Amazon.com Inc’s cashierless shopping experience worth $50 billion

On Monday, in a statement Amazon.com Inc said it is soon announce the creation of a new business line which will sell the technology behind its cashier-less convenience stores to other retailers.

Amazon.com has already signed “several” deals with customers, whom it would not name, towards this end. It will launch a new website on Monday and it will invite others to inquire about its service, Just Walk Out technology.

Amazon’s business strategy is a pointer to its core strategy of building on internal capabilities and then turning those into lucrative service revenue streams.

Its Just Walk Out technology will help streamline warehouse management and package delivery services through its cloud technology strengths.

These capabilities have been pivotal in its Amazon Go chains wherein shoppers can shop without having to get into checkout lines and cashierless experiences. According to an an estimate by U.S. venture firm Loup Ventures, once this hits the maintstream, revenues from this stream could grow as high as $50 billion.

While Dilip Kumar, Amazon’s vice president of physical retail and technology, did not share any market forecast from this revenue stream, he said shoppers’ preferences will determine how big the business becomes.

“Do customers like standing in lines?” asked Kumar. “This has pretty broad applicability across store sizes, across industries, because it fundamentally tackles a problem of how do you get convenience in physical locations, especially when people are hard-pressed for time.”

Unlike Amazon Go stores, shoppers will insert a credit card into a gated turnstile to enter, rather than scan an app. The turnstiles will display the logo “Just Walk Out technology by Amazon,” but all other branding and store aspects will be controlled by the retailer using the service.

Items picked by customers or guests who enter with the shopper will be added to the shopper’s virtual shopping cart. Once the shopper or the group leaves the stores, the shop will then bill the credit card without requiring any bar code scans or checkout lines.

“Amazon will install the technology including ceiling cameras and shelf weight sensors at retailers’ stores, whether they are new locations or retrofits, and it will have a 24-7 support line” said Kumar.

AMAZON WEB SERVICES

Retailers who opt for this technology would also have to opt for Amazon Web Services, which underpins its checkout-free systems Just Walk Out technology.

High demand for the technology is as yet uncertain given that Amazon faces stiff competition in this space. Competitors include AiFi and Grabango are also offering automated checkout to retailers.

Kumar declined to comment on the service’s business model or pricing, saying, “a lot of those are bespoke deals.”

One area of contention could be, who would own the shopper data, something that businesses typically want in order to tailor marketing offers and build their customer base.

Shoppers who want a receipt will be able to type in their email address into a kiosk at any store following which Amazon will send receipts to that address each subsequent time the credit card is used at a Just Walk Out location, no matter the retailer.

According to Kumar, Amazon saves the email address and ties that to the credit card information, solely for the purpose of charging the customer.

He did not get into details of how Amazon would integrate this into retailers’ loyalty programs but said, “These are the retailers’ customers.”

“We prohibit the use of Just Walk Out technology data for anything other than supporting Just Walk Out retailers,” said Kumar.

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