It feels redundant to keep saying it these days, but Amazon.com Inc. (Seattle) has driven the reimagination of the shopping experience once again.
The company’s Amazon Go concept – opened in 2016 as an employee-only beta test in its headquarters building – has checkout-free shopping, all facilitated through smartphone technology, apps and virtual carts. The system includes overhead-mounted cameras tracking shoppers’ movements; weight sensors on the shelves; and the Amazon Go mobile app, which customers swipe on their way in so each product removed from a shelf is automatically charged to their accounts.
Amazon opened the store to the general public earlier this year and has announced a second Amazon Go convenience store, also in its headquarters city.
But Amazon certainly has no patent on digital innovation. San Francisco-based Zippin, brainchild of former Amazon employee Krishna Motukuri, also uses cameras, weight sensors and a free downloadable app to be scanned at the entrance, for its initial convenience-store trial.
The purpose, in this case, is not to grow a chain of profitable stores but to showcase the technology for potential clients and investors. Yet profitability is top-of-mind for most retailers.
Urban Outfitters Group (Philadelphia) has tested self-checkout in a New York store. According to CEO Trish Donnelly, the benefit is not only to unclog the pay-and-leave process, but also to free up in-store personnel to roam the sales floor, serving and advising shoppers.
Century 21 Department Stores LLC (New York) is deploying mobile point-of- sale (mPOS) technology at its 13 U.S. locations. The smartphone performs as an electronic terminal for all customer transactions.
Alibaba Group (Hangzhou, China) launched a cashier-less Tao Café, using facial and voice recognition systems to track purchases. Bills are automatically generated as soon as customers pass through a gate that identifies them using biometric technology.
In Mountain View, Calif., Inokyo has opened what it calls the first of “a new generation of retailer stores,” a snack-and-convenience store with an app that connects to a payment method and a sensor in the front of the store. In this case, overhead cameras scan body shapes and clothing as a means of identifying and tracking shoppers. On-shelf cameras, rather than weight sensors, click when products are picked up or put back. Shoppers scan again on their way out, and later get a receipt detailing the charges.
Inokyo didn’t originally require scanning on the way out, but it discovered that customers felt like they were stealing. And that’s one of the challenges of the new technology: Digital services companies and an increasing number of retailers may be charging forward, but many consumers are stuck in the traditional processes. It’s one of the reasons Walmart Stores Inc. (Bentonville, Ark.) dropped its mobile scan-and-go experiment in 120 U.S. locations. The retailer said low usage didn’t support the effort.
“Conversion is the issue,” says Lee Peterson, EVP, Thought Leadership and Marketing, at WD Partners (Dublin, Ohio). “People resist changes to their rote behavior.”
Peterson says that fewer than 20 percent of shoppers use their smartphones to shop and to pay. “Starbucks Corp. [Seattle] has the highest smartphone app usage in the QSR industry, and it’s only 22 percent.”
Cost is another issue, according to Jason Goldberg, SVP, Commerce, at Publicis.Sapient, Boston-based digital platform designer. “Amazon is one of the few retailers in the world that has good app penetration,” he says. “For most retailers, getting someone to install an app is a huge deal – arguably more painful than getting them to check out.”