The Amazon Go convenience store opening in January 2018 shed light on the next new shiny concept in retail — cashierless, checkout-free stores. While Amazon is the biggest player making this push, technology providers such as Standard Cognition and AiFi are building out their own AI-based checkout-free solutions, creating the potential for competition in the space. But all this news makes me wonder: Just how feasible is any of this technology at scale?
Even in the case of Amazon Go, the e-Commerce giant used the Seattle location as a testing ground for more than a year before opening to the public. This means that Amazon went through a year’s worth of data, shopper patterns and trials to get its “Just Walk Out” technology right. While Amazon’s plan appears to be to build as many as six new stores this year, no plans have been announced about including the technology in Whole Foods stores. That seems to indicate that workable deployments in spaces larger than the 1,800-square-foot spot in Seattle are still far in the future.
What makes the concept difficult to scale? For one, there are approximately 100 cameras on the Amazon Go store ceiling. While the costs of these cameras (and the Just Walk Out technology itself) hasn’t been revealed, adding enough cameras to cover a larger footprint would assuredly be an expense that most retailers aren’t ready for.
And while the idea of “checkout-free” is enticing, self-checkout can still be a nuisance even as the technology improves. In my experience, whether at Stop And Shop or CVS, for example, barcode scanners often need an attendant supervising the process to ensure every item gets scanned, or to assist if the machine malfunctions. If self-checkout still has to work out its share of kinks, then checkout-free systems will need human supervision as well.
Technology like RFID chips and tags have certainly benefitted retailers seeking to reduce loss prevention in stores and improve inventory accuracy, but they’re still not perfect. Take this concept and apply it to a cashier-free checkout experience, and it’s possible that items would not be detected after shelf removal, creating a potential parade of items literally walking out of the store. Of course, this appears to be a worst-case scenario of the technology’s potential failure points, but it shows that there are still issues to be resolved.
Retailers Can’t Neglect Workforce If Cashierless Becomes A Reality
Perfecting the technology will create its own repercussions on the retail workforce.
The Bureau of Labor Statistics said that more than 3.5 million people held cashier jobs as of May 2016, with 867,000 of them working in grocery stores and 283,920 working in department stores. If cashier technology improves enough so that fewer cashiers are necessary, retailers would presumably move (or hire) individuals into more customer-facing jobs throughout the store, or in the back office to track merchandise.
I’d hope that any labor cost savings from the technology’s growth would be used wisely, in more efficient forms of labor within the store to improve the customer experience. After all, the store experience must retain some sense of humanity, especially if retailers want to differentiate it from the online experience.
“AiFi (and other cashierless technologies) will save customers countless hours, and dehumanize the experience,” said Chris Petersen, President of Integrated Marketing Solutions in a RetailWire discussion. “Customer experience is situational and depends upon context. When the shopper knows exactly what they want, and speed is at the top of their list, AiFi-type stores provide convenience and value. However, when shoppers are less sure about choices or need assistance in making selections (e.g. apparel or technology) knowledgeable staff become highly valued. There is no single best solution for every situation or customer scenario. The best advice for retailers selling ‘high touch’ products and services is to double down on staff who can differentiate experience in-store as well as service after the sale.”