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Business Insider has an interview with Joel Larson, the former head of checkout innovation for Walmart, in which he says that the checkout-free technology used in Amazon Go stores “has too many limitations to succeed in large stores,” that its “accuracy accuracy rates decline in stores with too many products that are similar in appearance,” and “is expensive and generates significant heat.”

“The Amazon Go store is just a fairy tale for retailers that actually want to make money,” Larson says.

The Business Insider story notes that “when Larson left Walmart, he joined Innowi, a company that makes handheld mobile checkout devices.”
KC's View:
He could be right. Or he could be wrong. I would make three observations.

One is that considering what Larson currently is doing for a living, it is certainly in his best interests to argue against the broad efficacy of checkout-free systems. (It isn’t just Amazon doing this, after all.) So I think it is important to take his criticisms with a grain of salt.

Second, Amazon has had a pretty good run challenging conventional wisdom and making stuff work that many people predicted never could. So I would be loathe to bet against Amazon on this one.

Third … where is it written that for Amazon Go-style technology to be successful and impactful, it has to be applied to large stores? After all, we are entering a time of urbanization, when companies are developing small-store formats that will be relevant to where the demographic trends are headed. That seems like a pretty ripe opportunity to me.

It may not be a coincidence that Larson’s comments seem positioned to counter a piece from the Associated Press about Amazon Go and how “startups and retailers are racing to get similar technology in stores throughout the world, letting shoppers buy groceries without waiting in line.”

The AP story points out that “Amazon doesn’t say how much money its cashier-less stores make. But analysts from RBC Capital Markets recently visited Amazon Go’s two San Francisco stores to come up with a number. Based on their observations of traffic patterns, they estimated about 400 to 700 customers per day will visit each of the roughly 2,000-square-foot Amazon Go stores, generating sales of $1.1 million to $2 million annually, assuming an average purchase of $10. At the high end of that range, it works out to twice the sales of a typical U.S. convenience store, RBC calculated.”