Amazon will flip-flop on cashierless technology after the company said it is pulling its Just Walk Out system out of most of its U.S. Fresh and Whole Foods stores. The boundary-pushing retail innovation first launched in 2018 allows shoppers to skip lines to check out. However, in April 2023, as part of an attempt to cut costs Amazon declared that it would not open any new Fresh stores and would close several of its Amazon Go locations.
Rather than trying to continue with Just Walk Out, which is significantly infrastructure-intensive, these stores will begin using Dash Carts. These carts will actually track what goes into shoppers’ bags and will thus afford a more efficient checkout process. While Amazon will shift its use to Dash Carts for most of its grocery and store chains, the company will continue to have used Just Walk Out technology in its grab-and-go locations as well as its Fresh stores in the UK.
It happens at a time when Amazon is reviewing its retail strategy. As much as the Just Walk Out system was hailed to change the face of shopping in stores, it has proven difficult to scale. According to Jordan Berke, founder of the retail consultancy Tomorrow, automating checkouts is expensive and complicated infrastructure that is hard for retailers to pay for their required budget. For instance, Walmart said it estimated that getting such a system up and running would be between $10 million and $15 million for a 40,000-square-foot store.
As an example, opening thousands of Go stores was part of the original vision. Reality proved to be a little more complicated, however. Today, the technology is licensed by Amazon to third-party retailers and more than 200 stores use the system.
Moving ahead, the store will focus on further refining the Just Walk Out solution for third-party customers in small and medium-sized retail formats where the return on investment is closer to optimal value. The long-term play with Amazon is similar to what happened with Amazon Web Services: building trust and then delivering value to a retail partner will be the kicker. It will be difficult and expensive going forward before cashierless technology finally gains broad acceptance.
