Not so long ago, shops with no staff, no checkout and no queues seemed like a distant future... but they are poised to become our new retail reality.
Indeed, the pandemic broke out, and “autonomous retail” sprung up like mushrooms in a field (technology improvements to run such kind of stores helped too!).
We use the term “autonomous retail” for the labour-light, technology-heavy retail segment that encompasses the following approaches:
- Unstaffed stores or ‘just-walk-out’ stores, where shoppers simply retrieve items from shelves and walk out. All the customers need is a smartphone with the shop app.
- Unstaffed shelves or ‘scan & go’ stores, where consumers have to scan their products, pay at a self-service device, and walk out.
A real disruption to the retail market
For a long time, retailers have tried to solve the friction of the checkout experience. From opening more registers to implementing self-service systems, no solutions have yet fully satisfied both the retailer and the customer.
These latest concepts – especially the checkout-free technology, seem to be the answer mainly because the checkout process is entirely eliminated, consigning the entire, time-consuming payment process to the scrapheap. The end of the quest for the Holy Grail, for both retailers and customers!
Without question, preferences and daily lives of consumers are almost unrecognisable compared to what they were five years ago. It’s all been shaped by the on-the-go lifestyle – Apple pay, Google play, contactless payments, everything is done as quickly and conveniently as possible. Free time has become more precious, and this makes a long checkout line, along with other frustrations associated with traditional in-store shopping, feel like an unnecessary waste of time, even if we really do need the groceries.
In addition, the crisis circumstances led us to change almost every aspect of our lives and behaviours, including the way we shop. Consumers expect retailers to make their lives not only easier but also safer.
As a result, all the big name retailers across the globe have rolled out their ‘just-walk-out’ or ‘scan & go” frictionless checkout trials. Walmart, Carrefour, Tesco, 7-Eleven, Aldi, Starbucks… such initiatives are growing rapidly since the pandemic, reflecting a way of life that is increasingly being accepted by consumers.
Beyond the glitz and glamor of this new business model
The advantages of autonomous retail are hard to ignore.
For consumers: it’s shorter and safer, without queuing. It’s a convenient 24-hour contactless shopping experience. For some, it’s also an opportunity to avoid driving tens of kilometers to shop for essential goods. The recent example of Sweden, where the start-up Lifvs has opened 27 unattended food stores in underserved remote rural locations (where traditional shops closed down because they struggled to stay profitable) shows the great usefulness that autonomous retail can bring.
For retailers: it reduces operational and labour costs. It offers greater profit as the store is running 24/7. It provides increased access to customer data and in-store behaviour. Thanks to cameras and video analysis every move is monitored and tracked. It also helps retailers free up resources and allocate them to other duties such as stock management and customer service.
Where’s the catch?
Frictionless shopping solutions seem to reduce most or even all the drawbacks of traditional shopping methods.
However, many challenges have yet to be surmounted to allow unstaffed stores to become ubiquitous.
The first challenge is consumers’ concerns! In GlobalData’s latest survey of 2,000 consumers in the UK (December 2021), 56% said they would not use a cashierless grocery store even in a convenient location to them. Mainly because they have concerns with data privacy and with the potential job losses that these stores represent.
The second challenge is shoppers’ adoption. Clearly the demand is there as consumers expect a fast and convenient shopping. However, the technology might prove tricky for some less tech-savvy customers, the elderly, or people with disabilities.
Finally, human interaction - keeping social-distancing measures of course. This is an essential part of in-store retailing, of the customer experience and of the brand value. Unmanned shops by their nature completely lack this element.
Is the future a hybrid format?
Retailers trialling autonomous stores, whatever the format, are still looking for best practices and operational efficiency to fully satisfy their customers.
The German retailer REWE may have found a good alternative. Indeed, since October 2021, in Cologne, REWE offers customers a hybrid shopping experience. Shoppers can either shop “traditionally” and pay at checkout or use the checkout-free option. A kind of ‘win-win’ strategy that allows people to choose their preferred shopping method within a same location. Furthermore, customers can benefit from the entire range of goods available in the store, when they can only access to a smaller selection with autonomous retail – due to limited store size.
Will automation take over?
Don’t worry, we won’t see robots taking over entirely in future!
The overall economics of automated store operations are still in question, given the reduced product range, high rental costs, and significant technology investments required. At the current stage, unstaffed stores still cannot achieve fully unmanned status: staff are still required to carry out manual tasks, such as restocking items.
We can expect to see further trials from leading retailers, but it is improbable that we will see a large-scale rollout anytime soon. However, one thing is sure: retailers implementing process automation achieve benefits than their competitors struggle to match.
If you would like to discuss how Glory’s proven retail cash automation solutions can help you improve your processes and store profitability today, get in touch or you can read about it here.
