In 2012, when asked about Amazon’s potential expansion into brick-and-mortar stores, founder Jeff Bezos said the company wasn’t interested in a “me-too” product. He emphasized a desire to create something unique to the Amazon brand.
Six years later, Amazon unveiled its solution: the “Just Walk Out” technology, designed to revolutionize in-store shopping. This system allowed customers to bypass checkout lines by automatically detecting items added to their carts. While initially implemented in Amazon Go stores, the technology later expanded to Fresh supermarkets and select Whole Foods locations.
However, Amazon has since adjusted its strategy. In April, the company began phasing out Just Walk Out from its U.S. Fresh stores and some Whole Foods locations, a move attributed to cost-cutting measures. As part of this shift, Amazon discontinued certain retail chains, closed a number of Amazon Go stores, and paused new Fresh store openings.
Instead of Just Walk Out, Amazon Fresh stores and Whole Foods are now featuring Dash Carts, which allow shoppers to scan and tally items as they shop, streamlining the checkout process. The company still employs Just Walk Out in its grab-and-go marts and UK Fresh stores.
Retail analysts suggest the primary hurdle for autonomous checkout technologies like Just Walk Out is scaling them to the level of ubiquity needed to become a seamless element of in-store shopping. Industry experts like Jordan Berke, founder and CEO of retail consulting firm Tomorrow, believe that widespread adoption requires significant investment to train both retailers and consumers.
At one point, Amazon envisioned Just Walk Out as a core component of its physical store experience. Reports from 2018 indicated plans to expand to 3,000 Amazon Go stores within a few years. The company allocated significant resources, including top talent, to develop the technology, seeing it as pivotal to capturing a larger piece of the $1.6 trillion U.S. grocery market.
However, automating the checkout proved exceptionally challenging and expensive. Cashierless systems demand substantial upfront investments in cameras, sensors, and data analysis. According to Berke, these investments necessitate substantial sales increases to justify the cost.
Amazon’s investment in Just Walk Out was substantial, with approximately $1 billion annually spent on research, development, and capital expenditures in 2019 and 2020. Many retailers have transitioned to simpler alternatives, such as mobile checkout apps or connected shopping carts, which are seen as more adaptable and cost-effective.
Despite scaling back the technology’s presence in its own stores, Amazon continues to pursue external partnerships. The company has licensed Just Walk Out to over 200 third-party stores and anticipates doubling that number this year. Jon Jenkins, former vice president of Amazon’s Just Walk Out technology, emphasizes that this shift is not a failure, but a strategic evolution.
Jenkins contends that the technology has proven its potential, particularly in large supermarket settings. Amazon is now focused on selling its technology to third-party businesses, especially small to medium-sized stores, where the return on investment is often better. Earlier this year, the connected grocery carts were also made available for third-party sale.
By emphasizing Just Walk Out’s external application, Amazon hopes to follow a similar playbook as with Amazon Web Services, its cloud-computing division. With this new approach, Amazon hopes to demonstrate the benefits of the technology to a market that is increasingly accustomed to the concept of shopping without checkout lines but still needs assurance for its future development, and a willingness to trust one of their biggest competitors with handling sensitive shopper data.
Sucharita Kodali, a retail analyst at Forrester Research, believes Amazon has a long way to go to achieve widespread adoption, and suggests that the technology has yet to have a “viral effect” across the American shopping experience.
