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Don’t Check It Out! More Merchants Test Cashierless Stores

By Tim Moran

Based on current technology and business trends, catching somebody with their hand in the till in the future will be as likely as streaming a sitcom through a slide projector. It appears that retailers the world over are testing the idea of cashierless stores—eliminating the need for checkout lines and cashiers.

Cashierless stores could solve a number of retail-related pain points, according to research reports. Ninety-two percent of U.S. consumers get frustrated with the in-store shopping experience—in part because of friction points that these new technologies could solve. A recent study found that customers hate waiting to pay (52 percent) and lines (49 percent), both of which are considered friction points that autonomous checkout could remove.1,2

 

And nearly three-quarters of U.S. respondents think technology will make shopping easier, which could mean that they're open to new solutions like cashierless stores. This could point to a fertile environment for those retailers that can make cashierless stores part of the customers’ day-to-day routine. Observers say that, while cashierless stores aren't easy to bring to market, those who come up with a scalable strategy could move to the forefront.3

 

Cashierless Stores Here and Abroad

 

To that end, U.S. retailers of all sizes are currently either piloting or testing the use of artificial intelligence (AI) to track what shoppers pick up, then automatically bill their accounts upon exiting, thus eliminating the need for cashiers and checkout stations.4 Cashierless technology is also being tested abroad by U.K.-based Tesco PLC and France-based Carrefour SA. Much of what’s happening is an outgrowth of Amazon Go stores, which the online retailer launched in early 2018. Amazon Go relies on hundreds of cameras and sensors in each store to identify products that customers take off the shelves.5

 

Recent AI-based cashierless-tech adopters include Sam’s Club and Giant Eagle, a regional chain of grocery and convenience stores. Giant Eagle said last month that it would test a technology similar to Amazon Go’s at a convenience store in Pittsburgh, where it is based. Sam’s Club plans to offer AI-powered cashierless shopping soon at a 32,000-square-foot store in Dallas, a quarter of the size of its average store.6

 

Cashierless Stores Alternative to Online Shopping

 

While nobody is saying brick-and-mortar cashierless shopping will overtake online shopping any time soon, experts do agree that consumers generally don’t want to see brick-and-mortar stores disappear, for a couple of reasons: 34 percent say it takes too long to deliver what they bought online, and 25 percent are reluctant to pay high shipping fees.7

 

So solving one of the most often heard complaints—a subpar checkout procedure—is something observers believe could change retail’s future. That’s why the Amazons and Walmarts of the world—as well as some smaller retailers—are beginning to invest millions in the necessary technologies to make the physical shopping experience as seamless, smooth, and effortless as possible.8

 

Experts agree that the cashierless buying experience must be easy and convenient. The Amazon Go app is a good example: you download it, store your information, use a QR code to get into the store, fill your bag with groceries … and leave. There’s no need to wait in a checkout line, for the app knows how much to charge your connected account.9

 

Sounds easy, of course, but experts caution that the technology behind cashierless-shopping is both complex and expensive. To make it work, the store must be equipped with multiple cameras and sensors that follow customers around as they move through the store. They detect both you and the products you choose. The technology also must know if a product was returned to the shelf, so you don’t get charged for it. Experts explain that all of this coordination of data from multiple sources, processing, and transmitting in real-time comes at a cost. For example, the first Go location required an investment of more than $1 million in hardware alone.

 

“Consumers increasingly demand flexibility and choice when it comes to payment methods, and paying via mobile app is becoming more popular in the U.K., especially in urban areas and among millennials,” says Andrew Quartermaine, vice president, ACI Worldwide, a mobile technology payments provider.10

 

Cashierless Shopping Not for Everyone?

 

But not everybody is buying into the idea yet—at least not totally, say experts. The monitoring that underlies cashierless technology could raise new privacy issues and worries about customer data falling into the wrong hands—especially if stores deploy facial recognition software in the cameras watching shoppers.11

 

"It could be scary, and it could be creepy," says Peter Trepp, CEO of FaceFirst, a maker of facial recognition tools. "But if it's used to give people a 30 percent coupon on something they want, that is going to be a nice benefit. That kind of experience will help people embrace the technology."12

The
Takeaway:

There remain technology challenges, and it’s expensive, but AI-based cashierless stores could soon be coming to a mall near you. Consumers appear ready to walk away from lines and long waits to pay, and some major retailers are leading the way. While there remain technology, cost, and privacy issues, some experts believe cashierless payments are coming soon.

Tim Moran - The Author

The Author

Tim Moran

Tim Moran is a veteran business-technology journalist. He has most recently been involved in brand publishing startups, including creating CMO.com for Adobe.

Sources

1. “Here's how cashierless stores could solve major retail pain points,” Business Insider; https://www.businessinsider.com/cashierless-stores-could-solve-retail-pain-points-2019-8
2. “How shopper expectations are driving an upgrade to legacy POS,” Omnico Group; https://omnicogroup.com/insights/us-retail-research/
3. “Here's how cashierless stores could solve major retail pain points,” Business Insider; https://www.businessinsider.com/cashierless-stores-could-solve-retail-pain-points-2019-8
4. “Cashierless Stores Make Inroads in U.S.,” The Wall Street Journal; https://www.wsj.com/articles/cashierless-stores-make-inroads-in-u-s-11565602204
5. Ibid.
6. Ibid.
7. “Is Cashierless Shopping the Future of Retail?,” TechNative; https://www.technative.io/is-cashierless-shopping-the-future-of-retail/
8. Ibid.
9. Ibid.
10. “ACI Worldwide Powers Co-op's Pay-In-Aisle App,” PYMNTS.com; https://www.pymnts.com/mobile-applications/2019/aci-worldwide-tech-uk-retailer-pay-in-aisle-app/
11. “It won't stop with Amazon Go: Many retailers are shopping for ways to get rid of checkout lines,” Chicago Tribune; https://www.chicagotribune.com/business/ct-biz-amazon-go-cashierless-stores-20190212-story.html
12 Ibid.

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