Amazon pushes back on perception of Just Walk Out, announces expansion in third-party stores

Context: A snippet of a Gizmodo report saying Just Walk Out "relied on more than 1,000 people in India watching and labeling videos to ensure accurate checkouts" went viral earlier this month.

• That report followed an interview The Information conducted with Amazon's senior VP of grocery stores, Tony Hoggett, in which Hoggett said the company is ditching Just Walk Out in upcoming and existing Amazon Fresh grocery stores in the U.S. in favor of its Dash Cart, a smart grocery cart.

The latest: Amazon is now pushing back against the view that this strategy shakeup reflects a pullback in its ambitions for Just Walk Out in the broader retail industry, or a sign of "failure" in grocery.

• On Wednesday the tech and logistics giant announced that it will open more third-party Just Walk Out stores this year than any prior year.
• The company tells Axios it expects the number of locations, which serve small-format shops like stadium concession stands and convenience stores, to exceed 240 globally by year-end — more than double what it was at the start of 2024.
• Its smart carts, on the other hand, will be available in more third-party grocery stores this year.

The intrigue: Just Walk Out has been "a centerpiece" of Amazon's supermarket strategy over the past few years, The Information notes.

• The company has tried to sign on retailers like Woolworths and even considered opening its own big-box stores with it, The Information has also reported.

Between the lines: Store size informs Amazon's retail tech strategy.

• Larger stores require more technology to be built for Just Walk Out. That becomes a cost consideration for retailers that have to weigh the system's net benefits compared to the Dash Cart, which basically is just a self-checkout register on wheels.
• Shoppers also buy more and spend more time at grocery stores, and prefer the real-time information that the Dash Cart supplies to help them during their trip, Amazon says. People who pop into an airport shop or stadium, by comparison, go in for very specific things.

What they're saying: "The cost to deploy carts doesn't scale with the square footage of the store," Jenkins says.

• "When you put a rack of [Dash Carts] in the front of the store, it doesn't matter if it's 100,000 square feet."

How Just Walk Out works

With Just Walk Out, sensors, cameras and AI work together to act like a "fancy cash register" — as Jenkins puts it — that can identify what someone takes from a shelf and what to charge them.

• The system is about helping customers "get out the doors as fast as possible" in smaller shops, he says.
• He pushed back on what the company sees as misconceptions around the role that people play in training computer models.

What they're saying: "This notion that there are human reviewers [in India] watching live shoppers — that is completely not true," he says.

• There are Amazon workers in India who do watch some videos "after the fact" to teach machines to label actions and products accurately.
• In "a small percentage of cases," that team — "way less than 1,000" people — helps to make sure that automatically generated receipts are accurate, he adds.

How Dash Cart works

The Dash Cart lets shoppers "bag as they go" on longer grocery trips, Jenkins says.

• The cart is equipped with a scanner, screen and scale.
• After signing in, customers can drop items in their cart as they move around; view a real-time tally of their purchases; see nearby product suggestions and deals; and skip the checkout line once they're done shopping.

The carts currently are in about two dozen Amazon Fresh and Whole Food stores and a handful of pilot third-party stores.

Amazon's grocery strategy

Both Just Walk Out and Dash Cart fall under Amazon's cloud unit, Amazon Web Services, and they're part of the overall company's growth strategy.

• Customers for these technologies include both Amazon-owned stores and third-party retailers.
• "Even if the Amazon retail side is wildly successful, the vast majority of stores out there will not be Amazon stores — that is the bigger market in the long run," Jenkins says.

What we're watching: Jenkins says he has confidence that his team can reduce the cost of processing more video data over time as Amazon's cashier-less tech expands.

• Whether retailers want to pay up for more automation and self payment options at the risk of theft, is another question.

Our thought bubble: Much of the confusion around Amazon's grocery and retail strategy stems from the fact that the company is both a competitor and a tech vendor to grocers and other types of stores.

• Having a checkout-less system is just one feature of a store and doesn't necessarily dictate the entire strategy of retail locations.