Business News: Amazon Tests Wider Cashierless

Strategy
Haddon, Heather; Stevens, Laura . Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]03
Dec 2018: B.3.

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Amazon.com Inc. is testing its cashierless checkout technology for bigger stores, according to people familiar with
the matter. If successful, the strategy would further challenge bricks-and-mortar retailers racing to make their
businesses more convenient.
The online retail giant is experimenting with the technology in Seattle in a larger space formatted like a big store,
the people said. The systems track what shoppers pick from shelves and charges them automatically when they
leave a store. Although the technology functions well in its current small-store format, it is harder to use it in bigger
spaces with more products, one of the people said.
It is unclear whether Amazon intends to use the technology for Whole Foods, although that is the most likely
application if executives can make it work, according to the people. Amazon has previously said it has no plans to
add the technology to Whole Foods.
Amazon declined to comment. Whole Foods also declined to comment.
The cashierless system is already in use at seven Amazon Go convenience stores in Seattle, Chicago and San
Francisco. The company plans to build more of these small stores, said one of the people familiar with the matter.
Each is typically less than 2,500 square feet and sells drinks, prepared foods and groceries.
Bigger Amazon Go stores would be another threat to traditional grocers disrupted by the online retail giant's
advance into food retail. Whole Foods, which Amazon acquired for roughly $13.5 billion in 2017, has since added
grocery pickups and one-hour delivery. It also has lowered prices for Amazon's Prime members.
Some Whole Foods customers say they don't want to see the cashierless checkout system at a chain known for its
high quality of customer service. "They need to be careful not to break what has made that business successful,"
said Dennis Keim, a 65-year-old retiree from Lincoln, Neb., who shops at Whole Foods at least once a week.
Amazon has moved deeper into physical retail over the past few years after more than two decades shaping how
people shop online. The company has opened more than a dozen bookstores and pop-up shops. "We're new to
physical space, but it's important for us," said Dilip Kumar, vice president of technology at Amazon Go, whose
stores first opened to the public earlier this year.
To use Amazon Go, customers scan an app-generated code on their phones as they walk in, then pick up what they
want and leave without stopping to check out. Video cameras and other devices track customers throughout the
store, charging them for what they take.
Deploying the technology in a Whole Foods store, typically 40,000 square feet and home to some 34,000 items,
would be a bigger challenge. Whole Foods sales are driven by produce items, for instance, whose prices vary by
weight. Tracking them would be more complicated than tracking packaged foods of uniform shapes and sizes.
Scott Cederberg, a 38-year-old software engineer who bought a yogurt at the Amazon Go in San Francisco recently,
said he would try a bigger, cashierless store. "It would be convenient," he said.
Credit: By Heather Haddon and Laura Stevens

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Subject: Market strategy; Food

Location: Chicago Illinois San Francisco California

People: Kumar, Dilip

Company / organization: Name: Amazon.com Inc; NAICS: 334310, 454111, 518210

Publication title: Wall Street Journal, Eastern edition; New York, N.Y.

Pages: B.3

Publication year: 2018

Publication date: Dec 3, 2018

Publisher: Dow Jones &Company Inc

Place of publication: New York, N.Y.

Country of publication: United States, New York, N.Y.

Publication subject: Business And Economics--Banking And Finance

ISSN: 00999660

Source type: Newspapers

Language of publication: English

Document type: News

ProQuest document ID: 2140801322

Document URL: https://search.proquest.com/docview/2140801322?accountid=13360

Copyright: (c) 2018 Dow Jones &Company, Inc. Reproduced with permission of copyright owner.
Further reprodu ction or distribution is prohibited without permission.

Last updated: 2018-12-03

Database: ABI/INFORM Collection,Global Newsstream

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