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Amazon Goes Cashierless, but Boosts Prime Fees

Amazon is no stranger to the Food Institute Blog. They serve as a benchmark for e-commerce in many ways, and over the weekend, the company made two moves that will likely impact the retail world in the coming months.

To start, the company announced a dynamic pricing plan for its Amazon Prime service. For customers who pay up front for an annual subscription, prices will remain at $99 ($49 for students). However, for those who opt to be charged on a monthly basis, rates will change, reported AL.com (Jan. 19).

Monthly payments will increase from $10.99 a month to $12.99 a month for regular consumers, while students will see a bump from $5.49 to $6.49 per month. The price changes are effective Jan. 19 for new members, while existing members will have until Feb. 18 to decide upon their pricing plan.

The new pricing plans will undoubtedly affect mostly Amazon fans, but this news is likely more interesting to most: Amazon opened its checkout-free grocery store, which replaces human employees with automated systems. The Amazon Go concept uses cameras and sensors to track what shoppers remove from or put back on shelves, and automatically bills them for items removed from the store. Customers must scan an Amazon Go smartphone app to enter, reported Reuters (Jan. 22).

The new store will put more pressure on other retailers who may be struggling to keep up with technology, but perhaps Amazon is advancing too quickly in its pursuit of grocery dominance. Amazon-owned Whole Foods Market’s inventory-management system may be leading to inventory shortages, according to employees. The company claims the pre-Amazon system reduces unnecessary inventory, lowers costs and frees up employees to focus on customer service. However, while employees acknowledge that less food is spoiling in storage rooms, some argue it leads to many items being out of stock, reported Business Insider (Jan. 18).