Robots as sales consultants, REWE’s self-checkout at the neighborhood store or digital price tags. Slowly but surely, customers get used to and increasingly accept these innovative supermarket concepts. But are customers ready to take the next step the future holds? Are they truly ready for no-checkout stores?
Over the past two years, the first attempts have been made: Retailers in the U.S., Austria, and China have embarked on the major endeavor of implementing no-checkout stores. And their efforts have been crowned by success!
China: Customers are identified by the system
China is a trailblazer when it comes to retail digitization. Last summer, Alibaba made its first attempt at a no-checkout store with its Tao Cafe. This is how it works: Before customers visit the store, they download the corresponding app with a QR code. They must scan the code to enter the store. At the same time, the customer's face is tracked by the system via augmented reality, allowing him/her to enter the store. Now the customer can select items and place them in bags or baskets without having to scan them. To leave the Tao Cafe, customers have to exit through the so-called payment door, which identifies the customer, automatically scans the products and charges the invoice amount to the customer's account. This entire process happens within seconds. Then the door opens, allowing the customer to exit the store.
Alibaba tested the new system for five days with great success. Regardless of whether people showed up in disguise, in large groups or with lots of make-up, the system was always able to correctly identify the person via scan and correlate the corresponding customer account.
Amazon Go? More like Amazon Stop in Seattle
The first Amazon Go prototype store launched in 2016 and enjoyed great popularity. The official rollout of the first store took place in May 2018. While the company is able to keep the "Go” promise of its no-checkout system when customers are exiting the store, things are not as smooth upon entering the shop. The lines to get inside the store are long. That’s because customers must first register by scanning the QR code. System errors, slow users and similar issues result in long wait times. Meanwhile, the actual purchase process runs smoothly. Thanks to cameras, sensors and artificial intelligence, the virtual shopping cart automatically adds the customer’s selected items. When customers exit the store again, the user account is debited with the total amount.
It seems the current problems can be solved once customers and employees have grown accustomed to the system and software meets the requirements. At this time, Amazon declined to comment on whether it has plans to launch additional stores in the U.S. and Europe.
Saturn/MediaMarkt just an experiment?
Saturn /Media Markt opened a no-checkout pop-up store in Innsbruck, Austria. Customers were able to try out the new payment system during the five-month experiment. With great success. The number of visitors and customer feedback speak volumes and can attest to this. "85 percent of customers recommend Europe's first no-checkout consumer electronics store and more than 30,000 visitors from around the world used the new system," according to a company statement. Customers pay for their selected products right at the shelf by using the store’s free app, which they downloaded prior to making their purchase. Immediately after payment, a sophisticated system automatically turns off the product’s anti-theft protection, allowing the customer to exit the store with his/her purchase in hand. No wait times. Not when customers enter nor when they exit the store.
McDonald‘s: No-checkout option?
The U.S. fast-food juggernaut is modernizing its chain almost beyond recognition. Its restaurants completely forego the famous ‘90s style. Customers are enticed by modern shop fittings such as self-service ordering kiosks that boast more and more features. Now McDonald’s take things a step further. The customer not only orders his/her food at the kiosk via touchscreen but also pays there. However, customers still must pick up their food from the service counter.
Round-the-clock shopping at Adolf Würth GmbH
Since April, Adolf Würth GmbH & Co. KG has taken things even further. With Würth24, the company has just launched a no-checkout store for installation and fastening materials that is open 24 hours a day, Monday through Saturday. And there is no staff. Customers can enter the store at any time via QR code, scan their items and take their invoice. This seems to be a promising endeavor. According to systems supplier Wanzl Metallwarenfabrik GmbH, the concept will be further enhanced on an international basis once the test run has been successfully completed.
Retail: Innovative and productive
The new no-checkout systems are expensive but offer modern customers quite possibly a significant benefit. This is reflected in the high level of acceptance and positive feedback the no-checkout supermarket test stores have encountered.
Privacy and data protection concerns seem to play a far less important part than the German General Protection Regulation would suggest. It seems that customers are willing to divulge their data if it makes their everyday shopping experience simpler and more convenient. There is a major benefit for brick-and-mortar retailers as well: customers are more accessible because data can be effortlessly collected without the need to ask consumers cumbersome questions. It will be easy to detect how satisfied customers are, what and when they like to buy certain items, how much they spend and also track their buying behavior. This enables retailers to recognize and address previously unidentified customer needs at an earlier stage.