AMAZON BETS BIG ON SELLING CASHIERLESS TECH TO RETAILERS DESPITE SCALING DOWN IN U.S. STORES
With a strategic shift of focus in managing its "Just Walk Out" cashierless technology, industry giant, Amazon, plans to solidify its footprint in the future of retail technology. Initially, the technology was implemented in its own stores in 2018 with Amazon Go, expanding later to Fresh supermarkets and two Whole Foods locations. Now, the company aims to sell the technology to third-party retailers, marking an important shift in its retail strategy.
However, amid changing macro conditions and under the leadership of its CEO Andy Jassy, the company decided in April 2021 to remove the cashierless tech from most U.S. stores in a bid to control costs. The current Fresh stores and Whole Foods supermarkets will now feature Dash Carts, carts that keep track of and tally items, in place of the innovative cashierless system.
That being said, Amazon's pivot isn't about turning its back on cashierless tech, but strategically repositioning to cater to more than just its own operations. Already, the company has signed deals with over 200 third-party stores to install the cashierless system, with projections set to double the number in 2022. As a marker of its intent to sell the technology to other retailers, Amazon shifted the team supporting Just Walk Out technology to its AWS unit in 2022.
Despite Amazon’s robust efforts, retail analysts argue that the path to mainstream usage of cashierless technology isn't smooth. A significant challenge before the company is earning the trust of other retailers with something as valuable as shopper data.
In the landscape of future retail, cashierless technology holds groundbreaking potential. With the promise of streamlining shopping experiences, reducing wait times and creating more efficient purchasing processes, such a technology could revolutionize shopping as we know it.
However, the prospect of sharing data with Amazon is a crucial point of consideration for third-party retailers. Trusting a company that is also a competitor with sensitive customer data raises complex questions about data privacy and potential conflicts of interest.
Therefore, Amazon’s foray into third-party cashierless technology platforms could either steer the retail landscape toward a more technologically advanced future or become another chapter in the ongoing saga of data security concerns. Either way, the consequence of such a pivot sits at the crux of shaping the future of retail and how we carry out everyday purchases.
As Amazon continues to innovate on the frontiers of retail with its cashierless technology, only time will tell what impact sharing this technology with other retailers will have on shaping the future of shopping and the delicate dynamics of data privacy in the digital era.