Amazon Adjusts Physical Store Strategy, Shifts Focus to Selling “Just Walk Out” to Retailers

Amazon’s view on physical stores has changed over the years. In 2012, founder Jeff Bezos said the company had no interest in opening brick-and-mortar shops. But six years later, Amazon launched its first Amazon Go store, using advanced “Just Walk Out” tech, where customers could shop without standing in line to pay. After the launch of Amazon Go, Amazon expanded its cashierless tech to Fresh stores and some Whole Foods locations. By 2020, Amazon also began licensing its “Just Walk Out” system to other retailers. The technology was rolled out in busy places like airports, stadiums, and hospitals, offering a quick and easy shopping experience.

Strategy Change

Despite its early success, Amazon has now adjusted its strategy. The company has now removed its cashierless systems from its Fresh and Whole Foods stores in the U.S. This change is tied to CEO Andy Jassy’s efforts to manage costs amid tough economic times. Amazon also shut down 8 Amazon Go stores and slowed down its plans to open new Fresh stores. To replace the costly “Just Walk Out” system, Amazon is using Dash Carts in its Fresh and Whole Foods stores. These smart carts track items as customers shop, allowing them to skip the checkout line, much like the old system. However, unlike “Just Walk Out,” Dash Carts do not require complex setups like ceiling cameras and shelf sensors.

Though Amazon is scaling back on its own cashierless systems, it continues to use “Just Walk Out” in Grab-and-Go Mart and UK Fresh locations. Amazon’s new focus is on selling its cashierless tech to other businesses. More than 200 third-party stores have already installed the “Just Walk Out” system. Amazon believes that smaller stores offer a better return on investment for this technology. The company plans to double the number of third-party stores using the system this year. While Amazon may not be using “Just Walk Out” as much in its own stores, it remains a key part of the company’s plans to lead in retail tech, especially in smaller, more cost-effective setups.