike any bookstore you've ever been to. Instead of them stacked along the on the edges, the bindings, they're front facing, they're beautiful, and the idea being your kind of show rooming books. Right. You can order them on Amazon. And why wouldn't you-- ROBERT HACKETT: It's pretty. ANDREW NUSCA: --want to do this with a grocery store? Who needs people? ROBERT HACKETT: It's pretty, but look, we need scale here. And that's why Amazon has been such a juggernaut in e-commerce, it's because it's digital, it's online. They don't have the physical-- ANDREW NUSCA: You're making my points for me. ROBERT HACKETT: --stores as boundaries, holding them down, weighing them down, and filling them with-- [INTERPOSING VOICES] ANDREW NUSCA: What weighs them down are human's salaries. Right. I'm sorry, but we're expensive, we people. And Amazon doesn't want to pay for that. They'd rather pay for a robot. And why not do a grocery store? This is a $600 billion industry. ROBERT HACKETT: That's a big industry. That is a lot of money up grabs. ANDREW NUSCA: It is the largest part of the retail industry. Obviously, Amazon is a retail behemoth. Why wouldn't it want to get in there. And the beautiful thing, it's got a distribution network right. That's what makes it so powerful. These are essentially just-- [INTERPOSING VOICES] ROBERT HACKETT: Hey, look. If Amazon now starts coming out with these stores, that's going to eat into their other businesses of delivering things to people at home at the last hour. [INTERPOSING VOICES] ANDREW NUSCA: No, no, no, no. ROBERT HACKETT: And plus they're going to have serious competition. Look, Walmart is the number one Fortune 500 company. It has been so for a years. It is an absolute behemoth in the space. ANDREW NUSCA: It has had a hard time knitting together its e-commerce initiatives with its brick and mortar. Does Walmart have more impressive brick and mortar presence? Absolutely. ROBERT HACKETT: That may be true, but-- ANDREW NUSCA: But it can't integrate it with an app. ROBERT HACKETT: It has a lot of properties, it has a huge footprint across the US. It could turn up this algorithms. ANDREW NUSCA: And not a whole lot of artificial intelligence, machine learning, sensors, data. I'm in with that. [INTERPOSING VOICES] ANDREW NUSCA: Looks like we're out of time. All right. Come to fortune.com for more Tech Debate. [THEME MUSIC]