Brief:

• Amazon is in talks with theater chain Regal Cinemas and airport retailer Cibo Express Gourmet Markets about installing its cashierless systems at their locations, people familiar with the matter told CNBC. The technology powers its futuristic Amazon Go stores that let customers buy products without checking out at a cash register or using a self-checkout station.
• The report follows a Reuters story from December that said Amazon was considering expanding its Amazon Go stores to airports. Amazon also is looking at bringing its cashierless technology to baseball stadiums, CNBC reported, citing another unnamed source.
• Amazon has explored different business models for licensing its Go technology, such as charging monthly fees or a commission on sales at Go-equipped stores. It has developed a system that could work separately from Amazon Web Services (AWS), per CNBC.

Insight:

The possibility that Amazon is looking to license its Go systems to other retailers may mean they can adopt the technology without significant capital expenditures on software development, opening up the technology to more companies that don't have massive budgets.  

Because many retailers and brands compete with Amazon, its potential customer base may be limited to businesses that don't feel immediately threatened by the e-commerce giant — such as theaters, airport vendors and stadium concessionaires. To build Amazon Go into a software licensing and equipment provider, Amazon may need to bifurcate its development team into a separate business that can serve a broader range of clients while avoiding conflicts of interest. Enabling the system to work separately from AWS could make the offering more appealing to merchants concerned about housing their customer data with the e-commerce giant.

Offering its technology to other retailers may indicate that Amazon is looking for other ways to monetize its Amazon Go technology instead of expanding the footprint of its cashierless stores. Last year, the company was looking to open as many as 3,000 Go stores by 2021, Bloomberg reported. So far, there are only 16 stores, with two more set to open soon in Chicago. Licensing Amazon Go technology may become a lucrative business for Amazon, whose cloud computing service is a significant profit center for the company. In the past year, AWS has grown to generate more than half of Amazon's operating income. Licensing revenue from Amazon Go may help to diversify the company's income even more.

After Amazon bought grocery chain Whole Foods Market two years ago, other retailers have questioned whether they want to use Amazon technology in services like cloud computing. Target began pulling back from AWS, the e-commerce giant's cloud computing service, and shifted business to Google, CNBC reported. Walmart and Walgreens Boots Alliance hired Amazon rival Microsoft for cloud computing services, while Albertson's is working with Microsoft on developing similar cashierless checkout.