APU Business Original

Amazon Unveils RFID Technology for ‘Shop and Go’ Consumers

Radio Frequency Identification (RFID) tags or chips are the data foundation for the retail and wholesale movement of goods. For years, Amazon has used RFID tags on boxes and other items in its logistics centers for tracking, packing, and shipping.

Most recently, Amazon has expanded its push into the retail marketplace with stores that do not have checkout counters or checkout clerks. Amazon’s stores are called Amazon Go and Amazon Fresh, and the giant company is entering the retail grocery business with the Amazon Go grocery store.

The Invisible Cashier – RFID

Now what does RFID technology look like? Figure 1 shows two RFID tags. The first type of RFID tag is passive, meaning that it has no battery but it does have antennas. The energy to activate the tag comes from a radio signal that can be detected by a reader that is held close to that tag. The RFID tags on the shirts, shoes, and other products that Amazon sells have this kind of passive, no-battery tag.

Figure 1: A passive, battery-free RFID tag on the left. An active, battery-powered RFID tag enclosed in a hard-shell container on the right. Photo courtesy of Dr. Oliver Hedgepeth.

A similar RFID device is on the back of a conference name tag. When wearers enter a conference room, their photo and name appear on a large screen, showing everyone who has just entered the room.

There is a second version, called an active tag, which does have a battery. This battery is usually housed in a plastic container as shown on the right in Figure 1.

The difference is that this battery-powered tag can be read from 10 to 50 feet away, which comes in handy when a company is tracking goods on a truck entering a gated area or a warehouse. That passive tag, which we all have on our credit or debit cards, can only be scanned by a reader inches away as shown in Figure 2. We are already used to using such tags at gas stations or fast-food restaurants.

Figure 2: Eduardo Prieto demonstrating how a product’s passive RFID tag can be read by a radio frequency reader held a few inches away from the tag. Photo courtesy of Dr. Oliver Hedgepeth.

Amazon Go and Amazon Fresh

Amazon is deep into using artificial intelligence (AI) and related smart software to make the shopping experience as pain-free as possible. Even the shopping cart is AI-linked, and it has its own name, the Dash Cart.

Amazon opened its new grocery stores, Amazon Fresh, in Seattle and Bellevue, Washington, in June. Consumers place their grocery items in their cart, walk out of the store, unload their groceries into their cars and drive off. Their credit card is then charged for their purchases after their departure because RFID tags were on all of those products.

Radio frequency readers are hidden from view and record everyone who enters the store. Amazon calls this type of business the “Just Walk Out” store, which is exactly what customers do. No cashier is there to bag your items or say “have a nice day.”

The cashier-less store is a product of both AI technology and RFID. And while RFID was first introduced in the 1940s to distinguish our military planes from those of our enemies, the push for AI started to take off around the 1980s.

When consumers first enter one of these smart technology stores, they just scan their iPhone and the Amazon computer system identifies who they are. A credit card or bank account number is used for charging the purchases.

Another method is Amazon’s palm-reading system, which scans customers’ palms as a unique kind of fingerprint method to identify who is entering. That palm identification is also linked to a credit card. 

Currently, there are Amazon Fresh stores in selected sites of the U.S. – eight stores in Los Angeles and four in Chicago. Another store is in Franconia, near Springfield, Virginia, and a second store is planned for Lorton, also located in Northern Virginia.

The Franconia store is in an empty Shoppers Food Warehouse facility. Amazon is in the business of recycling buildings, it seems.

Amazon seems to be installing this AI technology in all of its Whole Food chain of stores and in Amazon Books. And while Amazon is stretching this new social shopping experience across the U.S., it is also opening an Amazon Fresh in London.

Having a store with no checkout line or cashier is a positive result of the use of AI and related technology. There is no waiting in line, dealing with a shopper in front of the line arguing with the cashier over price, or encountering a slow person who likes to talk to the store clerk. The ability to speedily shop for breakfast, lunch, or dinner and all sorts of household items is a positive feature, available to shoppers without having to be a computer expert.

The positive benefits of convenience in shopping aside, not everyone can take immediate advantage of this cashier-less retail experience. To become a shopper at one of these Amazon stores requires becoming an Amazon Prime member with an annual fee of $119. This fee may be waived this year as a promotional inducement.

Also, the cost of grocery items could vary by geographic location. It is easy to know where an Amazon Fresh is located, hopefully near you.

Possible Problems with Amazon Go and Amazon Fresh

Predicting the future of smart technology such as AI, Amazon Go and Amazon Fresh is always tricky. It was so with the introduction of the computer to replace the typewriter, the internet providing news to people around the world or driverless vehicles being road-tested today. Many such technology applications, labeled Black Swans, were unplanned but worked out well for exciting uses.

With its persistence in using AI and robots, is Amazon producing a Black Swan for grocery shopping? Does this technology become a planned change to society? Are there any unforeseen shortcomings?

Advanced machine intelligence, AI, and robots are increasingly showing up in retail and wholesale businesses as well as in our homes. It seems the coronavirus pandemic has only increased the application of AI and robots everywhere.

 Amazon Go and Amazon Fresh are one of many such applications of AI technology, seen everywhere from prison guards, firefighters, sushi chefs and pets to Amazon’s virtual assistant Alexa. While this application of AI technology has widespread public support, Amazon is using it – along with cameras and data tracking sensors – to keep tabs on us.

Amazon: Mastering the Crossroads of AI and RFID

Amazon is deeply committed to being a leader in advancing the possibilities of the Internet of Things (IoT) where RFID data is part of that ever-expanding network from groceries to iPhones, bicycles, computers, and clothing. Amazon is using RFID for tracking goods in its warehouses and for its expanding list of supply chain users and partners. In addition, Amazon is utilizing AI and RFID to improve the tracking and auditing of customers’ orders.

Amazon is also part of the retail and apparel world. Clearly, Amazon is poised to capture an expanded market share working with its business partners and supply chains.

Dr. Oliver Hedgepeth is a full-time professor in the Dr. Wallace E. Boston School of Business. He was program director of three academic programs: Reverse Logistics Management, Transportation and Logistics Management, and Government Contracting. He was Chair of the Logistics Department at the University of Alaska Anchorage. Dr. Hedgepeth was the founding Director of the Army’s Artificial Intelligence Center for Logistics from 1985 to 1990, Fort Lee, Virginia.

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