At a conference recently, I heard the chief executive of a supermarket chain proudly claim that installing automatic checkout machines was improving the company’s productivity. This is wrong, of course. These machines have replaced traditional checkout equipment — and their paid human operators — with unpaid customer labour in scanning and bagging. The company’s measured revenue per employee hour will certainly be rising. True productivity will not. Economic welfare in the round is reduced by the struggle we customers have with the still-imperfect new machines.
This raises the question of what would count as a genuine productivity gain. The retail sector made massive strides in productivity during the 1990s, mainly thanks to the use of the new information and communication technologies in logistics. Perhaps automation has further to go in terms of delivering products to the supermarkets. But what would higher productivity look like in terms of actually getting groceries into customers’ shopping bags?
The answer might well lie with Amazon’s experimental store, Amazon Go. Customers put what they want in their bags and walk through a turnstile. A proliferation of cameras — and an algorithm — watch them, add up their bills and charge it to them. There is no checkout process at all.