Retail's Future Might Be Too Early

Innovation and disruption drive business. Investors love innovation and disruption because they create new market opportunities and growth potential. Entrepreneurs and business people love them because they can build something new that creates new market opportunities, growth potential and attracts investors.

The funny thing about innovation is customers are fickle. Sometimes, new ideas catch on quickly like ChatGPT. Sometimes, it takes 10 or 15 years to catch on, like digital assistant technology. Digital assistant technology never caught on in the 90s. But it took off when smartphones went mainstream. And sometimes, new technology never catches on.

We've been waiting decades for VR to catch on. It hasn't happened yet. The metaverse might change things. It might not. Even with Apple's entrance into the market, it will probably take at least another decade to see if that happens. Segways were supposed to be the future of transportation. But they stumbled in the market and became the province of mall security guards. New Coke fell flat. And the McLean Deluxe is just one of McDonald's many failures to innovate.

The latest example of an innovative idea that's struggled to gain traction is Amazon's Just Walk Out technology. Just Walk Out is one of the most amazing pieces of technology I've ever witnessed.

When you enter a store, you provide a payment method. It can be as simple as tapping a credit card. Then you shop for whatever you want. When you finish shopping, you walk out of the stores with your goods. No cash register. No self checkout. No lines.

The system works. I've used it many times. It's incredible. You can take things off of the shelf. You can put things back on the shelf. You can walk around the store with an item and not walk out of the store with. And the system always works. It knows what you bought. And it charges you the right amount of money. It's like magic. It should be the future of retail.

But Bloomberg Businessweek reported this week that some Amazon Fresh stores that use Just Walk Out technology were being redesigned to include self-checkout lanes.

"We also recognize that it's so new for many, many customers," an Amazon official told Bloomberg Businessweek. "The whole point for us is everybody's welcome in our stores."

That's Amazon's way of saying customers are uncomfortable with the Just Walk Out system. And they're adding the more familiar self-checkout lanes in a bid to get more customers.

Just Walk Out is a significantly better customer experience than self-checkout lanes. There are no lines or hassles. You don't have to look up produce codes or scan barcodes. You just walk out of the store and get charged automatically.

But customers still prefer self-checkout. Why? There are a few factors at play. Some people don't trust the new system. Some people don't like change. Others just prefer doing it themselves (my dad for example, will always use self-checkout lanes even if a cashier is available). And some just don't like the store.

In business jargon, Amazon's technology is too early to market. Sometimes groundbreaking technology hits the market before people are ready to adopt it. That happened with personal digital assistants, WebTV and smart glasses like Google Glass and Samsung SmartEyeGlass.

It could take another decade before customers become comfortable with the Just Walk Out technology. So if Amazon Fresh stores are going to be successful, Amazon will have to compete the old fashioned way -- by stocking and selling the goods customers want at attractive prices.

If Amazon's brick-and-mortar stores fail, it's entirely possible that the most innovative payments experience in the last 50 years will disappear -- at least in the United States. Something like this is going to catch on in Europe and Asia. And that would be a damn shame.

The future of retail payments is here. It's glorious. And I hope it sticks around.