The Impact of Amazon GO on Black Society

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Most of you know that I work in the tech industry and I’ve talked about how more black people need to become involved in tech because across the entire tech industry, it’s probably less than 10% black people total who in work in tech.  For those not familiar with exactly what the tech sector encompasses, let’s just say it’s everything from the people who make the apps on your phone, to the people who make your phone, laptops & tablets, to the people who work at your local cable company to provide you broadband services, all the way to the self-checkout kiosks you find at Walmart or McDonalds…and on & on & on this list could go.  Basically, tech is everywhere in all industries in some form or fashion.

So I want to talk about this new store concept that Amazon is putting together called Amazon GO.  In case you are not familiar with Amazon GO, it’s a convenience store business model to where you can go in and grab some food or a few items here & there and literally just walk out of the store without even having to deal with a cashier or a self-checkout kiosk.  Basically what happens is, you when you walk into the store, you check in by presenting an app on your phone to scan on a turnstile type of contraption.  Once you are in there, you go shopping for whatever items you want.  After you are done shopping you literally just walk out through the turnstile and then moments later you are billed and sent a receipt directly to your phone showing you what you purchased, how much it cost and how long you spent inside of the store.  The whole concept of this store is to get people in & out of the store as quickly as possible so that they can go about their business instead of standing in line.  To my knowledge there are 3 of these stores currently open:  2 in Seattle and 1 in Chicago.  Amazon has plans of opening as many as 3000 of these stores nationwide by the year 2021.  Here’s another interesting aspect for those of you who are steadily fighting to have the minimum wage increased to $15/hr nationwide, this technology that Amazon has developed in combination with the advancements in automation is going to put approximately 7.5 million retail jobs in potential jeopardy.  So if you are black, you may want to seriously reconsider your future endeavors of becoming the next rap star or social media famous personality and actually start learning a skill that is in demand and will be in demand for the foreseeable future.  A skill more so along the lines of STEM because at least as far as tech is concerned, there will always be a demand for these people in some shape or form because somebody has to be there to program, install & maintain these machines or other facets that surround their functionality, like people who deal with cloud based technologies that more than likely store the data these machines are collecting from people…think services like Amazon Web Services, Microsoft Azure and & Google Cloud for example.  

Will this type of technology totally eradicate unnecessary jobs like cashiers?  Not completely and if it does, that isn’t probably going to happen for a few more decades to where people will literally be able to walk into any store in America and not see one cashier.  As a matter of fact, whether you realize this or not, you are already being primed for that reality every single time you walk into a Walmart.  Every single time you step foot into Walmart no matter what time of day it is, you’ll see about 20 cashier lines with maybe 4 cashiers working and about 50 people standing in line ready to check out.  On the other side of those empty cashier lines you’ll see about 8 self-checkout kiosks being managed by 1 or 2 attendants and those 8 self-checkout kiosks have people moving in and in out way faster than the 15 items or less speedy checkout lines.  What normally tends to happen is people will get into those cashier lines and stand there looking depressed wishing the line would move faster as they are all sitting around wondering how come Walmart doesn’t put more cashiers on those empty registers.  Well, places like Walmart, Home Depot & even now McDonalds, they are literally training you to get accustomed to checking out of a store that doesn’t require any cashiers; like these same cashiers who all want $15/hr but don’t really provide you with $15/hr worth of service as they are ringing up your items.  What’s going to end up happening is, as the price of these kiosk machines start getting even cheaper, you’re eventually going to see more kiosk machines in place than empty cashier lines to the point where one day you won’t see any cashiers at all.  Once that happens, this is going to spread like wildfire to other grocery and convenience stores.  These Amazon GO stores have taken the vision to the next level and the idea of having a store that doesn’t even have a self-checkout kiosk is a ways off from becoming a standard in every store that you see mostly due to the expenses associated with the technology.  If you are unfamiliar with how the technology in these Amazon GO stores function, basically after you scan into the store, your every movement is literally being tracked by multiple cameras to create some 3-d image rendition of your body to separate your body from other patrons in the store so that Amazon can accurately see grabbed what off of what shelf so that they can appropriately charge the right person.  The technology is so ridiculous that even the shelves have built in sensors to monitor the weight of the shelves to let the system know if an item was picked up or placed back down on the shelf.  Overall, it’s pretty high tech stuff, but they say the cost to get one Amazon GO store up and running in terms of just installing the technology costs around $1M.  Until Amazon can find a way to drastically reduce that cost (which they more than likely will), just random stores having no cashiers or kiosks is not going to be a reality anytime soon, but stores with hardly any or no cashiers at in all in favor of a self-checkout kiosk is a reality and will be replacing a lot of low skill minimum wage workers who work those jobs.  Why?  Because it is literally cheaper to replace a human with a kiosk.

A basic self-checkout kiosk machine that you would find in Walmart or Home Depot costs on average $20k-$25K a piece.  If you get a self-checkout kiosk section with 4 or 5 of those machines, you’re looking at about an $80k-$125k upfront investment.  Let’s just say a store has 1 kiosk for math simplicity.  One kiosk costs you $20k.  The national minimum wage right now is $7.25/hr which translates into about $15K per year.  If the national minimum wage was bumped up to $15/hr, that would translate into about $31K per year.  If you own Walmart, Home Depot or some other store that traditionally has a staff of cashiers, what makes more sense for your bottom line at the end of the day?  Spending an upfront cost of $20K on a machine plus maintenance fees or spending anywhere between $15k and $31K per year on a human being?  Now to help put things into perspective here, the machine doesn’t take days off, it doesn’t get sick, it doesn’t show up late, it doesn’t give you attitude, it doesn’t need healthcare benefits and it’s not about be online or in the real world demanding a pay increase.  Plus this machine can literally work 24 hours 7 days a week for probably 5 years non-stop before it needs to be replaced or upgraded.  Meanwhile, the human cashier needs days off, sick days, vacation days, some type of health insurance, might show up late, might not show up at all, needs a lunch break, and the human cashier will eventually want a pay increase.  Plus, if you examine the costs of paying a human cashier over the course of 5 years versus that of installing a kiosk, well, over the course of 5 years if you’re paying a cashier the current minimum wage of $7.25/hr, you would have paid that cashier $75K.  If that cashier is making $15/hr, over 5 years you would have paid that cashier $155K.  If you simply spent $20K on that kiosk, well you might be looking at maybe $50K total over the course of 5 years, that includes the upfront purchase of the machine and any costs that maybe associated with maintaining & upgrading the machine.  I’m saying $50K purposely because I honestly have no clue as to how much money it takes to maintain one of those machines, but I’m just going to assume that those machines probably don’t cost that much to maintain because they are more than likely designed to deal with the stress placed upon it from shoppers etc.  Regardless, let’s just roll with $50k in total.  So once again, if you own Walmart, Home Depot or some other store and you are thinking about ways to reduce your costs and increase your profits, well one for sure way is to simply replace your cashiers with self-checkout kiosk machines.  And like I said, this is just phase 1.  Once Amazon works out the kinks associated with lowering the price of setting up these Amazon GO stores and they eventually start licensing out the technology (which they more than likely will), stores that have phased out cashiers in favor of kiosks will eventually phase out kiosks in favor of this Amazon GO technology to where the only humans they will need working in the stores will be one or two managers & a few people to stock the shelves.  That’s it for the most part.  The other jobs that will be associated with this type of technology that will actually pay above average salaries will be the tech people responsible for putting this tech infrastructure in place and maintaining it.  Everybody from the person who installs the camera and sensors in the store, to the person who writes the code for the app to scan into the store, to the person tasked with setting up the cat-5 cables and Wi-Fi access points that all tie into a switch which will connect to a router which will then be transmitted over a VPN tunnel which will travel over a fiber optic system or satellite system leading back to a database somewhere in the cloud where you’ll have another team in charge of maintaining the cloud etc.  Basically, from the time you enter an Amazon GO or a store that will adopt the Amazon GO business model (which more than likely will happen), you are going to be entering an environment driven & directed by some form of technology.  This same tech industry that has probably less than 10% black people involved in it across the board. 😕

Now I have to talk about the pro-black babblers of the world who like to terrify black people with non-stop talk of race wars and white supremacy all day long and how black people “NEED TO PRACTICE GROUP ECONOMICS AND BUILD!”  Well here’s my question; if knee grows are not learning STEM, in particular tech, then how are you going to effectively compete?  One of the reasons small towns don’t like Walmart opening up shop is because Walmart kills small mom & pop shops because they just simply cannot compete with prices Walmart offers.  So if you are one of these “SUPPORT BLACK BUSINESSES!” type of people (which is very noble and I’m not knocking the idea of supporting black businesses), but if your business can’t afford to keep up with trends in technology by either adopting kiosk technology or adopting this Amazon GO business model when Amazon figures out how to drastically reduce the prices, how are you going to effectively compete once Walmart or some other business pops up who can offer more services and products that directly compete with your business but their business doesn’t have the unnecessary overhead you have?  You know like, paying cashiers to do what a machine can do better?  If you are pro-black babbler babbling all day long about white supremacy and race wars but yet you are literally not doing anything to learn the necessary skills that are going to start changing the landscape of the American and global economy in the coming decades, then how can you honestly compete?  I just told you I work in tech and I just told you across the board it’s probably less than 10% black people total in tech and I keep saying “probably” on purpose because I wrote a blog not too long ago on STEM to where I stated that black people and hispanics combined make up about 14% of the total tech population.  So when I say it’s less that 10%, I’m really just dividing that 14% number in half which gives me 7% but then I’m bumping that number up 3 points to make 10%, but regardless, I’m probably not that far off in my calculation.  The point is, how are you going to compete against these scary white supremacists who are just getting more and more technologically advanced to effectively wipe you out on any battle field you believe a battle is taking place?  Most of you believe the battle will be more of an economic one.  Well, if you are not engaged in the driving forces that are constantly reshaping the economy nationally and globally, then how are you going to compete?  You can talk about opening up a business all day long, which there is nothing wrong with that, but as we continually progress into the 21st century as technology keeps evolving, if you yourself or somebody on your team is not fluent in tech in some fashion, then how are you going to compete against these stores that don’t need cashiers and will eventually transition to the Amazon GO business model?  How?  I just don’t see how it’s possible with only less than 10% of the tech industry being black people.