Is Starbucks Paving the Way for Mainstream Walk-Out Cashierless Stores?

Starbucks has just upgraded its two exclusive New York cafes that use Amazon’s Just Walk Out technology. This move enhances the experience for patrons who prefer to use their smartphones when shopping and simplifies the process for staff.

Starbucks teamed up with Amazon to open the first of its two current cashierless stores in NYC in November 2021, located at 59th Street between Park and Lexington Avenues. The companies opened their second Just Walk Out location in July 2022 at 40th Street and 8th Avenue at the foot of The New York Times Building.

According to TechCrunch, Amazon’s Just Walk Out Technology evolved the lounge area to where customers can gain entry by scanning their credit cards, using the Amazon Shopping app’s “In-Store Code,” or by using Amazon One to scan their registered palm at the onsite terminals. Inside, they will find “a small Amazon Go market containing a curated selection of customer favorites from both companies.” Items picked from the shelves are automatically added to their virtual carts, with charges applied after they leave, similar to other locations utilizing Amazon’s Just Walk Out technology.

Now, the first two stores have been upgraded to have “a more intuitive system, making it easier for our Green Apron partners to offer exclusive merchandise and ready to eat/drink items, and for customers to enjoy a seamless smartphone experience,” Jessica Mills, senior director of experience innovation for Starbucks, said in a LinkedIn post. Customers can now “tap” into the Starbucks lounge area and leave with their purchases without waiting in line.

According to Mills, the two stores with Just Walk Out technology serve as “incubators and learning centers, with several programs and insights being scaled across Starbucks.”

However, there are still hurdles ahead. Earlier this year, Amazon announced plans to begin replacing its Just Walk Out technology with Dash Cart in 27 of its 44 Amazon Fresh stores in the U.S. due to customer feedback. Just Walk Out will remain in Amazon Go stores, smaller Amazon Fresh stores in the U.K., and over 130 third-party locations.

According to Amazon, “Customers value Just Walk Out technology because they are usually on a ‘mission driven’ shopping trip, making quick purchases of relatively few items, and can shop just like they would in any other store without standing in line to pay or scanning items at self-checkout. In fact, the response from shoppers to Just Walk Out in small-format stores has been so strong that we will launch more small-format third-party Just Walk Out stores in 2024 than any year prior.”

In comparison, the retailer noted that customers seem to prefer the Amazon Dash Cart — its smart shopping cart — when shopping in bigger grocery stores and making more substantial weekly purchases. The Dash Cart utilizes the same computer vision technology as Just Walk Out, and it allows customers to skip the checkout line. Per Amazon, the cart also “serves as a shopping companion that travels through the store with a customer, helping them locate items with an on-cart screen featuring maps and navigation, and receive personalized shopping experiences, all while tracking their savings and spending in real time.”

Amazon is confident that Just Walk Out technology will thrive in stores with curated selections, allowing customers to quickly grab items and leave. As of April 2024, over 18 million items have been sold in Just Walk Out stores, now present in more than 140 third-party locations across the U.S., UK, Australia, and Canada.

Examples of success include an 85% increase in transactions at Lumen Field and a 56% revenue boost for Market Express at ExCeL London. Just Walk Out also optimizes staffing and allows extended, even 24/7, operation, increased sales, and reduced theft. Amazon is expanding its use in smaller-format stores while improving the technology for larger stores with better algorithms and sensors.

While online chatter has asserted that Amazon uses employees in India to operate the Just Walk Out technology, Amazon claimed that it does not rely on human reviewers for receipt generation. Instead, Amazon’s AI models, continuously improved by annotating synthetic and real shopping data, handle this automatically. Amazon stated that human associates only label and annotate data to enhance the system’s accuracy, similar to other AI technologies.