Dive Brief:

• Whole Foods Market announced on Wednesday it plans to open two stores next year equipped with Amazon’s Just Walk Out cashierless technology.
• The locations in Washington, D.C., and Sherman Oaks, California, will also offer shoppers the alternative of paying via self-checkout machines or with a cashier at the stores’ customer service desk. 
• This marks Amazon’s latest effort to leverage its cutting-edge cashierless technology across its grocery stores and showcase the system for other retailers.

Dive Insight:

Amazon has introduced Prime discounts, reorganized corporate divisions and centralized Whole Foods’ sourcing operations in an effort to breathe life into the specialty chain that has been struggling to draw shoppers to its stores. Now, it’s playing its technological ace card.

The trial of Just Walk Out technology will happen on opposite coasts and in two very different store sizes. The Sherman Oaks location at 12905 Riverside Drive will have a sales floor that’s just 9,100 square feet while the Washington, D.C., location at 2323 Wisconsin Ave. NW, will have a 21,500-square-foot retail floor.

Both locations are not as big as a traditional Whole Foods format, and if successful could pave the way for smaller, tech-enhanced stores to complement Amazon Fresh locations and reach new markets.

Just Walk Out technology is geared toward tech-savvy Amazon shoppers. But the company, along with Whole Foods, stressed the variety of checkout options at the upcoming stores. Shoppers who choose to use the cashierless system can enter the stores with a QR code available through the Amazon or Whole Foods app, a credit or debit card linked to an Amazon account, or with their palm linked to the Amazon One palm-payment system. Those who don’t want to use Just Walk Out can opt for self-checkout machines or the customer service counter. Shoppers using cash, prepaid cards, Whole Foods gift cards, EBT or WIC will need to use the self-checkout lanes, according to the announcement.

This continues Amazon’s trend of focusing on technology and adding payment options as it tries to differentiate its grocery stores in crowded markets across the U.S. Whole Foods stores began testing Amazon One earlier this year. Amazon Fresh stores, meanwhile, have introduced smart carts at numerous locations and cashierless tech at several U.K. stores along with a location in Bellevue, Washington. Amazon is also marketing its Just Walk Out system to other retailers.

In a blog post, Dilip Kumar, Amazon's vice president of physical retail and technology,  said the company has engineered its Just Walk Out system, which relies on computer vision, sensor fusion and deep learning, to Whole Foods’ services and assortment.

“Customers at these stores will be able to shop stations with self-service fresh-squeezed orange juice and mochi ice cream, while still shopping with the Just Walk Out experience and without adjusting any shopping habits,” he wrote.

The cashierless technology raises the prospect of labor savings, though Kumar stressed the new Whole Foods stores will have a “comparable number of Team Members as existing Whole Foods Market stores of similar sizes.” Instead of being posted at registers, more workers will be out on the sales floor helping customers, he noted.

Whole Foods saw steep traffic declines during the pandemic and has struggled to lure shoppers back into stores. Recent data shows the chain is improving here, and the chain recently began testing a delivery fee in select markets that could prod more customers to shop in-person. Despite these challenges, Whole Foods is still rapidly expanding across the country, with numerous stores planned in major urban markets.