Amazon’s Just Walk Out Technology allows shoppers to leave a store without checking out. A combination of 3D cameras and scanners recognise products that have been purchased and charges the shopper automatically through the app; and an itemised receipt is sent promptly. This eliminates the need for long queues, makes checkout a more seamless, and reduces theft.
So, what’s the issue?
- Price:
Amazon’s Just Walk Out technology is a powerful solution, tracking shoppers and products with high accuracy.
However, a 2,000 square feet store requires hundreds of 3D cameras, which are expensive to purchase and maintain. The sensors alone have many innovative features such as weight sensors, infrared sensors, volume displacement sensors, making them an expensive investment for retailers.
In fact, in 2017, the cost of running the Just Walk Out technology for a year, in a 1,000 square-foot store, was $4 million (that’s without hardware and set up costs). Amazon had to drastically reduce this by 96% to $159,000 but unfortunately, it still takes Amazon roughly 2 years to break even in these stores.
Sigurður Ari Sigurjónsson, Director of Business Development at LS Retail, believes the software is unsuitable for large retailers which will need to invest much more than the aforementioned figure to cover the large retail spaces. He compares Amazon’s technology to HD cameras that are implemented in many stores in Iceland, saying this “microscopic” investment achieves a lot of the same.
Accuracy:
While the technology works well in small Amazon stores, there is a valid fear that the accuracy of the technology will drop when installed in large retail stores. The technology may struggle to identify near identical products and scale up to 80,000 plus SKUs, which is what supermarkets typically carry.
This theory will be put to test by Sainsbury’s who is the latest company to purchase the Just Walk Out Technology.
- Data:
There are also data concerns with the Amazon Just Walk Out technology. The cameras are capturing hundreds of images of shoppers, storing credit/debit card information, as well as tracking consumers’ shopping behaviour.
Many shoppers are uncomfortable with facial recognition technology and sharing personal information such as height, weight, purchase history etc. Consumers are becoming increasingly concerned about the amount of personal data companies collect. Any data breach on Amazon’s Just Walk Out technology can be detrimental for the users and retailers who use the technology.
- Competing technologies:
There are other SaaS businesses who have managed to create competition technologies.
AiFI, for example, also uses shelf sensors and cameras to track products and produce receipts. However, AiFi does not use facial recognition technology, instead it uses clothing colour, height, hairstyle, and other characteristics to identify individuals. The technology costs somewhere between $100,000-$300,00.
Grabango is company which uses small cameras and computer vision technology to track products in-store. Shoppers can walk out of the store and pay through the Grabango app or they can pay the cashier without needing to show or scan any items.
GDPR compliant options for similar technologies are offered by companies like TrackIn. TrackIn uses computer vision and machine learning technologies to provide anonymous data on footfall, demographics, product engagement, shopping duration and more. TrackIn uses existing cameras, eliminating the need for costly investments on hardware. Using this information, retailers can then make data backed decisions on about marketing, sales, merchandising, operations and more.
In summary, although Amazon’s Just Walk Out technology has been hailed as the future of retail, it may not be the right solution for most retailers, considering the price point and maintenance.