Amazon Is Sharing Cutting-edge Technology It May Change The Way You Shop For Groceries

Posted: Mar 17, 2020

Amazon Go will begin selling the Just Walk Out technology that fuels the 25 cashier-less convenience stores in the U.S. market. This move by the company falls in line with the diversified business strategy that has made Amazon more profitable. It will allow other companies that lack the resources to develop their own software the opportunity to use cutting-edge technology to improve the customer experience. The move will also broaden the brand image for Amazon and provide it with robust shopping behavior.

Just Walk Out technology

Amazon developed the Just Walk Out technology to support a truly seamless customer experience at the cashier-less Amazon Go stores. Shoppers can scan an app as they enter a store, pick merchandise off the shelves and leave the store without stopping to check-out. The receipt is sent to the customer after they leave the store.

Amazon Launches First Full-Sized Go Grocery Store
Amazon has patented the Just Walk Out technology and is constantly improving the algorithms. Selling the technology to other companies will offset development costs for Amazon and provide added revenue to its business. Silicon Valley has shifted the mindset over the past decade from keeping newly developed technologies in-house to providing open access and collaboration with external partners.

Amazon is building on internal capabilities to drive profit

The company continues to invest in technology development and infrastructure to support business growth. In the case of the Just Walk Out technology, this is a triple win for Amazon since it will gain revenue from the grocery/convenience sector as more stores open, will have access to an increased volume of shopping behavior data and gain revenue from companies who license the technology. Furthermore, the licensing companies may be required to use Amazon Web Service (AWS) as the cloud storage with the Just Walk Out technology. Amazon’s strategy is to build out its internal capabilities across various platforms including technology advancements, data storage, logistics and cloud services.

Why this technology is significant

For over two decades the retail industry has had access to radio frequency identification (RFID) applications in the retail environment. RFID requires a tag to be placed on individual items so that beacons or other technologies can identify the items to collect various data. While vertically integrated companies have been able to use RFID to track inventory movement or understand design issues more quickly, most companies have not been able to implement wide uses of RFID due to cost. Andrew Lipsman, principal analyst, eMarketer agrees, “RFID is very expensive, especially in a business where there is a high inventory turnover of products which makes tagging items a high labor expense. The RFID implementation process is difficult and cumbersome.”

The technology used in Amazon Go environments supplants the need to tag every item and instead uses computer vision, sensor fusion and deep learning to track inventory in real-time through the shopper journey. The fluidity in the shopping experience delivers extreme convenience. Although it would make sense for Amazon to roll this out in Whole Foods, there was no commitment made by the company to do this in the near future. The company did state its plan to open 3,000 Amazon Go stores in the U.S.

By Shelley E. Kohan
March 15, 2020
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