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Enterprise Retail / FinTech Innovation / AI Based Investing and Transaction Platforms

The Future of Checkout Lanes

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Editorial Board
Food for Thought
Is the traditional front-end check-out lane dying?

At a recent Verifone Client Advisory Council meeting, attended by senior executives from large department stores, specialty retail, QSR, hospitality, travel and retail bank branches, we had a conversation about the consumer experience that they want to achieve in the next 2-3 years. Some of the things mentioned by most attendees included replacing their current POS solution, changing the store and front-end layout, and increases in the use of both self-service kiosks and mobile POS.  We heard about CMOs that want to eliminate the front-end entirely and use the space for merchandising, and those that wanted to eliminate the front-end clutter. But primarily we heard that large merchants want to improve the consumer experience, better recognize and reward their best customers and focus on making it easier to do business with them.

Since Clarence Saunders, the founder of the Piggly Wiggly grocery stores, opened the first self-service grocery store 102 years ago, the consumer shopping experience hasn’t changed much. We still wander the aisles and select the items we want, then queue up in lines at the front of the store to wait for a cashier to ring up our items so we can pay and check out.  Little has changed in the past century.

Yes, some retailers offer consumers a self-checkout experience, but often in busy stores you still need to queue up for the opportunity to scan the items you want to buy.  And these self-checkout counters are still at the front of the store. 

Oh, and studies have shown that the fraud rate doubles when consumers use self-check-out. In a study of retailers in the United States, Britain and other European countries, professor Adrian Beck and Matt Hopkins of the University of Leicester in England said the use of self-service lanes and smartphone apps to make purchases generated a loss rate of nearly 4 percent, more than double the average.

Other merchants have offered consumers the ability to scan items with a mobile phone app while they shop. I remember Stop & Shop in New England doing this with a dedicated device more than a decade ago. Today some retailers support this on their mobile app, but there are also retailers that piloted this and are now backing away from it. Walmart customers can no longer use their smartphones to pay for their order and skip the checkout line. Despite a successful rollout across its Sam’s Club warehouse chain, Walmart is discontinuing is Scan & Go mobile checkout app. The deciding factor was that too many customers found the process too cumbersome, especially when it came to bagging, weighing and then scanning items, including fresh fruit and vegetables, according to Bloomberg.

Other merchants have dabbled in mPOS, but few have embraced it totally and replaced their entire front-end with mPOS in their stores.

Is the fancy hyper-tech Amazon Go store the way of the future?  Using an app along with cameras, sensors and AI to track each consumer’s movements and items in their basket, and then the payment is magically processed when they leave the store.  After a year-long employee only pilot in Seattle, Amazon opened the store to the public earlier this year and has plans to open a half a dozen more in 2018. 

In addition to Amazon, there are now a number of technology firms developing cashierless technology solutions, and several retailers are reportedly looking closely at the technology and the benefits it could bring to their stores.

Technology firms developing cashierless solutions include Standard Cognition, a Palo Alto start-up that is using its artificial intelligence technology with advanced cameras to eliminate the check-out. A Santa Clara startup called AiFi announced its checkout-free solution for retailers. But unlike Amazon Go, AiFi claims its AI, sensor and camera network-based system can scale from a small mom-and-pop shop all the way up to a big retailer with tens of thousands of square feet and a hundred thousand products.

Walmart is reportedly in talks to install Microsoft's cashier-free technology at its stores. Shoppers would scan their smartphones upon entering a store, sensors would detect items being removed from shelves, and cameras would track the items in the shopping cart. Shoppers' accounts would be charged once they left the store.

Albertsons unveiled its plans for a cashierless store during a recent analyst presentation. Initially they plan to only support their Plated meal kit line.  This would speed delivery for the prepared meal purchases.

What do you think?  Are cashierless stores in your future?

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