What You Need to Know About "Just Walk Out" Technology

2019-11-12 14_06_03-person standing between shelvings photo – Free Market Image on Unsplash

Advancements in technology have been true game-changers for the retail industry, and they show no signs of slowing down. From Artificial Intelligence, Machine Learning, and 5G connections, the future of retail is full of potential as more and more new technologies emerge. In a time of steep competition by ecommerce retailers, these technologies are designed to enhance the retailer’s ability to effectively deliver a seamless, personalized shopping experience.

In this post, I’m going to take a look at how one technological advancement is making waves.

Smart Carts at Sobeys Canada

In October, Sobeys Canada introduced 10 Smart Carts to its Glen Abbey location in Oakville, Ontario, designed to reduce time spent at the checkout line. The Canadian grocery chain partnered with American company, Caper, to launch 10 carts equipped with a barcode scanner and a touchscreen display that shows the tally of the costs of the items in the cart, along with a payment terminal, so that consumers can skip the line when they’re finished shopping. To further personalize the customer’s trip to the store, the touch screen displays suggested recipes, flyer sales, and a GPS so shoppers can quickly find items in the store.

Sobeys is far from the first major retailer to launch automation technology in retail. Amazon Go has been investing in Deep Learning, Computer Vision, and IoT technology in an effort to replace the traditional checkout-with-a-cashier experience. It’s much different from self-checkout stations. Shoppers log into their Amazon Go app, walk into the store, pick up what they want, and just walk out. No lines, no checkout counters, and no registers.

It all sounds very slick, and there are many benefits to retailers and shoppers alike. For instance, eliminating friction at checkout Amazon Go stores earn 50% more revenue than an average convenience store, and according to their estimates, the average Go store makes an estimated $1.5 million a year.

Is the juice worth the squeeze?

Retailers must be willing to invest heavily on innovations, which can be costly. For example, the first cashierless Amazon Go location brought in 50 percent more revenue on average than the traditional convenience stores, but needed more than $1 million investment in hardware alone. As Morgan Stanley estimates, Amazon would need to spend $3 billion to open 3,000 stores. Investments are needed to make disruptive technology happen, but it is unlikely that customers will see the same savings they did in the first Amazon Go store, since so much money is needed to make these 3,000 stores happen.

Cashierless technology: More pros than cons

Since this is an emerging technological trend, there’s bound to be factors that could make consumers second guess their next trip to a just-walk-out store.

For instance, one widespread concern of the innovations in automated retail is the elimination of jobs for cashiers and other floor staff. While this means it could eliminate low wage, low skill jobs, it’s also likely that new retail purchase technology could create high-wage, high-skill jobs. Sylvain Charlebois, a professor in food distribution and policy at Dalhousie University in Halifax, doesn’t believe jobs will be lost, saying:

“AI won’t cut jobs, won’t kill jobs. I actually do think that companies, including grocers, will require probably the same amount of employees with different skill sets.”

In fact, economists view new technological innovation as a good transition for the economy in the long run as workers get better jobs.

Cashierless technology benefits both the customer and the retailer. Smart Carts and "just walk out" technology will gather the shopping habits of its consumers, providing you with valuable data that will help you understand consumer psychology, optimize inventory levels, and reduce clutter in grocery stores. Naturally, technologies designed to track your every move in the store must protect the shoppers and their children’s identities. The trouble lies with trusting any one system too much, and the hurdle that retailers wanting to leverage this technology face is that they must first convince customers that the system is trustworthy enough to use it.

Other minor concerns are issues with false accusations of shoplifting, accidental purchases, and children picking up items, but there are easy ways to alleviate these concerns. Similar to how self-checkouts have associates stationed at the cluster of checkouts, you can have an employee at the store exit, upon or prior to charging for items, to resolve any issues the customer may be experiencing. The employee would be ready if the customer had a purchase dispute or requires additional assistance.

Furthermore, staff can be present to help sell product or answer questions about the products, meaning the retailer is investing in the associates who help to help further enhance the shopping experience.

With forward-looking retailers investing in cashierless technology, more and more companies should be looking at how they too can advance the customer experience. After selecting items the customer wants to purchase, the last thing they want to do is wait in line. They just want to leave. Which is the main benefit of automated retail technology: a faster, more efficient shopping experience. 

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