Reality bites as cost of Amazon Just Walk Out technology hits home

Experiments like Just Walk Out tech powered Amazon Fresh stores will never work on a large scale for “normal” retailers.

That’s the view of Sigurður Ari Sigurjónsson, Director of Business Development at LS Retail.

Sigurjónsson was responding to reports that Amazon is said to be halting its checkout-free convenience store expansion plans in the UK due to claims about the macro-economic environment and revenue performance.

In a LinkedIn post, he said: “One of the reasons (it won’t work) is that the cost of technology in the beginning is far too great for this concept to work.”

“Putting in all this investment upfront in AI, security equipment and all the other hardware means that you need to either have a lot of foot traffic through your store or high enough margins. In this case the technology is just a burden on Amazon’s operations!”

He added: “This is not the same challenge for our customer here in Iceland, Nær, that has opened a 24/7 unmanned store.”

“The reason for that is that they decided that they will trust their customers to a certain degree.”

“Yes, they invested in an extensive HD security camera system, so they can see what is happening in their store and who is there. But that investment is microscopic in comparison to the technology investment in the Amazon Go/Fresh concept.”

Sigurjónsson explained that the self-checkout process is handled by a standard solution that can be a SaaS solution with low upfront investment.

This is an app that retailers using LS Retail’s solutions will rebrand with their look and feel and make available for their customers – either for unmanned stores or to use alongside a regular manned PoS.

“It has low upfront cost, which means that these retailers are taking a low level risk to add modern technology to their checkout process,” he commented.

Sigurjónsson concluded: “Ultimately, this unmanned concept is very promising. The question remains, how to balance it so it will be profitable, not only for the retailer but also for the community that uses these stores?”

“Here in Iceland this concept is a way for neighbourhoods to get back their “merchant on the corner” – small convenient convenience stores close by where you can get what you need fast compared to having always to drive to a big supermarket.”

Autonomous storesStaff WriterAmazon Fresh, Amazon Just Walk Out technology, Check-out free stores, Sigurður Ari Sigurjónsson, LS Retail, Unmanned stores, Stores, Næ, Iceland, UK retail, Convenience storesComment