Should You Embrace Frictionless Checkout?
NATIONAL REPORT — Unlike omnichannel, which is all about connecting with customers through multiple touchpoints, frictionless checkout is about giving customers a seamless in-store shopping experience with little to no interaction — rivaling the speed and convenience of e-commerce.
E-commerce giant Amazon is credited as being the first to bring frictionless checkout to the U.S. retail market with the January 2018 opening of its Amazon Go store in Seattle. The store’s “Just Walkout Technology” enables customers to grab items off the shelves and walk out without checking out. Customers merely need to scan their smartphone using the Amazon Go app upon entry, and are charged for the goods picked up during their shopping trip upon exiting.
The Amazon Go concept recently opened more stores in Seattle and expanded to Chicago, and the company is also reportedly eyeing San Francisco and Los Angeles for future store openings.
“Certainly, pressure from Amazon is forcing retailers to pay attention and understand what shopping means to consumers going forward,” said Michael Suswal, co-founder and chief operating officer of Standard Cognition, a startup with its own artificial intelligence (AI) platform that allows buyers to grab what they want without having to go to a cashier. “Two of the biggest complaints most U.S. retailers receive from customers are long wait times in line and poor customer service. Eliminating the need for waiting in line allows retailers to put more resources toward enhancing the in-store customer experience.”
While several grocery and mass retailers already offer scan-and-go shopping technology, where customers can use provided scanners or an app on their phone to scan items as they put them into their cart, Suswal believes such approaches are proving ineffective and the best option for retailers is to remove checkout entirely by moving to AI- and machine vision-based solutions.
Convenience store chain Ricker’s recently announced it will roll out Skip, a hybrid of mobile pay and the Amazon Go concept, to its 58 stores throughout Indiana. Skip's technology reduces the speed of checkout from an average of 60 seconds to an instant pay-and-go action controlled by the customer. Through a partnership with ACH debit provider Zipline, Skip also brings down transaction fees for retail businesses.
With Ricker’s rollout, frictionless checkout has officially arrived in the convenience channel, and many industry insiders believe it’s only a matter of time before there’s an industrywide movement.
"By adding Skip to our arsenal of customer service competencies, we expect to see higher frequency and volume of transactions simply from the competitive advantage this partnership will provide. Not to mention being able to convert frequent fuel purchasers into loyal in-store customers," said Quinn Ricker, CEO and president of Anderson, Ind.-based Ricker's.
Frictionless in the Convenience Channel
The convenience channel is where this technology can “shine” because it’s a fast-moving space, according to InContext Solutions Chief Technology Officer Tracey Wiedmeyer. InContext Solutions is a provider of enterprise mixed and virtual reality solutions focused on retail optimization and shopper engagement.
“People are coming in and out constantly, and they’re choosing just a few items at a time, not an entire cartload full. It just enhances that convenience factor,” Wiedmeyer said.
Suswal of Standard Cognition agrees. He says autonomous checkout can work in any kind of store, from a convenience store to a large supermarket to a designer apparel store.
“Most convenience stores are ideal retail environments for deploying autonomous checkout. On one hand, autonomous checkout allows convenience store operators to repurpose the valuable real estate that cash registers currently occupy. On the other hand, the relatively smaller store footprints typical of convenience stores allow for very efficient and quick deployments of autonomous checkout technology. A typical convenience store could be covered by fewer than 25 cameras, which can be installed in one to two days,” Suswal noted.
With the rise of e-commerce competition, particularly from Amazon, and retailers being forced to reinvent their stores, he sees frictionless checkout being a long-lasting technology.
“It is inevitable for the survival of most retailers. Autonomous checkout technology will reduce labor costs, improve customer experience and improve profit margins for retailers,” he said. “We believe customers will seek out, and demand, experiences like this. With autonomous checkout, shoppers will, in the very near future, no longer be required to open their laptops or even their smartphones. The technology creates an opportunity for brick-and-mortar retailers to develop an in-store experience worth closing your laptops over. Autonomous checkout is here to stay.”
Wiedmeyer echoes that this is not a fad. He foresees this kind of technology only improving, becoming more efficient, and eventually one day being the norm. However, he cautions retailers to think before jumping in because it won’t be right for every store or every situation.
“I don’t think AI will take over completely in the retail space,” he said. “People crave human interaction, and there will still be a need for people when it comes to answering questions and helping with more than just the checkout.”
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