Bloomberg has a story out today saying that Amazon’s cashierless checkout ambitions are much bigger in both size and scope than its current bodega-sized Go stores. A source told Bloomberg that Amazon is looking to outfit its own larger-sized grocery stores with its checkout tech and also license it out to other retailers.
Bloomberg’s story complements an earlier CNBC report saying that Amazon was looking to license out its cashierless checkout technology, though the licensees listed then were airports and movie theaters. But if we know that Amazon is opening its own larger format grocery stores, developing new Go-like systems that work in larger format stores and is now actively seeking to license out its cashierless technology, what does that mean for all the other startups now in the cashierless checkout space?
As a quick refresher, Amazon Go stores are grab-and-go retail experiences. Shoppers scan their phone as they walk into the store where banks of cameras and sensors keep track of what people grab and what they keep, and charge them automatically upon exiting.
Amazon isn’t the only company working on this cashierless checkout technology, and we cover a number of the other players in the space. Trigo, Grabango, Standard Cognition, Caper, Zippin are all startups looking to retrofit existing grocery stores with cashierless checkout tech.
Many of these startups have even already announced retailer relationships: Trigo is being used by Shufersal in Israel and Tesco in the U.K., Grabango has Giant Eagle, Caper has Sobeys in Canada and Zippin has Lojas Americanos in Brazil.
There are a lot of grocery retailers in the world, so there’s plenty of opportunity to go around, but one has to wonder how Amazon’s 800 lb. gorilla will alter the current playing field.
To be sure, I don’t imagine large, nationwide retailers like Albertsons or Kroger, who are already scared of Amazon’s grocery growth and working overtime to fight them off, would want to then turn around and license Amazon technology. And Amazon’s largest rival, Walmart, has already built out its own Intelligent Retail Lab, which currently uses cameras and sensors to monitor inventory, but seems primed for expansion into cashierless checkout at some point.
However, smaller, regional chains might be interested in adding Go-like capabilities to their stores. And they might be more willing to license Amazon tech, which comes with a brand recognition, world-class technology and a sense of permanence (i.e. they won’t run out of money and shut down).
Amazon would surely be keen to license its Go tech to smaller chains, perhaps even at a discounted rate because it would give the company something just as valuable as money: all that shopping data. By licensing out the means for purchasing, Amazon would still get all that data about what is bought and when, without having to build out stores everywhere in the U.S. This data could then be used to feed the algorithms to make the stores they do build out physical spaces more efficient.
All this is to say that 2019 was a transitional year for cashierless checkout startups with lots of partnerships announced publicly. But with Amazon looking like it’s getting into the game, those startups will need to scale up and lock down even more retailer agreements before it’s too late.