{"id":26485,"date":"2024-10-05T23:10:07","date_gmt":"2024-10-05T23:10:07","guid":{"rendered":"http:\/\/108041803"},"modified":"2024-10-05T23:10:07","modified_gmt":"2024-10-05T23:10:07","slug":"amazon-bets-on-selling-cashierless-technology-to-retailers-after-pulling-it-from-most-u-s-stores","status":"publish","type":"post","link":"https:\/\/wp.worldtechguide.net\/amazon-bets-on-selling-cashierless-technology-to-retailers-after-pulling-it-from-most-u-s-stores\/","title":{"rendered":"Amazon bets on selling cashierless technology to retailers after pulling it from most U.S. stores"},"content":{"rendered":"<div><img decoding=\"async\" src=\"https:\/\/wp.worldtechguide.net\/wp-content\/uploads\/2024\/10\/amazon-bets-on-selling-cashierless-technology-to-retailers-after-pulling-it-from-most-u-s-stores.jpg\" class=\"ff-og-image-inserted\"><\/div>\n<p><span class=\"HighlightShare-hidden\"><\/span><\/p>\n<div class=\"group\">\n<p>In 2012, <span class=\"QuoteInBody-quoteNameContainer\" data-test=\"QuoteInBody\" id=\"RegularArticle-QuoteInBody-1\"><span class=\"waslinkname\">Amazon<\/span><span class=\"QuoteInBody-inlineButton\"><span class=\"AddToWatchlistButton-watchlistContainer\" id=\"-WatchlistDropdown\" data-analytics-id=\"-WatchlistDropdown\"><button class=\"AddToWatchlistButton-watchlistButton\" aria-label=\"Add To Watchlist\" data-testid=\"dropdown-btn\"><span class=\"AddToWatchlistButton-addWatchListFromTag\"><\/span><\/button><\/span><\/span><\/span> founder Jeff Bezos <span class=\"waslinkname\">was asked by<\/span> TV host Charlie Rose whether his e-commerce company would ever venture into brick-and-mortar stores. <span class=\"waslinkname\">Bezos<\/span> said shoppers were well-served by existing physical retailers and that Amazon wasn&#8217;t interested in launching a &#8220;me-too&#8221; product.<\/p>\n<p>&#8220;We want to do something that&#8217;s uniquely Amazon,&#8221; Bezos said. &#8220;If we can find that idea, and we haven&#8217;t found it yet, but if we can find that idea, we would love to open physical stores.&#8221;<\/p>\n<p>Six years later, Amazon landed on a revolutionary retail concept that it hoped would transform how people shop in brick-and-mortar stores. The company <span class=\"waslinkname\">launched<\/span> its first Amazon Go convenience store featuring a new kind of technology, called &#8220;Just Walk Out.&#8221;<\/p>\n<p>In practice, customers would be able to load up their cart and exit the store without standing in a checkout line. Amazon soon brought cashierless checkout to its Fresh supermarkets and two Whole Foods locations. <span class=\"waslinkname\">In 2020<\/span>, the company began licensing Just Walk Out technology to third parties, signing on retailers in stadiums, airports and hospitals.&nbsp;<\/p>\n<p>But the company has since taken a sideways turn.<\/p>\n<p>In April, Amazon <span class=\"waslinkname\">announced<\/span> it was removing cashierless checkout from its U.S. Fresh stores and Whole Foods locations, a move that coincided with CEO Andy Jassy&#8217;s <span class=\"waslinkname\">efforts to rein in costs<\/span> to meet rapidly changing macro conditions.<\/p>\n<p>As part of that effort, Amazon also reevaluated its retail plans. The company <span class=\"waslinkname\">discontinued<\/span> <span class=\"waslinkname\">some of its retail chains<\/span>, <span class=\"waslinkname\">closed eight Amazon Go stores<\/span>, and hit pause on new Fresh store openings. It&#8217;s <span class=\"waslinkname\">launched<\/span> a handful of new Fresh stores in recent months.<\/p>\n<p>In place of Just Walk Out, which typically requires ceiling-mounted cameras, shelf sensors and gated entry points, Amazon Fresh stores and Whole Foods supermarkets will feature Dash Carts. The carts track and tally up items as shoppers place them in bags, enabling people to skip the checkout line. Amazon continues to use Just Walk Out in its grab-and-go marts and UK Fresh stores.&nbsp;<\/p>\n<\/div>\n<div class=\"InlineImage-imageEmbed\" id=\"ArticleBody-InlineImage-107378178\" data-test=\"InlineImage\">\n<div class=\"InlineImage-wrapper\">\n<div>\n<p>A woman uses a dash cart during her grocery-shopping at a Whole Foods store as Amazon launches smart shopping carts at Whole Foods stores in San Mateo, California, United States on February 25, 2024. The smart shopping cart makes grocery shopping quicker by allowing customers to scan products right into their cart as they shop and then skip the checkout line.<\/p>\n<p>Tayfun Coskun | Anadolu | Getty Images<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"group\">\n<p>The main challenge for Amazon and other startups working on autonomous checkout is the need to scale it to enough locations and retail categories that it becomes a natural part of in-store shopping, said Jordan Berke, founder and CEO of retail consulting firm Tomorrow.<\/p>\n<p>&#8220;Until that&#8217;s the case, it&#8217;s an uphill battle,&#8221; Berke said. &#8220;These technology providers, Amazon included, are going to have to subsidize and continue to invest to train the retailer, train the consumer, train the market, that this is a mainstream experience that we can all trust and not need to think about as we walk in and out of a store.&#8221;<\/p>\n<\/div>\n<h2 class=\"ArticleBody-subtitle\">&#8216;The hardest problem to solve&#8217;<\/h2>\n<div class=\"group\">\n<p>At one point Amazon saw Just Walk Out becoming a <span class=\"waslinkname\">core part<\/span> of the experience of shopping in its physical stores. The company in 2018 planned to open as many as 3,000 Amazon Go stores within a few years, <span class=\"waslinkname\">Bloomberg <\/span>reported at the time, citing people familiar with the plans.&nbsp;<\/p>\n<p>Bezos had assigned top talent from across the company, including a longtime Amazon executive who built the original Kindle e-reader, to work on cashierless checkout. The technology was considered a key ingredient in Amazon&#8217;s long-running pursuit to become a giant in the $1.6 trillion U.S. grocery market.&nbsp;<\/p>\n<p>When Amazon debuted Just Walk Out in January 2018, it was a &#8220;quake moment&#8221; for the industry, causing <span class=\"QuoteInBody-quoteNameContainer\" data-test=\"QuoteInBody\" id=\"RegularArticle-QuoteInBody-14\"><span class=\"waslinkname\">Walmart<\/span><span class=\"QuoteInBody-inlineButton\"><span class=\"AddToWatchlistButton-watchlistContainer\" id=\"-WatchlistDropdown\" data-analytics-id=\"-WatchlistDropdown\"><button class=\"AddToWatchlistButton-watchlistButton\" aria-label=\"Add To Watchlist\" data-testid=\"dropdown-btn\"><span class=\"AddToWatchlistButton-addWatchListFromTag\"><\/span><\/button><\/span><\/span><\/span> and &#8220;almost every other retailer&#8221; to leap into action and consider developing their own vision-based checkout systems, said Berke, who previously led Walmart&#8217;s e-commerce business in China.<\/p>\n<p>Amazon and other retailers soon learned that automating the checkout process is &#8220;the hardest problem to solve,&#8221; Berke said. Cashierless checkout systems require a hefty upfront investment to blanket a store with overhead cameras and hire staff to label and review shopping data.&nbsp;&nbsp;&nbsp;<\/p>\n<p>&#8220;It meant a store had to dramatically increase its sales in order to pay off that investment,&#8221; Berke said.&nbsp;<\/p>\n<p>Walmart teams found as part of a cost analysis in early 2019 that it would run a retailer between $10 million and $15 million to create a similar computer vision-based checkout system for a 40,000 square foot supermarket, Berke said.<\/p>\n<p>Just Walk Out became an expensive project for Amazon, too. In 2019 and 2020, the company shelled out roughly $1 billion per year, including research and development costs and capital expenditures, to &#8220;learn and scale&#8221; the technology, Berke said. He said those figures are based on discussions with a former Just Walk Out executive who left Amazon to join Walmart.<strong> <\/strong>Amazon didn&#8217;t provide a comment on the figures.<\/p>\n<p>Many retailers have since moved on from computer vision in favor of simpler methods like mobile checkout through an app, Berke said.&nbsp;<\/p>\n<p>Walmart uses <span class=\"waslinkname\">a self-checkout app<\/span> in its stores, while supermarket chain Kroger <span class=\"waslinkname\">has been experimenting<\/span> with <span class=\"QuoteInBody-quoteNameContainer\" data-test=\"QuoteInBody\" id=\"RegularArticle-QuoteInBody-17\"><span class=\"waslinkname\">Instacart&#8217;s<\/span><span class=\"QuoteInBody-inlineButton\"><span class=\"AddToWatchlistButton-watchlistContainer\" id=\"-WatchlistDropdown\" data-analytics-id=\"-WatchlistDropdown\"><button class=\"AddToWatchlistButton-watchlistButton\" aria-label=\"Add To Watchlist\" data-testid=\"dropdown-btn\"><span class=\"AddToWatchlistButton-addWatchListFromTag\"><\/span><\/button><\/span><\/span><\/span> Caper connected shopping carts at some locations. Retailers like <span class=\"QuoteInBody-quoteNameContainer\" data-test=\"QuoteInBody\" id=\"RegularArticle-QuoteInBody-18\"><span class=\"waslinkname\">Target<\/span><span class=\"QuoteInBody-inlineButton\"><span class=\"AddToWatchlistButton-watchlistContainer\" id=\"-WatchlistDropdown\" data-analytics-id=\"-WatchlistDropdown\"><button class=\"AddToWatchlistButton-watchlistButton\" aria-label=\"Add To Watchlist\" data-testid=\"dropdown-btn\"><span class=\"AddToWatchlistButton-addWatchListFromTag\"><\/span><\/button><\/span><\/span><\/span> and <span class=\"QuoteInBody-quoteNameContainer\" data-test=\"QuoteInBody\" id=\"RegularArticle-QuoteInBody-19\"><span class=\"waslinkname\">Dollar General<\/span><span class=\"QuoteInBody-inlineButton\"><span class=\"AddToWatchlistButton-watchlistContainer\" id=\"-WatchlistDropdown\" data-analytics-id=\"-WatchlistDropdown\"><button class=\"AddToWatchlistButton-watchlistButton\" aria-label=\"Add To Watchlist\" data-testid=\"dropdown-btn\"><span class=\"AddToWatchlistButton-addWatchListFromTag\"><\/span><\/button><\/span><\/span><\/span> are <span class=\"waslinkname\">rethinking self-checkout<\/span> <span class=\"waslinkname\">entirely<\/span> due to concerns of rising theft in their stores, and have added more traditional checkout lanes.<\/p>\n<p>While it&#8217;s no longer featuring Just Walk Out as prominently in its own stores, Amazon says it has inked deals with a growing list of customers. More than 200 third-party stores have paid Amazon to install the cashierless system. The company expects to double the number of third-party Just Walk Out stores this year, Jon Jenkins, who previously served as vice president of Amazon&#8217;s Just Walk Out technology, said in a recent interview. Jenkins departed Amazon in late September to become technology chief of electric bike and scooter startup Lime, according to his <span class=\"waslinkname\">LinkedIn page<\/span>.<\/p>\n<\/div>\n<div class=\"InlineImage-imageEmbed\" id=\"ArticleBody-InlineImage-108043755\" data-test=\"InlineImage\">\n<div class=\"InlineImage-wrapper\">\n<div>\n<p>Jon Jenkins, Amazon&#8217;s former vice president of Just Walk Out technology, gives a tour of the mock convenience store where the company tests its cashierless checkout system in Seattle, Washington, on August 22, 2024.<\/p>\n<p>CNBC<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"group\">\n<p>Jenkins disputed characterizations that Amazon&#8217;s phasing out of Just Walk Out from its own supermarkets represents a setback or <span class=\"waslinkname\">a sign of the technology&#8217;s demise<\/span>. He said Amazon proved through tests in its own grocery stores that the technology is &#8220;incredibly capable,&#8221; noting it deployed the system in large supermarkets with &#8220;600 people in the store at the same time.&#8221;<\/p>\n<p>Other startups such as AiFi and Grabango have developed autonomous systems for supermarkets, convenience stores and other retailers, but widespread adoption has been slow, as the technology remains costly and challenging to operate in large store formats.&nbsp;<\/p>\n<\/div>\n<h2 class=\"ArticleBody-subtitle\">Inside the lab<\/h2>\n<div class=\"group\">\n<p>Amazon is still fine-tuning its Just Walk Out technology.<\/p>\n<p>In August, CNBC got the first on-camera look at a mock convenience store where Amazon tests the system before deploying it in third party retailers and its own stores.&nbsp;<\/p>\n<p>The testing lab, which it calls &#8220;beverage base camp,&#8221; is located in Amazon&#8217;s Seattle headquarters. It has faux gates that mimic the experience of scanning your smartphone or credit card to enter a Just Walk Out store. The walls are lined with shelves of typical grab-and-go products like Milky Way bars, pita chips and gum, and there are coolers stocked with <span class=\"QuoteInBody-quoteNameContainer\" data-test=\"QuoteInBody\" id=\"RegularArticle-QuoteInBody-24\"><span class=\"waslinkname\">Coke<\/span><span class=\"QuoteInBody-inlineButton\"><span class=\"AddToWatchlistButton-watchlistContainer\" id=\"-WatchlistDropdown\" data-analytics-id=\"-WatchlistDropdown\"><button class=\"AddToWatchlistButton-watchlistButton\" aria-label=\"Add To Watchlist\" data-testid=\"dropdown-btn\"><span class=\"AddToWatchlistButton-addWatchListFromTag\"><\/span><\/button><\/span><\/span><\/span> cans and other beverages.<\/p>\n<p>Amazon sets up Just Walk Out stores by first creating a 3D scan using LiDAR machines or iPads that help it determine where to place cameras so they have the clearest view.<\/p>\n<p>&#8220;The goal is to have the fewest number of cameras possible, so we optimize the camera placement so that we can get enough coverage on each fixture to see what is happening in the store,&#8221; Jenkins said.<\/p>\n<p>The system determines what shoppers purchased using several inputs, including the 3D scans, a catalog of product images, the video footage, and weight sensors on the shelves. Amazon in July <span class=\"waslinkname\">updated<\/span> the AI system behind its Just Walk Out technology to handle all the inputs in a store simultaneously.<\/p>\n<p>The new &#8220;multi-modal&#8221; system can generate receipts faster by more accurately predicting which items shoppers have picked up and put back on shelves. The company said these changes should make it &#8220;faster, easier to deploy and more efficient&#8221; for retailers who install the system in their stores.<\/p>\n<p>Amazon&#8217;s &#8220;primary focus&#8221; is selling the technology to third-party businesses and deploying it in small to medium-sized store formats, where the system &#8220;tends to generate a little better [return on investment],&#8221; Jenkins said. Earlier this year, Amazon <span class=\"waslinkname\">also began selling<\/span> its connected grocery carts to third parties.&nbsp;<\/p>\n<\/div>\n<div class=\"InlineImage-imageEmbed\" id=\"ArticleBody-InlineImage-108043758\" data-test=\"InlineImage\">\n<div class=\"InlineImage-wrapper\">\n<div>\n<p>Amazon in September announced several new third-party Just Walk Out stores at universities and sports stadiums.<\/p>\n<p>CNBC<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"group\">\n<p>At one Just Walk Out store, inside Seattle&#8217;s Lumen Field, home to the NFL&#8217;s Seahawks, the company said it boosted sales by 112% last season, with 85% more transactions during the course of a game.<\/p>\n<p>&#8220;It was awesome that we had our own stores as the laboratory to sort of build and launch this,&#8221; Jenkins said. &#8220;But over time, like many things at Amazon, the success of this project and the product will depend on third parties adopting the technology. There will always be more third-party stores in the world than there will be first-party stores.&#8221;<\/p>\n<p>Amazon has used a similar playbook in in the past. <span class=\"waslinkname\">Amazon Web Services<\/span>, the company&#8217;s wildly successful cloud-computing unit, originated from the company&#8217;s need for IT infrastructure to support its fast-growing online retail business. And in recent years, Amazon has leveraged its logistics and fulfillment network to provide services for third parties.&nbsp;<\/p>\n<p>With Just Walk Out, Amazon faces the challenge of convincing retailers that they can trust one of their biggest competitors with handling valuable shopper data.&nbsp;<\/p>\n<p>In 2022, Amazon moved the team behind Just Walk Out from its retail organization to AWS. It marked one of the clearest signals yet that Amazon is serious about selling the technology to other retailers, and could help ease some fears among rivals.&nbsp;<\/p>\n<p>&#8220;They&#8217;re clearly in sales mode,&#8221; said Sucharita Kodali, retail analyst at Forrester Research, in an interview.&nbsp;<\/p>\n<p>Kodali said Amazon still has a &#8220;long way to go&#8221; before the technology is ubiquitous. Getting there will require patience from Amazon investors and data that shows both retailers and shoppers are embracing the technology.&nbsp;<\/p>\n<p>&#8220;There&#8217;s almost a viral effect that will occur over time,&#8221; she said. &#8220;It&#8217;s just going to take a long time because you&#8217;ve got to cycle through everybody in America having this experience, and for the most part, it&#8217;s just Amazon fighting this fight right now.&#8221;<\/p>\n<p><span class=\"waslinkname\">Watch the video<\/span> for a behind-the-scenes look at Just Walk Out:<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>In 2012, Amazon founder Jeff Bezos was asked by TV host Charlie Rose whether his e-commerce company would ever venture into brick-and-mortar stores. Bezos said shoppers were well-served by existing physical retailers and that Amazon wasn&#8217;t interested in launching a &#8220;me-too&#8221; product. &#8220;We want to do something that&#8217;s uniquely Amazon,&#8221; Bezos said. &#8220;If we can &hellip;<\/p>\n","protected":false},"author":1,"featured_media":26486,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[],"hashtags":[],"class_list":["post-26485","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-tech","has-thumb","has-featured"],"_links":{"self":[{"href":"https:\/\/wp.worldtechguide.net\/wp-json\/wp\/v2\/posts\/26485"}],"collection":[{"href":"https:\/\/wp.worldtechguide.net\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/wp.worldtechguide.net\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/wp.worldtechguide.net\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/wp.worldtechguide.net\/wp-json\/wp\/v2\/comments?post=26485"}],"version-history":[{"count":0,"href":"https:\/\/wp.worldtechguide.net\/wp-json\/wp\/v2\/posts\/26485\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/wp.worldtechguide.net\/wp-json\/wp\/v2\/media\/26486"}],"wp:attachment":[{"href":"https:\/\/wp.worldtechguide.net\/wp-json\/wp\/v2\/media?parent=26485"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/wp.worldtechguide.net\/wp-json\/wp\/v2\/categories?post=26485"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/wp.worldtechguide.net\/wp-json\/wp\/v2\/tags?post=26485"},{"taxonomy":"hashtags","embeddable":true,"href":"https:\/\/wp.worldtechguide.net\/wp-json\/wp\/v2\/hashtags?post=26485"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}