Cashierless Stores & Futuristic Experience Can Have a Big Impact But...


Amazon has gone live with Amazon Go, a cashierless convenience store concept, and several other retailers including Kroger have announced they are about to launch similar cashierless and other innovative store concepts. In order to deliberate upon these market developments, earlier this year, EnsembleIQ analysts and representatives from American Express met a few leading retailers such as Starbucks, Price Chopper, Piggly Wiggly Midwest and a few other major food brands in Miami, FL. The objective was to discuss the business implications related to future store customer experience, cashierless stores, checkout complexities and role of payments.

Some key takeaways from this share group and brainstorming session are summarized below:

    Key cashierless elements to consider
    •  Retailers must accept all forms of payments including EBT within the mobile wallets
    • Training of consumers will lead to greater adoption of unique store concepts
    • Technology uptime in cashierless stores is bound to experience periodical complexities including, but not limited to, automated checkout. As a result retailers should prepare a fall back plan to prevent customer backlash
    • New store concepts are more effective when targeted towards specific customer segments
    • Cashierless stores could save customers time if executed properly-- specifically due to the time saved in terms of scanning/bagging and customers using automated mobile wallets for payments. According to a recent Ensemble IQ and Amex survey, average mobile wallet transaction time is less than 1 minute compared to an average of 2.3 minutes for credit/debit cards. Millennials and others in this research study indicated that they want a greater degree of freedom in terms of their overall shopping experience including checkout. 
  • On average, EIQ research shows that 6 in 10 consumers find current grocery experience full of friction. Over half of those surveyed said that the main source of friction is checkout related. Our research indicates that "a half a minute time gain in using mobile wallets or bank cards has a huge impact on the checkout process." Retailers such as Starbucks and Price Chopper agreed with these findings. While Starbucks is an early pioneer is launching mobile contactless wallet checkout, Price Chopper said that they have seen recent success with Apple Pay.
  • Share of mobile and digital payments in terms of total transactions has increased over the last 12-24 months but it is still well below 10% for a majority of retailers. The share group agreed that a lot of work needs to be done by retailers and consumers in ensuring that digital attains higher consumer adoption levels that does justice to its convenience related promise. Even as consumers have to lap up new digital payments, it is the cashiers and employees in traditional retail stores who can make such adoption easier for consumers by prompting usage. Price Chopper said that it has seen effective improvements in Apple Pay transactions due to customer suggestions made at checkout by cashiers.
  • Retailers are investing in new store concepts and even new brand concepts altogether, but the business justification has to be geared towards specific customer segments and addressing differentiated consumer needs. For instance, Price Chopper opened Market 32 in 2016 and others like Sun Flower Markets have invested in such concepts and have seen success due to hyper targeting of products, experience and messaging. 
  • The meeting attendees also highlighted their favorite grocery concepts and top rankings were given to: Wegmans, Wholefoods, Publix, Giant Eagle, Trader Joe's, Roche, Others. This share group contended that these different grocery store concepts are effective in distinct business areas such as fresh, meats, deli, overall assortment, ease of checkout, pricing, overall convenience, friendliness of associates, among other reasons. 

To conclude, the true impact of cashierless stores and other new store concepts powered by mobile wallets, robotics, smart barcode sensors/scanners, AR/VR, other technologies will be even more profound when all retailers can benefit from common shelf, scan, checkout and pay standards and related capabilities. In other words, future customer experience should not only be in the domain or reach of just Amazon, Walmart, Kroger but all retailers who are willing to invest using a "customer first" approach.

To discuss retail and consumer goods technology benchmarks, trends and insights, please reach out for Sahir Anand, Managing VP Research & Strategy at [email protected] or @sahiranand.

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