As a whole, Americans spend a total of 37 billion hours waiting in line each year. Due to technological innovations and a global pandemic, a drastic change is currently taking place within the entire retail market. Store wait times can now be completely eliminated through checkout-free systems.
One of the first movers in the industry was Amazon, which opened its first “Amazon Go” store in Seattle in January 2018. The only thing the customer needs to do is scan a QR code provided for them in the app. After that, the customer can walk throughout the store shopping as they normally would. They can even see a live view of their shopping cart inside the app. Once they are done shopping, instead of waiting to check out, they can simply walk out of the store and be on their way.
Through using cutting-edge technology, including artificial intelligence, computer vision and data collected from multiple sensors, Amazon can implement its ‘Just Walk Out’ system. With cameras and sensors, this system can determine exactly what the customer takes off the shelves, as well as what is put back on.
Amazon has ambitious plans for the future, as the company hopes to open an additional 3,000 cashier-less stores, giving Amazon a strategic advantage over its competitors. This disruptive innovation can be seen spreading across the country, as a number of technology companies are now selling their own checkout-free platforms. Even local grocers and convenience stores have begun to implement similar features into their own businesses.
Although these checkout-free systems were created to make the shopping experience more efficient and enjoyable, the COVID-19 pandemic has been a recent catalyst for the systems’ growth, as both customers and employees have had a growing interest in contactless interactions.
There are several other reasons why companies are eager to integrate these technology systems into their stores:
Profit: Retailers can see increased profit both because they have fewer employees working at cash registers, and because consumers are more likely to shop in a store that does not have lines. About 86% of US consumers claimed in 2017 they left a store due to there being long lines, resulting in $37.7 billion being lost in potential sales that year.
Theft protection: This technology can also reduce theft, as anything taken off the shelves is automatically added to the customer's cart.
Improved shopping experience: Retailers will be able to access new data that will create more efficiency and innovation, resulting in a better shopping experience for their customers.
However, with these benefits also comes disadvantages. One of the biggest obstacles retailers face is the cost of infrastructure. Amazon spent $1 million on hardware alone for the original Amazon Go store in Seattle. With this store only being 1,800 square feet and the typical grocery story being much larger, the fixed costs of this system are hefty and create a barrier to entry. Another disadvantage of this system is the elimination of jobs created by automation. However, early adopters have also realized the opportunity to redeploy their workforce to more value-add assignments. Regardless of these disadvantages, it is evident that checkout-free stores will become much more prominent in the future.
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