Reports emerged this week Amazon is in talks to bring its cashierless Amazon Go technology to airports, movie theaters and baseball stadiums—a move that could help the ecommerce giant really hit the gas in terms of brick-and-mortar expansion, which has been slower than initially anticipated.
A spokesperson said Amazon does not comment on rumors or speculation. She did not respond to additional questions about growth plans.
That’s certainly not shabby, but it’s a far cry from the 3,000 locations Bloomberg reported Amazon was eyeing by 2021.
However, by teaming up with existing retailers and venues, the ecommerce platform would be on track to have hundreds of cashierless stores by the end of 2020.
In a similar move, checkout-free technology company Zippin announced it is opening a cashierless convenience store in Sacramento Kings’ home stadium, the Golden 1 Center. During games and concerts at the venue, fans will be able to buy food and drinks—beer included—with the Sacramento Kings/Golden 1 Center app and/or the Zippin app. (They will also be able to enter the venue with a valid credit or debit card.)
Zippin said its technology provides real-time inventory tracking, which helps staff restock missing items to maximize sales. Fans will also be able to use their apps to see what is available in the store.
“I can’t think of a better place than a sports venue to eliminate the checkout line,” said Zippin CEO Krishna Motukuri in a statement. “When Zippin launches in Golden 1 Center this fall, Sacramento Kings fans will be able to walk in, grab a beer and walk out in under 30 seconds.”
This is indeed one compelling reason why venues like arenas, theaters and airports are good fits for cashierless technology. Customers are typically in a hurry to get to their seats or their gates, so lines are a particularly frustrating friction point.
In addition, stores within these venues are typically smaller formats, which Joanne Joliet, research director at information technology firm Gartner, said is ideal for cashierless tech. They have a limited number of SKUs, making stock easier to track than, say, in a grocery store with thousands of SKUs.
Plus, these are locations where shoppers are mostly grabbing one or two items.
“The technology is not ready for large basket sizes, like a full trip to Whole Foods, so these locations are ideal,” added Andrew Murphy, managing partner of investment firm Loup Ventures.
Another potential point of friction in checkout: bagging.
“When you’re at a stadium and you’re grabbing a drink and a snack, or you’re at the airport and you’re grabbing a magazine and a Diet Coke, you don’t need a bag,” Joliet said. “In the airport, you don’t want a bag. The whole customer journey of [stadiums and airports] aligns with the [cashierless] journey—it’s a quick in and out, small format, you don’t need a bag and you’re on your way.”
While there may be some challenges with customer education, Murphy said Amazon has done a good job in that regard with signage in its existing stores.
“Frequent travelers will get the hang of it quickly, and infrequent travelers will stand in line elsewhere,” he said.
What’s more, rolling out cashierless tech in high-traffic, high-visibility locations will help educate consumers on how to use it and build awareness for the simplicity of it, Murphy said. “Both will increase demand for more cashierless stores,” he added.
But will it also speed up expansion?
Joliet said Amazon’s estimate of 3,000 stores by 2021 seems aggressive.
“Like any retailer, they are constantly monitoring and responding to the changing environment, and so any retailers have an initial store plan and that’s not necessarily what happens,” she added. “There’s no doubt Amazon Go technology works. There’s no doubt Amazon has the capital to invest in real estate and open up these stores, but it’s part of a larger strategic play, which may change.”
In addition, there’s a lot of trial and error now in terms of what will deliver the best cashierless experience, as well as how to use the resulting data to better serve customers overall, so Joliet said it’s still early days.
But she also said this is something with staying power.
“I would expect we will continue to see this in smaller formats with quick customer journey segments, and, again, where you don’t need the items bagged and de-tagged and you don’t need help,” Joliet said. “It’s very self-serve. I expect that will continue.”