DISCUSSION

Should Amazon rent out its Just Walk Out tech?

October 7, 2019Written by Tom Ryan

Amazon.com is “in talks” to bring the Just Walk Out technology it uses to support its Amazon Go stores to OTG’s CIBO Express stores at airports and Cineworld’s Regal cinemas, sources told CNBC. Amazon is also exploring deals with concession stands at stadiums and baseball parks. Amazon sees the potential to have “hundreds” of third-party locations using its check-out free technology by the end of 2020. The two purposes of the move for Amazon are said to be:

Reducing its reliance on online shopping by expanding its brick-and-mortar presence at a faster pace and lower commitment than building its own stores;
Supporting Amazon Web Services (AWS) and other services by forming bonds with companies that would ordinarily consider Amazon competition.

The move would also enable Amazon to further test its cashierless technology amid reports that the pace of Amazon Go openings — 16 current locations — has gone slower than planned. The CNBC report also indicated that only Seattle, Amazon Go’s first location that opened in January 2018 on Amazon’s campus, is profitable. The heavy infrastructure costs, including sensors and cameras to track what shoppers pick up, has been raised as a concern for the Go locations. While Amazon is seen having a lead over most others, selling its Just Walk Out technology to others will face competition from Microsoft, a slew of technology start-ups, as well as homemade solutions from Walmart, 7-Eleven and others. A bigger priority may be making retailers more comfortable signing up for AWS, the biggest contributor to Amazon’s bottom line. AWS, which controls about half of the cloud computing space, works with many suppliers to retailers but apparently few retailers themselves due to competitive concerns. Microsoft Azure clients in the retail space include Walmart, Walgreens, Kroger and Gap. Target in 2018 moved from AWS to Google Cloud. A list of clients highlighted on AWS’ retail solutions website page includes Sainsbury, but largely it is fashion retailers selling their own brands that use the service, including Fast Retailing (the parent of Uniqlo), Levi's, Lululemon and Tapestry.

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