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Amazon said earlier this month that it was removing its “Just Walk Out” cashierless technology from the 28 Amazon Fresh and two Whole Foods grocery stores in the U.S. that used the system. The news triggered a cascade of headlines declaring the demise of the technology, one of Amazon’s boldest bets to reinvent the way consumers buy products at brick-and-mortar stores. The reality is a bit more complicated. Yes, it's fair to view the move as a setback from one perspective, but Amazon is not abandoning Just Walk Out technology and is actually expanding its reach in some categories. To learn more about the company's plans, I recently spoke to Dilip Kumar, an Amazon vice president and one of the co-inventors of the technology. Here's the Q&A, my latest for Fortune, in which we also discussed what role human staff actually plays behind the scenes. What do you think of this latest decision by Amazon?

What can we learn from Amazon Fresh's operational frustrations? Amazon Fresh, the high-tech grocery store venture, has encountered operational frustrations in its expansion efforts. Here are the key frustrations reported by customers and employees: 🔹 Cashier-less Checkout Challenges: Customers have faced difficulties in scanning items, delays in processing payments, and confusion with the checkout process in the cashier-less system. 🔹 Issues with Computerized Shopping Carts: Customers have experienced malfunctions, inaccurate item tracking, and challenges in navigating the store with the computerized shopping carts. 🔹 Staffing and Training Concerns: Insufficient staffing levels and incomplete training modules have led to longer wait times for assistance and employees feeling ill-equipped to handle various aspects of store operations. These frustrations provide valuable insights for businesses in the grocery industry. By addressing these challenges, companies can enhance the customer experience and streamline operations. Key takeaways include the importance of user-friendly checkout systems, reliable technology, and comprehensive training programs. #amazon #cashierless #grocery #retail #selfservice

JWO’s Exit from Grocery - A hot topic with a silver lining The recent announcement of JWO’s exit from its 1P grocery business has sparked widespread discussion among tech media. Some have criticized that Amazon literally ‘walked out’ on its self-checkout tech and instead opting for the Dash Cart as an alternative.(https://lnkd.in/gD8i6NXc) The ROI for cutting-edge frictionless retail technologies, which leverage computer vision and sensor fusion, has long been debated, setting aside the allegedly remote 'human' workforce needed for labeling and verification. In this regard, the revelation that Amazon, a pioneer in checkout-free technology, is stepping away from its 1P business ventures has seemingly cast a shadow over the future of such technologies. Despite this, JWO had previously embarked on a different path, focusing on spreading its technology through a 3P business model, primarily targeting smaller-formats commercial establishments in the form of SaaS offerings. This strategic pivot suggests that JWO’s technological prowess has achieved significant market penetration. Moreover, it appears to signal a commitment to further expanding its presence within the 3P sector, leveraging this moment as an opportunity. In a conversation with Amazon’s Vice President, Jon Jenkins, it becomes clear that while the landscape of frictionless retail technology is evolving, the ambition to innovate within this space remain undiminished. This perspective sheds light on the nuanced strategies tech giants are adopting in response to the dynamic retail environment, underscoring a continued pursuit of innovation and market adaptation. Looking forward to seeing the future of frictionless retail proving its profitability in palpable ways. #Justwalkout #Amazon #FrictionlessRetail #CheckoutFree

·      Back in February, Amazon Fresh responded to facing economic headwinds with cost-cutting measures including headcount reduction ·      More recently, the grocery division is “cutting shifts, killing hundreds of jobs, even supplementing the store’s signature high-tech systems with traditional checkout options.” ·      Word from employees believe “2023 is a make or break year” for Amazon Fresh ·      Bloomberg reported Amazon is overhauling its grocery business by including upgrading warehouses and expanding delivery to non-Prime customers.  Amazon Fresh is also getting a new look in the near future. ·      Problems seem to be building, as staffing issues are causing inadequate training of employees and are also causing stretched coverage in the stores that can compromise safety measures.

Remember when Amazon opened their "just walk out" grocery stores that automated the payment process? Amazon just announced shutting this down because TURNS OUT they never actually worked. At least not automatically. For every 1.000 transactions, they needed something like 700 human reviews. It was a Mechanical Turk situation all over, powered to a very large degree by low wage labor. I mean, not just the physical infrastructure (stocking shelves, inventory, cleaning) was run largely by low wage labor, but even the "high tech" automated parts. I'm not super surprised by this, but the degree of "fake it till you make it" is a little mind blowing. Also, fascinating/worrying that Amazon managed to keep a lid on this for 8 years without anyone reporting on this, as far as I know? Anyway. Automated grocery stores were never really automated, the humans were just hidden out of sight. It was, essentially, Artificial Artificial Intelligence.

This situation with Amazon Go is a prime example of how a mitigation strategy can evolve into a critical technology dependency. In 2015, developing cashierless technology required substantial investment in weight-detecting shelves, cameras, and infrastructure, while image recognition software had yet to mature. To bridge this gap, a temporary offshore service was used to verify system accuracy until the technology caught up. Amazon Go officially launched internally in 2016 and to the public in 2018 through Amazon Go/Fresh stores before the system had been thoroughly vetted and productized. This rush to market led to numerous operational challenges. Customers experienced delayed charges—ranging from hours to months—and issues with incorrect or unprocessed charges due to item misplacement and hardware malfunctions. This not only impacted customer satisfaction but also led to significant financial disputes with banks over the false charges. Despite technological advancements, relying on human intervention to manage these issues revealed a stark reality: the expected ROI did not materialize, and the costs—both financial and operational—were significantly higher than anticipated. The workaround to go to market became the solution.🤦🏽♂️ This teaches an important lesson in product development and deployment: leadership must align short-term goals with the long-term vision and strategic objectives to avoid such pitfalls. https://lnkd.in/exWqhUw6

Ever clicked "order" with confidence, only to face the chaos of an unexpected return? Join the writer of this tale as they navigate the labyrinth of Amazon's return process—a journey filled with self-service kiosks, uncooperative storage cubes, and the creeping realization that free returns might be becoming a relic of the past. 📦 From a puzzling experience at Whole Foods to the dizzying dance of QR codes and poly bags, this narrative unfolds the realities behind our click-to-buy culture. One-seventh of all retail goods were returned last year, sparking a shift in how companies handle our second thoughts. And it seems even Amazon, the giant of hassle-free shopping, is subtly steering us towards keeping those not-quite-right purchases. What tangled web do returns weave when first we practice to receive? Find out in this adventure that might make you think twice about hitting that return button. Curious how the saga ends? https://lnkd.in/evPzEhmx

For the "progress is always linear" crowd, this report says that Amazon is ditching its much-hyped "just walk out" grocery shopping model. Some interesting tidbits, beginning with Fake Automation: "Though it seemed completely automated, Just Walk Out relied on more than 1,000 people in India watching and labeling videos to ensure accurate checkouts. The cashiers were simply moved off-site, and they watched you as you shopped." Next, how unreliable such technology is: "700 out of 1,000 Just Walk Out sales required human reviewers as of 2022. This widely missed Amazon’s internal goals of reaching less than 50 reviews per 1,000 sales" If Amazon can't make it work, it's probably just still too early. https://lnkd.in/eFErqPYD

A ‘network’ of independent grocers supporting Amazon Dash Carts would double US self-checkout #SCO sales to ~$144+bn in less than 7 years.   Dash Carts empower grocers’ most profitable cohort, the 68% of customers filling a shopping cart with ~30+ items, accounting for ~92% of sales & most profits.   Dash Carts increase by 10%—20% the gross annual spend per checked-in ‘shopping cart’ user to $8,217—$8,964 compared to dumb carts, with a 5X increase in profit.   Dash Carts also reduce or eliminate legacy SCO shrink such as under-rings, unauthorized removals, sweethearting, ticket-switching, total/partial scan bypass, etc. from 3.5% to less than 0.32%.   Crone Consulting LLC independent estimates, no public disclosure by Amazon.   You need a shopping cart & #UI to increase One More Item #OMI, the Dash Carts has both, with the benefit of Amazon sharing SKU-level slotting fees from Consumer Packaged Good #CPG trade promotions, accounting for 95% of all #advertising.   Grocers make more in slotting fees than they do in EBITA. Dash Carts provide a realtime, dynamic, in-aisle attribution audit trail, with a ‘cost per acquisition’ model for #tradepromotions, all while benefiting consumers saving an extra $250—$1,000+ per year. Only Google’s offer inventory is bigger than Amazon’s, but they don’t have in-store Offline to Online & vice versa tracking.   Amazon will leverage these benefits to establish merchant acceptance akin to the launches of Visa, Mastercard, Discover Financial Services & American Express, but with a more compelling value proposition.   Think of the Dash Cart Network as a Payment Facilitator #PayFac displacing legacy #POS systems ‘one basket at a time’ from Verifone, NCR Voyix, Fujitsu, Toast or any other ‘closed’ anonymous POS deployer in the #shoppingandretailindustry lacking an enrolled user base.   But unlike any other, Amazon can ignite in-store adoption with 310+mm active users, like they do already for 6+mm #merchants on Amazon.com.   To compete, Kroger 84.51˚, Walmart & Target might build their own; for all others it’s Amazon Dash, Caper (Instacart), Veeve Inc. & maybe PayPal if they partner with any or all of the above.   Amazon is not walking away from Just Walk Out technology #JWO, but integrating it with Dash Carts to improve the accuracy for #computervision on both platforms, dynamically verifying JWO ceiling cameras & shelf-sensors with Dash Cart scans & weight scale measurements.   The same approach could be used for acceptance testing without manually reviewing video by Tesco, Shufersal w/Trigo; ALDI USA w/Grabango; Ahold Delhaize w/AiFi Inc.; Albertsons Companies w/AWM & others like Zippin.   Read Patrick Tibke’s story from Vixio Regulatory Intelligence including our recent mystery shopping video of using Dash Carts in the Amazon Fresh in Woodland Hills, CA last week.   #innovation #technology #bankingindustry #onlineshopping #ecommerce #commerce #mobilepayment #digitalstrategy #payments #CPG #retailers #mobilecommerce

With its cashier-less checkout and computerized shopping carts, Amazon Fresh was supposed to revolutionize grocery shopping when it launched at the height of the coronavirus pandemic. But the high-tech stores have proved more frustrating than fun for some customers, current and former employees say. In February, as the company cut costs and laid off workers amid economic head winds, Amazon pressed pause on its grocery expansion, halting projects in more than a dozen locations and leaving prospective landlords and locals in the lurch. One former employee — speaking on condition of anonymity to protect his career — said staff were told this year could be “make or break” for Amazon Fresh. On Wednesday, Bloomberg reported Amazon is overhauling its grocery business, including upgrading some of its warehouses and making delivery available to non-Prime customers. Amazon Fresh is also getting a makeover, de-emphasizing some of the high-tech technology and introducing traditional grocery store touches like self checkout, more items and coffee and doughnuts near the front of the store. https://lnkd.in/gjtx5EfX