Turbocharging Convenience Stores with Frictionless Checkout

The first Amazon Go store in Seattle opened in January 2018 and was the first commercial implementation of frictionless checkout or “Just Walkout Technology” in the U.S. retail market. Customers scan the Amazon Go app on their smartphone at entry, grab items off the shelves in the store and are automatically charged for their purchases as they walk out of the store. No waiting at checkout counters, being rung up, counting cash or swiping a credit card.  This YouTube video of experience at an Amazon Go store is courtesy TechInsider and Joseph Choi.

 

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Linda Lisanti in her article “Should You Embrace Frictionless Checkout?” at Convenience Store News reports that the two biggest complaints from retail customers “are long wait times in line and poor customer service.” Many retailers offer scan-and-go shopping technology which requires customers to scan items using the retailer app on their smartphone as they put them in their cart and pay at checkout. However, Michael Suswal, co-founder and chief operating officer of Standard Cognition suggests that AI- and machine vision-based autonomous checkout technologies are better, making store experience seamless.

The autonomous checkout technology is especially suited to fast-moving retail formats like convenience stores. Customers come in, pick up a few things and quickly go their way. It can increase the frequency and volume of transactions and be a source of competitive advantage for stores. Their smaller store footprints require fewer cameras and sensors and deployment can be quick and efficient in a matter of days.

Convenience store chain Rickers (acquired by Giant Eagle) will introduce Skip, a mobile self-checkout and mobile cloud point of sale which is expected to reduce average checkout time from 60 seconds to zero, and convert frequent fuel purchasers to loyal in-store customers. Stores can repurpose store space to display more product assortments or services, lower labor costs, free employees to answer customer questions which will improve in-store customer experience and profit margins.

How will autonomous checkout technology impact impulse purchases, an important driver of margins? As more retailers adopt, will it be an expected service (instead of augmented service currently) and dilute competitive advantage for retailers? How can retailers use the data generated to optimize their merchandise planning and operations?

This entry was posted in Part 2: Ownership, Strategy Mix, Online, Nontraditional, Technology in Retailing and tagged , , , , . Bookmark the permalink.

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