Amazon.com Inc (NASDAQ:AMZN, ETR:AMZ) is changing the way its brick-and-mortar Fresh stores operate by scrapping its no-checkout ‘Just Walk Out’ technology.
In an interview with The Information, Amazon’s senior vice president of grocery stores Tony Hoggett said the tech will be replaced by ‘Dash Carts’, through which customers will scan items as they shop.
The seemingly innocuous change forms part of a wider strategy to revamp Amazon’s in-person retail offering after a series of hits and misses since moving into bricks and mortar in the mid-2010s.
Amazon’s first physical retail venture, Amazon Books, closed in 2022 after launching in 2015.
The Amazon 4-star concept launched in 2018, which offered products rated four stars and above, Top Sellers, and New and Trending items on Amazon.com, closed in 2023.
But in a broker note, Bank of America analysts saw grocery expansion for Amazon “as a when, not if, event given the frequency of grocery shopping, potential for customer lock-in, and advantages of scale”.
They continued: “The transition from Just Walk Out is part of the broader push to revamp Fresh locations with more customer-friendly features like brighter colors and coffee shops, as opposed to the possibly ‘online-first’ design of Amazon's previous locations.
“Overall, we think that store changes will continue to be an evolution in Amazon's grocery strategy to find what resonates best with consumers before a significant grocery investment cycle.”
BoA predicted increased levels of retail investment throughout 2024. Given the “continued expansion of North America retail margins”, Amazon shares are still considered a Buy among BoA analysts.