Amazon's $50 Billion Opportunity Is Rolling Out at Whole Foods Stores


Amazon (NASDAQ:AMZN) announced in a blog post on Wednesday that the “Just Walk Out” technology that powers its Amazon Go stores will soon debut at two Whole Foods stores. The cutting-edge system lets customers pick up items and simply walk out of the store. Once they depart, the purchases are charged to their account.

This could be the start of a whole new era for grocery stores, allowing consumers to skip the checkout line altogether and simply take their items and go. This also marks Amazon’s most ambitious rollout of the technology yet.

Starting next year, Whole Foods stores in Washington, D.C. and Sherman Oaks, California will be outfitted with the Just Walk Out system.

A person with a mask shopping in a store for fresh vegetables.

Image source: Getty Images.

A $50 billion market opportunity

Skipping the checkout line is an idea whose time has come. Younger and more tech-savvy consumers are likely to quickly embrace the technology, which might still be intimidating to some shoppers. This changing consumer paradigm represents a large and growing opportunity for Amazon.

In 2018, the size of the automated retail market was estimated at $50 billion, according to estimates generated by Loop Ventures. If Amazon successfully captures even a fraction of this opportunity, the company could generate a significant new revenue stream selling or licensing this technology.

A history of innovation and disruption

This adds to a long and growing list of disruptive innovations that have come courtesy of Amazon. The company popularized the concept of cloud computing and revolutionized online retail. Let’s not forget that Amazon was also among the first to debut a smart speaker powered by voice technology, introducing the world to the Echo and its digital assistant, Alexa.

Given the company’s significant head start in the field of cashier-less checkout, Amazon might just have another winner on its hands.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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