What Amazon Go Got Wrong

A Small Business Victory

Another technological retail experiment is coming to an end in Woodland Hills, California. Amazon has announced the closure of its Amazon Go convenience store effective February 26th, laying off all 10 employees. When I was CEO of ForwardLine Financial, our headquarters were in Woodland Hills, and I once visited this Amazon Go location to experience their ready-made food section. Now, like many of their other locations, it's shutting down. This isn't an isolated incident – Amazon has shuttered roughly half of its Amazon Go stores over the past three years, dropping from about 30 locations in early 2023 to just 16 today.

The news raises an important question for small business owners: In our technology-driven world, what competitive advantages do we actually have against retail giants like Amazon?

The Promise vs. Reality

When Amazon Go launched, it represented a fascinating retail innovation: stores without checkout lines. Their "Just Walk Out" technology used sensors and cameras to track what customers picked up, automatically charging their accounts when they left. No cashiers, no waiting, just grab and go.

The technology itself wasn't the problem. In fact, Amazon's spokesperson emphasized that their Just Walk Out technology has expanded to over 200 locations across the U.S., U.K., Australia, and Canada as a service to third-party retailers.

This is part of a much larger trend. According to Statista, the number of stores offering autonomous checkout worldwide has exploded from just 350 in 2018 to an estimated 10,000 in 2024. Consumers are clearly embracing this technology. The convenience of walking in, grabbing what you need, and walking out without the friction of checkout lines has obvious appeal.

Source: Statista, 2025

So if the technology works and consumers want frictionless shopping experiences, why are Amazon Go stores themselves failing?

What Went Wrong? The Human Equation

This apparent contradiction points to something fascinating about retail psychology: convenience isn't everything.

The Woodland Hills Amazon Go store, like others in the chain, resembled a typical convenience store in size but operated with a skeleton crew. Where a traditional convenience store might employ 15-20 full and part-time workers to cover all shifts, Amazon attempted to run the operation with just 10 employees total. The goal was clear: minimize human labor costs through automation.

But this approach overlooked a critical insight about customer behavior. While shoppers certainly appreciate efficiency, they also value knowing that help is available when they need it. A 2023 survey by Theatro found that among consumers who prefer in-store shopping, 21% specifically cited the ability to ask questions and get help from store employees as a key reason.

The data from this survey reveals something even more fundamental about retail preferences:

• 91% of consumers do at least half of all their shopping in physical retail stores rather than online
• 87% shop in retail stores at least once weekly
• 76% of those who prefer in-store shopping say they like being able to see and touch products
• 25% enjoy the social aspect of shopping

Amazon's mistake wasn't implementing autonomous checkout technology – it was attempting to remove the human element entirely from the retail experience.

The Underdog Advantage: How Small Businesses Can Thrive

This development confirms what I discovered in my research on businesses that survived COVID-19. As I wrote in my article "When Small Means Strong," the businesses that showed the greatest resilience during the pandemic were those that leveraged what I call the "Underdog Principles" – inherent advantages that small businesses possess that even tech giants struggle to replicate. Here are three principles that specialty retailers and service businesses should embrace:

1. Positioning: Be Meaningfully Different

Amazon positioned the Go stores around a single advantage: no checkout lines. But small businesses can position themselves around much deeper customer needs. Maybe you're the only shop in town with expert knowledge in a specific product category. Perhaps you source unique local goods that mass retailers don't carry. Or maybe your staff provides personalized recommendations that an algorithm simply can't match.

While you can't compete with Amazon's technology budget, you can create a shopping experience that feels special and specific to your customers' needs. This isn't about rejecting technology – it's about using it thoughtfully to enhance what makes your business different.

2. Proximity: Customer Insight From Direct Interaction

The giant tech companies spend billions trying to understand consumer behavior through data and surveys. Meanwhile, you gain profound customer insights simply by talking with your shoppers every day. This proximity gives you the ability to notice changing preferences, adapt your inventory, and modify your services in real-time.

When you hear multiple customers mention interest in a new product category, you can test it immediately – no corporate approval needed. This responsiveness is something big companies pay millions to replicate through market research.

3. Purpose: Connection Beyond Transactions

Small businesses are embedded in their communities in ways that corporations can never be. From supporting local causes to creating gathering spaces, your business can become part of the neighborhood's identity and culture.

The Theatro survey found that 25% of shoppers enjoy the social aspect of in-store shopping. This represents a profound opportunity for small retailers who can create experiences that foster community and connection – something Amazon's automation-first approach fundamentally missed.

Finding the Balance: Technology + Human Touch

Serving your customers should always come first. Technology should be adopted only when it allows you to serve them better or when it frees up your time and energy to focus more on customer needs by handling routine tasks in the background.

Consider these approaches:

• Selective automation: Use technology to handle routine tasks, freeing your team to provide high-value personal interactions.
• Smart inventory systems: Implement tools that help you keep popular items in stock without requiring constant manual counting.
• Mobile POS systems: Allow staff to process payments anywhere in the store, reducing lines while maintaining personal interaction.
• Customer recognition technology: Use systems that help you remember customer preferences and purchase history while still providing human service.

The key is to evaluate every technology investment with a single question: "Does this help me better serve my customers?" If the answer is yes – either by improving their experience directly or by freeing you to focus more on them – then it's worth considering. If not, it's just technology for technology's sake.

The lesson from Amazon Go's struggles isn't that technology fails – it's that technology alone isn't enough. The future belongs to businesses that put customer needs first and use technology as a tool to enhance human connection, not replace it.

As Amazon continues to reassess its brick-and-mortar strategy, small business owners should feel encouraged. Your intrinsic advantages – your Underdog Principles – are proving to be more valuable than even the most sophisticated technology developed by one of the world's most powerful companies.

In retail's evolving landscape, being small doesn't mean being weak. In fact, as Amazon Go's closures demonstrate, sometimes small means strong.