Amazon Pursues Retail-as-a-Service, Looking to Sell Go Tech to Cinemas, Airports
Amazon is duplicating in retail the strategy that would make its cloud infrastructure business one of the world’s 10 or 20 largest companies if spun out on its own: use its top-notch talent and vast capital reserves to create a best-in-class asset that can support its own operations while being sold to competitors and adjacent businesses alike.
This time, it’s not Amazon Web Services, the cloud underpinning Amazon’s operations and those of other companies around the world, but Amazon’s Go technology that is being peddled to new clients. Bezos’ e-commerce behemoth is in talks to sell the flashy cashierless solution to movie theaters and airports, CNBC reported.
If Amazon is successful, the play to sell Go to other businesses may some day turn what now appears a revolutionary technical advance (with potentially devastating consequences for cashiers) into a commonplace asset. Just as AWS, the B2B play partially financing Amazon’s low-margin retail biz, supports thousands of businesses unbeknownst to their customers, Go-as-a-service could come to change all of retail without many consumers even realizing Amazon is behind changing checkout norms.
Go has competitors, including Standard Cognition, Mercaux, and Leap. “I think this is going to be a hard sell for Amazon,” said Michael Suswal, co-founder and COO of Standard Cognition. “Nearly all the retailers we talk with see Amazon as the competition. And most of the opportunity in the autonomous checkout space is in retrofitting existing stores — something Amazon really can’t do due to the complexity of their system.”
In December 2018, our lead analyst Mike Boland predicted Amazon would follow precisely this AWS-inspired playbook: test Go out in its own stores before selling it to other companies, both reinventing the standard for retail convenience and sucking more dollars out of an industry ravaged by the Seattle giant’s core business. Of this play, called retail-as-a-service, or RaaS, Boland wrote, “Retailers and tech vendors alike will have to get ready for this shift or get out of the way. There will be lots of margin compression, which is signature Amazon. Meanwhile, Jeff Bezos continues to live up to his word in warning the market of impending conquests.”
It continues to be Amazon’s world. Until other players can prove their ability to stay in a market Amazon sets its sights on conquering, retailers (and consumers) will just be living in it.