Checking out the future of retail

4 minute read
Amazon talks payment challenges, AI commerce, and where biometrics goes next

Trillion Dollar Questions


Dilip Kumar

Vice President of Applications, AWS

In a world where convenience is king, friction in the checkout process is bad for business. Studies show that around 80 percent of consumers will avoid standing in a line in-store, even if it means leaving to visit a competitor or abandoning the purchase entirely. The same is also true in e-commerce: A recent survey shows that 90 percent of shoppers cite limited payment options as a reason for cart abandonment.

Frictionless checkout has therefore become a holy grail for retailers. As a retail juggernaut, Amazon is at the forefront of the quest to find new ways to deliver seamless experiences both online and in the physical world. The aim, says Dilip Kumar, VP of Applications at Amazon Web Services (AWS), is to give customers “the gift of time.” We asked him about Amazon’s recent work…  

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You recently announced that your cashierless “Just Walk Out” technology is a good fit for small-format stores. Where in particular do you think it has potential, and why? 

Just Walk Out technology shines in smaller stores because in these locations customers are usually on a “mission driven” shopping trip, wanting to make quick purchases of relatively few items. It means they can shop just like they would in any other store but without standing in line to pay or scanning items at self-checkout.  

Our vision for Just Walk Out technology has always been to go where people put a premium on convenience. And I think that we are still very early in the evolution of this technology. Places where you are consistently standing in line present an opportunity for Just Walk Out: airports, universities, hospitals, car charging stations, stadiums and more. I also feel like we're barely scratching the surface in terms of geographic expansion. Just Walk Out technology is currently available in the U.S., UK, Australia, and Canada. But there's no reason why it can't work in Brazil or in South Africa or in Japan, as the appeal for retailers to extend store hours, whether staffed or not, is reasonably universal. In fact, the response from shoppers to Just Walk Out in small-format stores has been so strong that we will launch more third-party Just Walk Out stores in 2024 than any year prior, more than doubling the number of third-party stores with the technology this year. 

What’s a big challenge that you think we still need to solve around in-store frictionless payments? 

The payments industry is extremely complex. There are a lot of parties involved. One of the challenges is getting to real-time payments without increasing fraud risk. What are the right checks and balances to achieve that? These things normally cause delays, but I feel this is a big potential area of progress. 

How do you see conversational commerce improving in the future? 

I think it’s going to keep improving because of how good we're getting at both near-field and far-field acoustic technologies and machine learning models that can understand voice intent and actions. Better voice input combined with artificial intelligence will result in ever greater efficiencies. It will be particularly important in many places where voice input is superior to text-based inputs, like driving. With today’s in-car dashboard, people can use voice prompts for a limited set of actions such as selecting music, making calls, or asking for directions. I think the kind of applications will naturally increase over time as the technology becomes more sophisticated. People will be able to use car AI assistants to get personalized recommendations on the best places to stop along their route for food or coffee, or perhaps they’ll use it to approve purchases that the assistant—if it knows enough context about them—anticipates they might need.  

You offer Amazon One, your payments tech, to non-Amazon merchants. What is your strategy for getting them to see you not as a competitor but as a potential partner?  

AWS has had a long history of providing services to companies, so this is no different. When we launched this service, we knew people shop in more places than just our Amazon locations. Life happens when you're at a stadium, at college, at an airport, or on vacation. We knew that our success included solving our customers’ problems in these places, so we’re looking to provide Amazon One—our palm recognition service for identity, payment, entry, age verification, and loyalty membership—to a wide range of customers and partners. We don’t ask these businesses to replace other forms of identity or payment technologies to be able to use our offering. We want Amazon One to be able to fit in alongside other solutions for identity and payment so customers will always have choice. We always think about this as a partnership.