Amazon dumping Just Walk Out isn’t the big retail technology story it’s cracked up to be. Here’s why

Yesterday, we reported that Amazon was removing Just Walk Out frictionless shopping technology from its Amazon Fresh stores.

This will be replaced by smart carts that allow customers to skip the checkout line but also see their spending in real-time.

Just Walk Out will continue to be offered in Amazon Go stores and some smaller Amazon Fresh stores in the UK. Amazon will also continue to offer the technology to third-party retailers.

“We’ve invested a lot of time redesigning a number of our Amazon Fresh stores over the last year, offering a better overall shopping experience with more value, convenience, and selection, and so far we’ve seen positive results, with higher customer shopping satisfaction scores and increased purchasing," said spokesperson Jessica Martin.

“We’ve also heard from customers that while they enjoyed the benefit of skipping the checkout line with Just Walk Out, they also wanted the ability to easily find nearby products and deals, view their receipt as they shop, and know how much money they saved while shopping throughout the store.”

The media has been reporting the removal of Just Walk Out as if it were a major development. But it isn’t, according to Brittain Ladd, a supply chain consultant and former Amazon executive.

In a LinkedIn post, he said: “The technology never worked as claimed. In fact, Amazon has over 1,000 associates in India working behind the scenes to support the tech.”

“Amazon only has 13 Amazon Go stores in operation with no other openings planned. I anticipate most if not all Amazon Go stores will be closed by 2025. Good riddance. The stores are about as inviting as an operating room.”

The real story, Ladd argues, is as follows. Tony Hoggett, SVP Worldwide Grocery Stores, says that Amazon is going to begin opening more Amazon Fresh stores by the end of the year.

Ladd comments: “For the record - it will be challenging for Amazon Fresh stores to compete against the entrenched grocers who have all the advantages.”

“I’ve reviewed the designs for the new and improved Amazon Fresh stores. I’m not impressed. Amazon continues to embrace gimmicks disguised as innovation.”

“Amazon Fresh isn’t the big story, however. This is: Hoggett announced that a micro-fulfilment centre (MFC) will be opened inside a Whole Foods store in 2024. Amazon has a relationship with AutoStore, and has already installed their system at a facility”

“It has also asked Brightpick to provide designs and costing information for opening Brightpick MFCs inside different size Amazon Fresh stores that will operate in Pennsylvania, Texas and Washington state.”

On average, it costs between $2 million to $4 million to purchase and install an MFC inside a grocery store but the price can exceed $7M in certain cases, Ladd observed.

He concluded: “For every six Whole Foods or Amazon Fresh stores, one MFC is required to fulfil the volume of online orders fulfilled manually by each store. Theoretically, Amazon would need to install 86 MFCs across Whole Foods network of 516 stores to automate online grocery fulfilment.”

“Hoggett also announced something quite interesting. It’s truly the BIG STORY - Amazon wants to fulfil orders for retailers and then combine orders of groceries and other retail products into one delivery for customers.”

“Another option is for retailers to fulfil their own orders but Amazon will still consolidate orders going to the same customer into one delivery.”