Unattended Commerce: Three Companies Exploring the Future of Cashierless Stores
The notion of employee-less stores has gained interest worldwide, prompting buzz around kiosk-based ordering in restaurants, cashierless checkout, and completely unmanned stores by companies including Amazon, JD and BingoBox.
Driven by start-ups and enormous tech companies, these technologies have the potential to usher in new business models, lower operating costs and save customers time. Foodstuffs, Lojas Americanas, and Iris Nova are three early examples of how unattended commerce can be used to improve the customer experience and drive sales.
Foodstuffs: bringing image recognition to shopping carts
In 2018, Foodstuffs partnered with AI solutions vendor IMAGR to introduce smart shopping carts to one of its Four Square supermarket locations. The carts, called SMARTCARTS, use machine learning and image recognition to identify items as they are added to the cart. The shopper logs in using the SMARTCART mobile app, and payment is automatically processed when the consumer leaves the store. Foodstuffs has announced intentions to roll the technology out to other stores in New Zealand in 2019.
Foodstuffs and IMAGR demonstrate a take and go commerce experience well suited to large stores and retrofitting existing locations. This is in contrast to Amazon Go, which depends on a large number of cameras and sensors that are costly to introduce into a larger, existing format.
It is worth noting that Walmart previously offered scan and go in its U.S. stores via smartphones, before abandoning the initiative (though scan and go remains active in Walmart’s Sam’s Club stores). Scanning via a cart may prove more natural for shoppers for large orders consisting of small items than scanning via a smartphone.
Lojas Americanas: a large-scale introduction of unattended commerce in Latin America
Lojas Americanas is one of Brazil’s largest retailers. In 2019, the company announced a partnership with San Francisco-based unattended commerce technology provider, Zippin. Through this partnership, Lojas Americanas will launch a series of cashierless convenience stores under the store banner Ame, powered by Zippin technology.
One store is already open to consumers, and future stores will be a mix of new locations and retrofitted stores, located throughout Brazil. Shoppers will scan the Ame app at the entrance of the store and can then take any desired items and walk out. Consumers are billed based on the method of payment saved in the Ame app.
Zippin expects companies who introduce unattended commerce options to see profitability improve due to several factors, including the ability to recapture traffic lost due to long lines, better analytics, and better ability to handle surges in demand (such as at lunchtime in a busy downtown area). Because there is no need for a cashier terminal, a store can stock more SKUs or operate in a smaller space.
Iris Nova: take and text demonstrates conversational commerce
Dirty Lemon, owned by Iris Nova, is a premium beverage direct-to-consumer brand that launched in 2015. To purchase Dirty Lemon beverages, a consumer must establish an account via the Dirty Lemon website. Then, the consumer places orders by texting Dirty Lemon, and the order is delivered to the consumer.
In late 2018 Iris Nova opened its first store format, The Drug Store, in New York City without any employees. The Drug Store locations are small, attractively-decorated spaces with a refrigerator full of Dirty Lemon beverages. Consumers take the bottles they want from the refrigerator and text Iris Nova as usual.
The Drug Store shows how digitally native brands can use unattended commerce formats to market and sell offline. It also provides an example of leveraging existing e-commerce competencies to deliver an effective in-person experience. This example is more dependent on trust that some others, and perhaps only well suited to premium brands whose margins can absorb some losses.
Risks and opportunities for unattended commerce
Unattended commerce carries some risks for retailers: such as the financial costs of implementing unattended commerce technology, the social and civic risks of cutting jobs particularly in high unemployment markets and the fact that shoppers have varied opinions about unattended commerce.
What appeals to one subset of consumers may be off-putting to another. Companies can mitigate these risks by choosing a technology carefully, moving employees to other tasks rather than eliminating them, and offering shoppers a range of options so they can choose.
Thanks to the cost reductions and improvements to the customer experience, interest in unattended commerce is only likely to increase in the next five years. Companies should consider carefully the ways that businesses in different regions, industries and categories can introduce unattended commerce elements in ways that benefit their consumers and empower staff.