Source: Amazon
Just Walk Out – Just in time or just too soon?
This the seventh in a series of articles from members of RetailWire’s BrainTrust panel speculating on coming retail trends and developments for 2023.
Amazon recently installed Just Walk Out (JWO) at a grocery retailer it does not own for the first time. 2023 will see even more buzz around the technology.
Billed as a “frictionless” store experience for consumers — and, under the covers, an excellent expense reduction tool, especially for grocers — the technology still faces major questions:
- There’s no evidence thus far that the technology is scalable, despite Amazon’s claims.
- The FAQs page on JWO’s dedicated website says, “The installation of the technology can take as little as a few weeks from the time we have access to your store.” A few weeks is a long time to disrupt a grocer.
- Once up and running, the system will need a lot of maintenance, and that’s on the retailer.
- JWO’s website is also clear that customer service issues (e.g., phone calls on being charged for unbought items) are the responsibility of the retailer.
- What are the implications on shrink? Will devices that blind cameras from shopper activities soon arrive?
It’s also not clear that this will really “delight your customers.” The philosophical question here is, how do you define frictionless?
If I’m running in for a single item, JWO is awesome. If I’m doing weekly shopping for a family of four, how frictionless is it for me to bag my own items, do my own scanning (if necessary), and load and unload carts? Won’t home delivery or curbside pickup be more frictionless?
So, I predict there will be pilots galore with Amazon’s JWO and versions from other technology providers. But just as RFID before it, the pilots will go on for a long time and adoption at the end of 2023 will remain very low.
Some consumers will embrace it, but I also don’t think it’s economically feasible yet. Maybe we’ll see examples of retailers using it and customers accepting it by 2025, but I think we’ll find out it’s still too early for mass adoption.
Discussion Questions
DISCUSSION QUESTIONS: Do you see Amazon’s Just Walk Out and similar checkout-free shopping technologies making a significant breakthrough in 2023? Do you agree that the technology still has to prove its appeal to consumers and ROI for stores?
Poll
Loading …BrainTrust
Short answer: No. Paula raises many of the most important issues that cause JWO to be a solution that has plenty of sizzle, but not much beef. The primary barrier is the cost of acquiring and maintaining this technology. In its current iteration, the financial commitment required far exceeds any type of ROI. I do believe that JWO is technology that can have great utility in very specific cases but, overall, this is not going mainstream for a very long time.
No significant breakthrough in 2023. Implementation of the technology is affected by multiple factors. On the retailer side: it is costly, it needs to be accurate, it must not increase fraud (just-don’t-pay) and customers must like it. On the customer side: customers must like it, immediate assistance must be available, it must work equally well with all product categories (packaged/loose/large/small), and it must be super intuitive to avoid abandoned transactions.
While it is a breakthrough technology, theft at self-checkout has become such a hot topic that widescale adoption of Just Walk Out is far out. That being said, anything that can take friction out of the system for shoppers is a worthy endeavor to explore, test, and improve.
While cashierless checkout won’t become pervasive in 2023, there is definitely interest from retailers and concessions at sporting events where speedy, cashierless checkout is a good fit. There are several other companies that offer cashierless checkout solutions, beyond Amazon, such as (my employer) Verizon.
In 2023, more retailers will warm up to checkout-free tech for in-store convenience, speed and loss prevention.
Paula’s right: using JWO to buy a drink at a sports venue is different from buying a full grocery basket. Case studies with quantifiable results will boost demand among grocery retailers, helping cashierless tech gain momentum.
To me the biggest red flag is the fact that there’s no support for retailer implementation by Amazon. If retailers can’t deploy this technology without confusion, it’s simply creating inefficiencies instead of solving for them. I have been a big believer in JWO, and I still am, but retailers have to feel empowered to test it, not discouraged.
Checkout-free solutions certainly still have to prove their ROI and most demographics want retailers to fix other challenges like out-of-stocks and make shopping more personalized first. There is a good analogy to scanning, which took about 20 years to become ubiquitous. Just Walk Out won’t take that long, but rather it will move slowly along in 2023 in select markets and will still be far from a tipping point at the end of the year and likely the end of the following one.
Not significant, but a breakthrough, for sure. This technology takes out the worst part of the supermarket shopping experience, the line at checkout or the line at self-checkout. It will take some time (just like self-checkout did) for consumers to catch on, but it will happen!
Customers want a frictionless experience, and Amazon is one of the leading companies that has provided the technology, both online and in-store. It was predicted several years ago that Amazon would make its technology available to other retailers. It’s still early in the game, and the retailers that take advantage of the offer will be considered early adopters. Amazon will quickly find more ways to create a frictionless installation for the retailer once they have more locations. Not only do I think this is the future of retail, I also believe Amazon will be a leader of the technology. Will it happen in 2023? That may be too soon for widespread adoption, but you’ll notice that more stores are using it.
Just Walk Out technology is interesting. However it is not something customers are crying out for and, given the cost of implementation, that makes it a bit of a dud. It is also typically Amazon to focus on technology rather than the wider experience of the store and the offer. That’s a big mistake. People’s primary drivers of store selection are on factors such as price, location, range, service and so forth – being able to walk out without having to check out is way, way down the list.
Will this grocer use the smart carts in use at Amazon Fresh? As a customer who regularly brings eight bags into the house, I had a real problem with the two-bags-only shopping cart.
Thank you Paula. You bring up all the valid points about this technology, most importantly cost, shrink, and scalability.
I was part of the electronic shelf tag intro a few decades ago. I thought the tech was great and had this notion that all stores would adopt it quickly. Fast forward 20+ years and we are nowhere near a big implementation for the same reasons JWO won’t be implemented on a large scale.
Thank you! I was pretty sure people were weary of me being a naysayer on this technology, but having been a CIO, I can’t be anything but pragmatic. I’m actually relieved to hear some agreement!
Too soon to tell, but on the right track. It’s great to see that Amazon can now drive operations for groceries, but the conversion costs of rip and replace or even add-on aren’t really covered. Paula highlighted some of the costs such as maintenance, customer service, new data management, scalability, and more. The tech will work well for small format stores, airport in-and-out stores, and stadiums and arenas — which Amazon has smartly gone after. In these cases costs are reduced, errors are less frequent, and the end goal of fast shopping with few products at a time is delivered. For retailers with larger formats, lingering shopping times, or specialized shopping there will be few adoptions – except perhaps in pilot mode. There are many low cost players in the frictionless market as well. The drivers for retail adoption will be the type of retailer interested in using the solution, the expenses they will incur to convert to such a solution, and the tipping point for the masses to where the solution is more than a novelty. What was profound was the Amazon-Hudson video and how customers felt like they just experienced something new and different. Until that feeling changes to something expected, the tech will stay in pilot mode.
The only place it’s “frictionless” is a C-store. Everywhere else, it’s just taking other people’s jobs.
Timing is everything: it seems like only yesterday we were worrying about theft, and now we want to embrace something that (IMHO) will make it even easier. Uhmm, I’ll wait.
I usually agree with at least something Paula posts, and if I’m correct in my read that she thinks “JWO” is more about the Amazon PR machine that a step forward — no pun intended — I agree with all of it.
Just because the technology exists doesn’t mean it will work well. Just Walk Out is not suitable for too many of today’s consumers who, sadly, lack the values and honesty of folks years ago. Anyway, JWO just costs too much to install and maintain. The ROI is not there yet.
I produced touch screen kiosks for years. I remember a story of a conference speaker talking about kiosks stating “Pilots! We have more pilots than the RAF!” I agree with Paula, if Amazon says it’s good, plenty will give a pilot program a shot. But like kiosk pilots, only a small percentage will see real deployment and with this technology, the negatives stack up even more.
The arguments for labor shortages and cost saving benefits have a hard sell against the many issues this technology adds to stores. Sounds far fetched, but I would not be surprised that Amazon is selling this to recoup a teeny bit of its investment while miring retailers in copycat mode thinking this is a path to parity with them.
The promise of the wide-scale adoption of Amazon’s Just Walk Out checkout-free capabilities is a long way off. The checkout experience continues to be one of the most friction-filled customer experiences. However, considering the significant capital investments necessary to shift the entire in-store shelving space and floor space with the shelving, scanners, and technological capabilities, the return on investment on “Just Walk Out” technologies do not justify these innovations making a meaningful breakthrough in 2023.
While grocery stores, big box stores, and department stores are not the ideal space to scale out these capabilities, there is an opportunity to scale out the Just Walk Out technologies in convenience stores, gas stations, airport kiosks, and other specialty stores. In a margin-compressed industry, a 50,000-foot plus grocery or big box store’s operating costs prevent the Just Walk Out capabilities from achieving economies of scale for a long time.