I know at some point they got caught basically paying people to watch cameras to figure out what products people we're grabbing. I'm sure were either at the point or very close to the point where AI can successfully do this basically 100% of the time.
So I doubt it's the tech aspect of this, more just the grossness a person feels walking into a store with Amazon's name on it. Compare this to whole foods.
The Fresh stores are basically a conventional grocery store, with electronic tags for every item and quirky pricing. They also have "smart carts" with built in weight sensing and multiple cameras so you can basically put open bags in, say "ready to go" then shop by scanning a UPC before placing each item in the cart. Unscanned item? Error. Weight mismatch? Probably an error but I've never tried. The carts are running what looks like a Linux-based UI with some stuff in docker, I grabbed a picture of a shutdown screen on one not too long ago.