In a move Localogy analysts anticipated, Whole Foods will reportedly add Amazon’s “just walk out” checkout technology to its stores beginning next year. Amazon made this cashier-less tech famous in its Go convenience stores, where customers walk in, grab what they want, and just leave. Of course, there is much more to it than that. One big challenge has been to make the technology robust enough to work in larger stores.
According to multiple news reports, Whole Foods plans to begin rolling out the technology in its stores in Q2 2021.
Localogy analyst Mike Boland has written extensively about Amazon Go and also on the notion of “retail-as-a-service”. The latter concept involves taking Amazon’s contactless grocery checkout technology developed for Go and offering it as a platform to other retailers.
In fact, Amazon announced its plans to offer the technology to third-parties in March. The company announced at the time that it has multiple retailer deals in the bag but would not share any names. The pivot from building an internal technology to offering it to thrid-parties is a familiar one for Amazon. The company followed the same pattern in creating its highly successful Amazon Web Services cloud server business.
We’ve thought for some time that Whole Foods was an obvious “client” for the Go technology. Amazon acquired the upscale grocery chain in 2017 for $13.7 billion. Right now, there are 26 Amazon Go locations operating in California, Illinois, New York, and Washington. And Amazon is planning to add more locations. Of course, it’s taken some time to develop Go to the point where it can handle locations as large as Whole Foods. Whole Foods stores typically clock in at between 25,000 and 30,000 square feet.
Aldi Plays Defense
In a related development, the discount grocer Aldi is reported to be investing in “just walk out” technology. A Forbes report suggests the move is a competitive necessity for Aldi, given Amazon’s rapid progress with the technology. In a few years, Amazon has evolved “just walk out” from small mini-mart size Go stores to Go Grocery, a full-service version that at 10,000 square feet begins to rival Aldi’s size, which averages 17,000 feet. Aldi stores are much smaller than the typical 40,000 square foot grocery store. But Amazon’s progression with this technology is clear, and it is an obvious urgent threat to Aldi. It also threatens more conventionally sized rival like Albertsons, Target, and Walmart.
Of course, companies could choose to work with Amazon and use its technology to power their cashier-less stores. But many are likely to see that as a deal with the devil. Hence a rash of competitors has emerged. Some of these competitors include Grabango, Standard Cognition, Trigo Vision, and others. Many of the companies launched in the 2016-17 time frame, which is around the launch of Amazon Go.
Here is the original video from 2016 introducing the Go concept.
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