This is an excerpt from a story delivered exclusively to Business Insider Intelligence Payments & Commerce subscribers. To receive the full story plus other insights each morning, click here.
Twenty-eight percent of retailers that responded to an IDC survey are testing cashierless technology, according to The Wall Street Journal. In a typical cashierless store, consumers identify themselves upon entering the store, grab items from shelves, which leverage cameras and/or sensors to track shoppers, and then pay digitally, allowing them to leave without physically checking out.
Brands including Amazon — which pioneered the concept with its Go store — Sam’s Club, and Giant Eagle are experimenting with the technology in the US and working with providers like Standard Cognition to launch their stores.
Here’s what it means: In theory, cashierless stores could solve a number of retail-related pain points.
Nearly all (92%) US consumers get frustrated with the in-store shopping experience — in part because of friction points that new technology could solve.
A new study from Omnico found that customers hate waiting to pay (52%) and lines (49%) — both friction points that autonomous checkout could take care of. And nearly three-quarters of US respondents think technology will make shopping easier, indicating that they’re open to new solutions like cashierless stores. This could point to a fertile environment for these stores if they can move past being a novelty and instead become part of customers’ typical day-to-day routines.
The bigger picture: Cashierless stores aren’t easy to bring to market — but the first firm that comes up with a scalable strategy could rise to the forefront.
- Cashierless stores are expensive and challenging to implement. End-to-end implementation for a cashierless store typically costs between $300,000 and $400,000, plus up to $45,000 in maintenance annually, according to The WSJ. On top of that investment, the tech is mostly only usable in small spaces: Sam’s Club, for example, will trial cashierless technology at a 32,000-square-foot store, which is 25% of the size of its average base. Stores also can’t abandon checkout and staff entirely since, in some regions, cash acceptance is mandated. Combined, these factors can make it challenging to launch a solution that improves the retail experience in a meaningful way.
- But the firm that’s first to launch a large-scale store will likely emerge atop the market. Amazon currently leads the autonomous checkout market, and is reportedly looking to scale up the concept or license its technology. If it can do so ahead of other companies, it’s likely to remain atop the space. But development is becoming more widespread — The WSJ reports that at least 100 retailers are working on the technology, but many are under nondisclosure agreements (NDAs) — and a new provider could bust onto the scene and develop a strong lead quickly if its solution proves scalable.
Interested in getting the full story? Here are three ways to get access:
- Sign up for Payments & Commerce Pro, Business Insider Intelligence’s expert product suite keeping you up-to-date on the people, technologies, trends, and companies shaping the future of consumerism, delivered to your inbox 6x a week. >> Get Started
- Subscribe to a Premium pass to Business Insider Intelligence and gain immediate access to the Payments & Commerce Briefing, plus more than 250 other expertly researched reports. As an added bonus, you’ll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally. >> Learn More Now
- Current subscribers can read the full briefing here.
- Neobanks’ have secured a record $2.5 billion in funding this year
- NatWest is piloting a voice banking feature with Google Assistant
- Apple Card is reportedly approving customers with low credit scores to cast as wide a net as possible