Read the mini-case on page 56 Amazon Go: How far can it go? then answer question #3 "Which of the four sustainability factors are positioned to help Amazon Go? Describe How." By "sustainability factors" the textbook means the barriers from Figure 2.8, p. 47.

Barrier Definition Examples IT Project Barrier It would be a large undertaking for a competitor to . Requires a large investment build the system to copy the capability. . Requires a long time to build . Complicated to build IT Assets and Competitors might lack the IT resources to copy . Database of customers that cannot be copied Capabilities Barrier the capability. . Expert developers or project managers Complementary The firm has other resources that create a synergy . Respected brand Resources Barrier with the IT that provides competitive advantage. . Partnership agreements . Exclusivity arrangements . Good location Preemption Barrier The firm "got there first." . Loyal customer base built at the beginning . Firm known as "the" sourceCase Study 2-1 Amazon Go: How Far Can It Go? Amazon has many lines of business in its bid to be the largest and most customer-centric company. One unexpected area in which it has publicized a new vision is in-store shopping. On January 22, 2018, Amazon announced a new concept in physical shopping, called "Amazon Go," In short, imagine walking into a convenience store after identifying yourself using an app just like those at the airport scanning a bar code on their mobile device instead of a paper boarding pass. As you walk through the store, you take items from the shelf, put some back after looking them over, put some in your basket, and even return some to the shelf from your basket after finding a more desirable item elsewhere in the store. Then you put everything in your bag, your pockets, or your mouth, and then leave the store without stopping by any cash registers. The receipt can be found in the app. This feat is accomplished with the help of hundreds of cameras pointing down from the ceiling that carefully watch you, your items, and your basket all the while you are in the store. Weight sen- sors and shelf cameras reveal products removed or replaced. The monitoring process is managed by image recognition, artificial intelligence, and machine learning. A 3-D representation of each customer is built and tracked. Amazon assures us that after the checkout process is complete, nearly all of the data are discarded. Shoplifting is virtually impossible with such technology, Amazon states. Matt Mcfarland, a CNN reporter, tried in vain to fool the system for almost an hour, by pointing closely at items, covering up scanning symbols used by the cameras scanners, and grabbing products from behind his back. Amazon told him that errors are highly infrequent. Of course, a major benefit includes reducing or eliminating the need to hire cashiers. Mcfarland reported that there is no research to suggest whether the personnel savings will cover losses in sales of convenience items strategically placed near the cash register while customers wait several min- utes in line, or for a potential loss in "social proof;" that a long line signals that the store must be pretty great. However, there could be other new opportunities to upsell and cross-sell customers. The Al, through the app, can suggest complementary goods such as side dishes, special deals on foods that the customer tends to buy often, and new items that are likely to be desirable to that particular customer. A physical store cannot do this without a shopping concierge who knows you in detail and follows you around. This is analogous to the Amazon.com site that suggests other products that you might like. Future market researchers are likely to investigate whether sales of items that are meaningful to a customer thanks to Al and past shopping behavior will fall short or exceed sales of waiting-line convenience items such as gum, magazines, or candy bars. The future indeed seems to hold many opportunities for the concept. Amazon has secured patents for several technologies used to enable the stores to operate, and Amazon is planning to open 3,000 of these stores in the United States. However, Jim Kenney, Mayor of Philadelphia, signed off on a bill passed by city council by a wide margin to ban cashless stores. That bill would essentially prevent Amazon Go from operating in the city that is plagued by a 25% poverty rate. The purpose is to avoid limiting access to low-income customers. Other cities might take a note of such a move and follow suit. Amazon later acquiesced and agreed to accept cash in its Amazon Go stores after all. Sources: Adapted from Matt Mcfarland, "I Spent 53 Minutes in Amazon Go and Saw the Future of Retail," CNN Business, October 3, 2018, https://www.cnn.com/2018/10/0. /tech/amazon-go/index.html (accessed February 20, 2019): "Introducing Amazon Go and the World's Most Advanced Shopping Technology," December 5, 2016, hups// www.youtube.com/watch?v=NrmMkIMyrxc (accessed February 20, 2019); Alan Boyle, "Fresh Patents Served Up for the Smart Shelf Technologies Seen in Amazon Go Stores," September 4, 2018, https:/www.geekwire.com/2018/ fresh-patents-served-smart-shelf-technologies-seen-amazon-go-stores/ (accessed February 20, 2018); Christian Het- rick, "Amazon Warns It May Rethink Plans to Open a Philly Store If the City Bans Cashless Retailers," Philly.com, February 15, 2019, hups://www.philly.com/business/retail/amazon-go-philadelphia-cashless-store-ban-20190215. html (accessed February 20, 2019); Christian Hetrick, "Philadelphia Passes Ban on Cashless Stores; Amazon Go Plans Said to Be in Jeopardy." The Morning Call (March 4, 2019), https://www.mcall.comewsationworld/penn- sylvania/mc-nws-philadelphia-cashless-stores-bill-20190304-story.html (accessed March 6, 2019); and "Amazon Says Go Stores Will Soon Accept Cash, One Month After Philly Passes Cashless Store Ban," Phillyvoice.com, April 10, 2019, hups://www.phillyvoice.com/amazon-go-accept-cash-cashless-store-ban-philly/ (accessed June 23, 2019)