After trialing Just Walk Out technology inside its own mini chain of Amazon Go convenience stores, the Seattle tech titan is now selling the technology to other retail business, explaining how the system works on the justwalkout.com website.
The move comes as little surprise to industry watchers who have long predicted that Amazon had no reason to keep an expensive research and development effort to itself if it could line its coffers by licensing the tech stack to the industry.
Frictionless is the name of the game for the Just Walk Out experience. Shoppers visiting an Amazon Go store scan the eponymous smartphone app at a kiosk turnstile upon entrance. Store merchandise is stocked on sensor-laden shelves that detect when items are picked up and replaced, and a network of cameras monitors activity as well. The default credit or debit card tied to a customer’s Amazon account is automatically charged for any items taken upon leaving the location.
The technology’s combination of “computer vision, sensor fusion, and deep learning” will “delight” customers “as they can take what they want and leave without stopping to check out,” according to the Just Walk Out site.
Travelers may soon have the opportunity to check out Amazon-style. On Wednesday, hospitality group OTG said its CIBO Express Gourmet Markets, a common sight in many national airports, will deploy Just Walk Out in select locations, with the first set to debut on March 16 in Newark Liberty’s Terminal C.
“We’ve found that shoppers truly appreciate checkout-free retail experiences, so we’re thrilled to be working with an innovative company like OTG to bring our proven Just Walk Out technology to their airport stores,” Dilip Kumar, vice president (VP), physical retail and technology at Amazon, said in a statement.
OTG CEO Rick Blatstein said the checkout-free upgrade will put hurried airport customers “in full control of their time.”
Despite companies like OTG moving quickly to adopt Amazon’s tech, voices across the retail sector have had a mixed reaction to the news.
Given how much commerce is happening in the convenience of online, it was only a matter of time before shoppers’ digital expectations bled from clicks into bricks, according to Bhavin Asher, CEO of Grubbrr, a payments technology company serving the retail and restaurant industries.
“Modern consumers are spending more and more time making purchases online,” he noted, “and therefore expect a streamlined, seamless and fast in-store experience as well.”
But Forrester Research Sucharita Kodali VP believes Just Walk Out could be an expensive mistake for many retailers brainwashed by the myth that says they need “to be just like Amazon.”
“On the long to-do list of investments retailers need to make,” she said, “this is maybe No. 100.”
RSR Research managing partner Paula Rosenblum is similarly skeptical about Just Walk Out’s place in retail. Convenience stores, she said, are the most natural fit as shoppers typically grab just a few items. “But in that environment no retailer can afford someone in the store who can care and feed the technology,” Rosenblum said. “Stuff breaks. That’s just the way technology is. And any CIO will tell you the tortures of getting store personnel to help with POS problems.”
Asking employees to climb up on ladders to tinker with malfunctioning cameras poses “insurance issues, just for starters,” Rosenblum added.
She also questions whether Just Walk Out can reasonably scale into stores spanning more square footage than the average corner store, and where sticky-fingered shoppers are more likely to make shrink a pressing priority. And she doesn’t see a fit in the fashion space, either. “The people who defeated the system did it by going into the bathroom,” Rosenblum said of a limited number of consumers who managed to get one over on Amazon Go. “So the fitting room is a good place to either get false positives or missed theft.”
Kodali, on the other hand, see how the tech could alleviate shoplifting while driving business value. “I think there is value for loss prevention and omnichannel reasons,” she noted. “Maybe over time, that is what it enables—real time inventory counts and location, but that use case hasn’t been calculated yet.”
The value of the technology made famous by Amazon Go could lie in its ability to create widespread awareness of—and consumer comfort with—future-forward checkout technologies. Startups like Grabango have developed similar capabilities, along with Standard Cognition, whose COO and co-founder Michael Suswal described the company at CES as “like Amazon Go, but for everyone else.”
Suswal takes umbrage with some aspects of the Amazon Go-style setup—namely the kiosks that act as gatekeepers inside a store entrance. Standard Cognition, which has raised $86 million from top-flight investors, has its reasons for sidestepping similar physical barriers, he said. “We think it’s ludicrous to put a gate between you and revenue,” he said, as “it’s the antithesis of what retailers should be doing.”
Instead, the three-year-old Palo Alto, Calif., startup requires consumers to log into a branded app when visiting one of its tech-enabled locations, like San Francisco’s Market Street Standard Store—which showcases how the system works in a small-grocery setting. From there, they shop and walk out with their purchases, receiving a digital receipt for their goods, or pay at a kiosk in store.
The company offers three products: Standard Checkout, on display in the demo store; Standard Analytics, which help retailers parse the nuances of customer behavior; and Standard Security, the tech that keeps shrink from becoming an issue. “If you didn’t use the app and you start exiting the store, we want to be able to notify the shop managers or the store staff” to “go have a conversation with this person,” Suswal said, describing the approach as a lot less “aggressive” than how many shoplifting suspects are typically treated today.
“We don’t want people to feel like they’re being accused of something when it could be an honest mistake,” he added.
Barriers to adoption
Automated checkout technology might find new enthusiasts at a time when the COVID-19 pandemic is closing stores and spooking shoppers who health officials say should adopt “social distancing practices.” But many of the tech solutions out there remain prohibitively expensive for retailers of modest means.
“There is a misconception that integrating payment kiosks into a company comes with a large investment, but companies can outsource this technology rather than creating their own to save on costs,” said Asher, noting that Grubbrr’s technology starts at just a few hundred dollars per month, a price point accessible for mom-and-pop shops and other small businesses.
“While I don’t believe retail will go complete cashless in the next few years, we will see changes in how companies are taking payments and cash use will continue to decrease,” Asher said.
Still, Rosenblum believes merchants must figure out their own needs and priorities. “It’s time for retailers to chart their own course when it comes to managing their stores,” Rosenblum said, and really, their e-commerce businesses as well.
“Following Amazon feels like a real trick to me,” she said.