Nowadays, almost every major supermarket chain offers the opportunity to pay at self-service checkouts. Self-service checkouts use less space than registers, have reduced wait times compared to cashier lanes, and need fewer staff members to be controlled. A downside is an increase in shoplifting (Schmidt-Jacobsen, n.d.). Unfortunately, there is no alternative that offers at least the same convenience with almost zero shoplifting.. or is there?
You may have heard of it already, but Amazon has already opened 28 stores with so-called ‘Just walk out’ technology (Statista, 2021). They are called Amazon Go or Amazon Go Grocery stores. By scanning a QR code in the Amazon app on your phone, you get access to the store. Whenever you take an item from the shelf, the app automatically adds the item to your virtual shopping cart. When the customer changes their mind and puts the item back, the app will update the virtual shopping cart automatically. After you have gathered all the desired products, you can just leave the store and you will be billed for the products that you have taken via the app (Cheng, 2019).
So, how does this ‘Just walk out’ technology work? Amazon is using a combination of deep learning, computer vision, and sensor fusion. To get a better understanding of these technologies, I will explain each technology briefly. Deep learning is the creation of machines that use techniques inspired by the human brain’s ability to learn (Mandal, Mehta & Mishra, 2017). It is used to recognize objects, in Amazon’s occasion customers and products. However, just deep learning alone will not recognize anything that happens in the store. That is when computer vision comes into play. It mimics the human vision to look, discover, and method images (Mandal et al., 2017). This is done with the help of hundreds of sensors in the store that register every movement. Sensor fusion is the technology that tracks the movement of customers when cameras cannot register the movement, for example, because the visual input is blocked by another customer. This is done by the combination of accelerometers and gyroscopes in the customer’s mobile phone that together registers the location (Mandal et al., 2017). This technology is so accurate that shoplifting is almost impossible. Apart from that, even when a customer puts an item back on the wrong shelf, the technology will register that action and the customer will not be charged for that product (Cheng, 2019).
However, as disruptive as this concept might look, Amazon has not yet reached the 3000 stores they intended to have by 2021 (Statt, 2018). One possible explanation is the costs of the technology. According to Focal Systems (2019), the system will not prove a break-even in a large-format grocery store compared to operating the front-end with cashiers until after 2040. For now, Amazon should therefore stick with smaller stores.
What do you think about the technology and do you think we will see this much more often in the near future? Let me know in the comments.
References: https://www.researchgate.net/publication/315380585_JUST_WALK_OUT_TECHNOLOGY
https://www.theverge.com/2018/9/19/17880530/amazon-go-cashier-less-stores-new-locations-2021
https://sprintingretail.com/blog/retail-self-checkout-systems/
https://www.statista.com/statistics/1155873/amazon-store-openings-number/
Very interesting article, Jesper! In my opinion, the self-service check outs will totally replace the classical cashiers as we are acquainted with nowadays! At this moment, self-service check outs have a huge positive impact mainly for the customers, since the cost of implementing the technologies that you mentioned above are way too expensive for companies. However, as the time goes by and technology is improving in general, these kind of technologies will become more and more cheaper, reaching the point that the companies’ executive boards would find absolutely beneficial the instalment of the self service check outs.
Personally, I believe that most of the customers in retail shops, are always frustrated by big queues or by slow customer service. Self service check outs have absolutely transformed the customer in-shop experience, by transforming the whole process of paying, thus tremendously decreasing the time that somebody has to spend at the payment counters. As you said, the customers only have to select the products that they want and just exit the store, which stands as a big difference than today’s inefficient process.
If you think about it though, customer experience and customer satisfaction is one of the most important KPIs for most of the companies. My prediction for the future is that when more and more big players start to adopt the new process of checking out, the competition in this part will absolutely grow, forcing smaller players of the industry to follow and also adopt it in order not to fall behind and lose their customer base. However, for now I agree that what is restricting this process from boosting is the huge cost of implementation. Boards are not ready yet to take such a decision if the cost of it excessively overcomes the projected revenues and the estimated benefits from adopting it.
This is a very interesting topic, Jesper. The introduction with the characteristics of the self-service checkouts are precise. To me it’s kind of a trade-off. Supermarkets need fewer cashiers, thus can cut down on personnel costs. But on the other hand, shoplifting will increase as you’ve mentioned.
One other benefit of Amazon’s Go stores is that they can know exactly what each customer bought. Amazon will undoubtedly save this data, and along with for example demographical data they can target specific customer types or groups. Even with self-service checkout or traditional checkouts, the data collection won’t be as comprehensive, since it would depend on some sort of customer card. This card isn’t always personal but a smartphone is.
A while ago, the Dutch supermarket chain Albert Heijn also opened a small digital store (digitale winkel) at Schiphol Airport. Expansion might also face some financial barriers. Especially if you think about the size of this current store. I read it’s like 14m2. A store of this size might be feasible for the technology but most supermarkets are bigger and have more items. It will be quite a challenge to equip a regular supermarket branch with the appropriate technology.
I think the technology will take some time to be used on a larger scale (e.g., regular supermarket branches) but smaller stores like Albert Heijn To Go can benefit from these. Especially the stores at stations where it’s often busy and people are always rushing (to make their switch).