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Is ‘Just Walk Out’ technology the future of retail?
NATIONAL
While Amazon has recently been scaling back its brick-and-mortar bookstores, it has been increasing its efforts in the grocery sector, growing more Amazon Fresh locations, and trialling its ‘Just Walk Out’ technology at Whole Foods Market. In select cities in the United States, Amazon operates small format stores with prepared foods and some grocery items under the Amazon Go banner, also using this ‘Just Walk Out’ technology. This has now expanded to seventeen stores across London under the brand Amazon Fresh. A spread across the world is expected with supermarkets able to license the technology from Amazon.
So what is this ‘just walk out’ shopping experience?
The store is like a normal convenience store, however, there is no checkout - no registers or cashiers – and customers never have to wait in line. Customers walk in, select what they want to buy and walk out. The first Amazon Go was located in Seattle, a small convenience store, approximately 1,800 square feet of retail space. In addition to these smaller Amazon Go stores, are the larger Amazon Go Grocery and Amazon Fresh stores.
The stores work with an app – Amazon Go app – which is linked to the customer’s account for billing. The technology detects when a product is taken or returned to the shelves and keeps track of the products in the customer’s virtual cart. When the customer leaves the shop, their Amazon account is charged, and a receipt is sent to the customer.
A “bag as you shop” display at an Amazon Go store in Seattle.Photographer: Chona Kasinger/Bloomberg
How does it work?
The consumer sets up an account with Amazon and downloads the free app. The app is scanned when the consumer enters the store through a turnstile. The consumer puts away their phone and begins shopping – selecting items, placing into their basket or bags, or back on shelves. There is no need to scan items. Once finished the shopper can just walk out of the store – there is no need to checkout.
The technology and cost efficiencies
Amazon uses a combination of artificial intelligence, computer vision, and data drawn from multiple sensors, which ensures the consumer is only charged for the items they pick up. Cameras track items taken from the shelves.
This cutting-edge technology optimises the store’s operational efficiencies by enabling effortless, convenient, and check out free shopping. This cashierless store reduces costs, which can make a profound difference to earnings in the grocery industry where tight margins prevail. Store cost benefits include:
• Eliminates shoplifting • Fewer staff employed • Firm control on stock • Data on what products each customer is buying. Business Insider1 reported that Amazon has significantly reduced the cashierless stores’ operating costs. For instance, a 1,000 square foot store that cost $4 million to run four years ago, now costs only $159,000. However, retailers are concerned about how Amazon might use their data given their current bricks-andmortar motivations. It may be more strategic for Amazon to become solely a service provider and desert their stores altogether.
