One of Amazon’s many orbiting initiatives that we continue to track is retail-as-a-service (Raas). Partly to expand its business and diversify revenue, the idea is that Amazon can bring its signature logistics and streamlining to retailers. It’s hoping this grows its business in similar ways that AWS did.
This includes its “Just Walk Out” cashierless tech that was incubated in Amazon Go stores before spinning out as the centerpiece of its RaaS play. For those unfamiliar, it uses computer vision and other tech to track items as you shop and charge you automatically, thus avoiding checkout bottlenecks.
Benefits include better customer flows throughout a given store; convenience (thus loyalty); and cost-efficiency. In true Amazon fashion, the latter leads to lowered costs for a competitive edge. As Jeff Bezos likes to say, “your margin is my opportunity.” And retail is next in his crosshairs for disruption.
We All Saw this Coming…
After rolling out its cashierless tech at airport Hudson News locations, Starbucks and fashion outlets, Amazon’s latest move is to integrate it at Whole Foods. You could have seen this coming, given that Amazon owns Whole Foods, and this move aligns with the promise to digitize its operations.
Specifically, Just Walk Out is being integrated at Whole Foods for the first time in Washington DC’s Glover Park. Just as the technology has worked in other implementations, this will let Whole Foods visitors shop and check out while sidestepping (literally) checkout aisles and cashiers.
In addition to being the first time that Just Walk Out is being brought to Whole Foods, this move also marks one of the first times that Amazon has brought any technology to the brand’s customer-facing operations. This is somewhat surprising given Amazon’s ongoing RaaS blitz.
Before this, Amazon’s meddling or (upgrading) in any Whole Foods operations has been limited to discounts and free delivery for Prime subscribers. The question is if the floodgates are now open for Amazon to tech-enable the store. Meanwhile, it’s likely careful not to mess with the brand formula.
Another question is if this is the first domino to fall in Whole Foods’ global locations. With all things Amazon, this could be a live experiment or a sign of things to come. Meanwhile, the newly-cashierless store will re-open on February 23rd. It will include traditional self-serve checkout aisles as an option.
The latter is a key step, as Amazon knows it can’t just flip the switch on this new technology and expect immediate shopper comfort and buy-in. For that reason, it will also staff the store with several employees whose sole purpose is to answer questions and educate shoppers.
Follow Fast
This move, again, was highly predictable. In fact, we’ve been asking during a few years of RaaS coverage when this move would come. Additionally, it aligns with our ongoing speculation that Amazon will continue moving its RaaS technology into adjacent verticals and retail categories.
As noted, that so far includes coffee, fashion, salons, and convenience. Next up could be big box, luxury or sports & outdoor. As this happens, the outcome to watch is if Amazon will set a standard that ingnites competitive pressure for other retailers and RaaS players to follow fast (or slow).
Meanwhile, another accelerant could be Covid-era demand signals. Those drivers and dynamics could morph into something new in the Post-Covid era. In either case, RaaS aligns with all things “touchless.” We’re talking anything that lessens human interaction or merchandise handling.
Beyond Just Walk Out – the centerpiece of Amazon’s RaaS play – there are other orbiting technologies. For example, the Amazon One palm scanner is used as an authentication mechanism for retail checkout as well as other fitting use cases like ticketing at sports & entertainment venues.
In all of the above, the main driver is operational and logistical streamlining. That goes back to Amazon’s disruption playbook. And like it has done with eCommerce and cloud computing, the result will be mass disruption to legacy markets. That’s good and bad for retailers… depending on levels of agility.
