Our New Reality - Stores Without Cashiers

The COVID19 pandemic has caused retailers to redirect their operational, merchandising and marketing strategies to align with consumers’ changing shopping habits. When things return to normal, the realignment of retail will have lasting effects. Also, despite the rise of E-commerce and mobile, the physical channel still plays an important role in consumer experience — and retailers are increasingly leveraging technologies to stay afloat. Amazon and Walmart, the Goliaths of the online shopping have long been pioneers in the digital space where they have facilitated fast deliveries and secure checkouts.

We've heard and read (a lot!) about what Amazon is doing with Amazon Go and how Walmart is challenging them with Scan & Go. In India, Kerala saw the country's first cashier-less store followed by in Chennai. Amazon Go store uses a mix of cameras, machine vision and IoT to track shoppers throughout the store. It then charges them automatically for the items they pick up, eliminating the need for cashiers.

In the near future, at a global scale, Amazon’s leadership will continue, while big-box retailers in the US like Walmart, Target, The Home Depot and Best Buy will extend their omni-channel momentum. Digital-first retailers will build on their pandemic-driven gains, while forward-looking brands like Nike will continue to successfully transition to digital and direct-to-consumer or D2C?models. According to a new Juniper Research, cashier-less checkout systems for retail and grocery are expected to process more than $78 billion in transactions by 2022, up from an anticipated $9.8 billion this year. Though only a few such checkout solutions exist today — among retailers like Walmart and Amazon — they will be deployed at more than 5,000 retail outlets over the next five years in the US alone.

Why Pivot Towards A Cashier Less Ecosystem?

According to BusinessWire, 2% of US shoppers get frustrated when shopping in a store, with 86% annoyed at waiting for a refund, 52% angry about waiting to pay and 49% ready to boil over if they are unable to find what they want.

Approach towards cash changed during the pandemic – we prefer to go cashless. The pandemic also accelerated innovation in payments, fuelling the development of low-touch transaction systems with an emphasis on consumer experience. Gen Z and millennials have been adopting mobile payments long before Covid, regularly using technology-enabled payment methods embedded in their phones. They see cash as redundant and therefore an encumbrance.

Everything in China is now cashless thanks to two giant payment platforms – Alipay by Alibaba and WePay by WeChat – that own 90% of the market. The payment mechanic is typically a QR code; whether it is a local street vendor selling home cooked food or a QSR or quick service restaurant.

Over the last months there has been real advancement in the cashless transaction space. In the UK, Amazon’s ‘just walk out’ technology is far from being alone and is in its infancy. A cashless society is not a trend. Arguably it’s a necessity to stay relevant with new audiences and has a role to play in shouldering the future of retail.

Benefits For Retailers And Customers Alike

The objective is simple – Offer omnichannel experience to the customers at every touchpoint.

For retailers, the supply chain becomes far more optimized to the store when it comes to such cashless experiences. The combination of AI and IoT technologies to power walk-out technologies also provides more data on stock and products’ shelf life, enabling retailers to ensure that 100% of their shelf space is allocated. Staff can also receive real-time inventory updates.

Eventually, the walk-out model offers retailers far more behavioral data, going beyond what can traditionally be collected from POS systems. Brands can gain insight into what products are picked up and returned to shelves, how long the customer stands in front of what shelves and what products they select as a result, as well as better understanding the in-store behaviors of visitors who exit without making a purchase. This could level the playing field between online versus offline analytics and insights, offering the type of information that retailers could previously only obtain via their e-commerce websites.

With no need for traditional cashiers, merchants can reallocate those personnel and financial resources elsewhere for greater profit. Eliminating checkout lines and checkout hardware will permit retailers to use their space more efficiently and display more products.

For consumers, cashless stores add convenience and personalization to the shopping experience, with shoppers matched to their online shopping accounts and purchase histories. However, retailers, particularly those outside of the grocery space and merchants will need to reassure people visiting their stores that they are taking the necessary steps to keep their data safe. An improved customer experience and faster shopping process means more sales volume will flow through the store. According to a report by ZD Net, simply removing checkout lines is worth $37.7 billion.

Providing a human element is the logistical advantage and key differentiator that physical stores have always had over E-commerce platforms. Consumer adoption of cashless stores will require retail brands to strike the balance between providing a quick, seamless experience and meeting customers’ desires for human interaction.

Concluding Thoughts

Convenience stores are changing the way people shop. Amazon Go with the “Just Walk Out” shopping experience has fascinated the world. And with other established brands following the lead, it is safe to say that the future of retail is definitely cashier less stores.

It is time to adapt to these improving technologies and the opportunities they offer. While cashier less stores do pose a few challenges, they can be efficiently solved with the right implementation of systems and processes. This way, a brand can embrace every aspect of digital transformation both online and offline to offer its customers a truly omnichannel experience.