Vending machines, perfected by Horn & Hardart during 1940's has been the first to automate the payment system where a customer selected the food by putting coins into the machine. Following it, Price chopper Supermarkets, New York has installed world’s first supermarket self-checkout system.The global market of self-checkout kiosks is estimated to be at 16% from 2016 to 2023 and is valued over USD 18 billion by 2023. In next seven years, there will be a rapid growth in the self-checkout market of growing economies such as India and China as reported by CAGR.
Is retail affected by the culture? Yes. We are living in the generation of millennials where they expect everything available at one-click.
Mcdonald’s as an experiment found out that the customers using self-service kiosks were more likely to supersize their orders, resulting in an average increase of $0.30 per order. It happened because the employees at the checkout counter made the customers self-conscious. Hence, 500 Mcdonald’s restaurants in the US have been updated with self-order kiosks, mobile pay options, updated interior design and table service. The customer will be able to order from an automated kiosk on a touch screen and the payment is made at the same time. The customer will take a seat and the order will be brought to the table. The option of mobile ordering is also on the way.
The retail reality has always been ‘innovate or die’. It’s about providing seamless shopping experience, synchronising physical and digital shopping experience, breaking down silos between mobile, online, in-store experiences so that every channel operates as a unified system in front of the customer.
“Amazon Go is a really interesting retail concept which fits a busy consumer lifestyle, particularly in the convenience store space. In this space, people use words like “frictionless” and “painless” shopping.”, David Walmsley, Chief Customer Officer at House of Fraser
AmazonGo has moved beyond self-checkout kiosks or point of sales. All one has to do is download Amazon Go app. The barcode sensor lets you enter the store and identifies the items you pick. The image recognition and sensor fusion of technologies have already confirmed your order and billed on your Amazon bank card. To complete your shopping journey, just walk out of the door.
It is the hybrid of technologies such as 1 click web-shopping in retail, powerful app location-based services, QR code ids, integrated payment, image recognition, multiple sensor technology, artificial intelligence and machine learning.
Amazon has already patented two of their advance technologies seen inside the store. One is the detection of item and interaction i.e system of tracking removal or replacement of items on the inventory. Other is covering the payment of items when you leave the designated area.
Just like Amazon Web Services is hosting tonnes of other services like Netflix, Amazon may in the future start licensing Amazon Go technologies seen in the store. Amazon’s grocery store at Seattle is still at it’s beta phase, only open for Amazon employees.
Many international retail chains such as Waitrose are also on their way of providing self-checkout services via app platform.Waitrose, one of the British largest supermarket chains has come out with ‘scan as you shop’ app that lets customers scan the barcodes of the products at the self-checkout tills and pay. The app looks like it will eventually provide a full shopping experience in the future.
“The mobile payments space is really interesting. In the early days of self-checkout we used to have a debate questioning if self-checkout should be part of a high-quality service business. But increasingly some customers think if we don’t have self-checkout it’s a weakness.”, Rob Collins, retail director, Waitrose.
In India, Croma retail is also preparing to move in the space of mobile payments with an omnichannel approach.
Ranjit Sathyath, Head of Infiniti Retail, (umbrella of Croma retail) talks about most disruptive trends in retail, “In 2017, mobile payments will become a reality, big data will get bigger, and IoT will drive a lot of customer experience and supply chain optimisation stories. Additionally, cognitive computing will make its debut in many retailers’ technology landscape.”
When it comes to leveraging new technologies, he adds “At Croma Retail, we are in the process of early pilots in AI and Cognitive.”
“I always say ‘fashion isn’t downloadable’. You need the human element – a program or piece of technology won’t provide the full level of care, attention and assistance that a shop assistant or customer service team will give. This interaction and engagement is an essential component of providing a luxury experience. On the other hand, you can’t ignore technology. To succeed we need to strike a balance between the online and offline experience.”, says José Neves, founder and chief executive of luxury fashion website Farfetch.
Stores will take the centre stage in fashion. However, what will change is the operation of these stores with the way services given to the customers. House of Fraser walking in the line of Amazon Go is preparing itself to transform itself in 'mass of personalisation'.
Zara, a Spanish fast-fashion brand has acknowledged the in-store problems of long queues that make customers abandon the stores. Last year, Zara became one of the firsts in fast fashion besides luxury brands like Burberry and Rebecca Minkoff to bring technology in store. Some of the stores in Spain has been updated with the touchscreen tablets in the changing rooms. Customers can ask for a different size while changing. Self-checkout machines/kiosks are also seen inside the store to reduce the long check-out queues.Their finest feature is Zara app that woos customers by providing a great user experience.
The app is available for android and apple phones, tablets and even smart watches. You can discover new items on the app. When you find what you like, you can check the nearby stores availability, the size info, shipping and buying information. Once you are in the store you can collect items from the store and even scan the products on the go and pay.
“Both our online and offline brick and mortar stores are seamlessly connected, driven by platforms such as mobile payment, and other technology initiatives that we will continue to develop.”, Pablo Isla, CEO, Zara.
Does luxury include self-checkout? To this Uri Minkoff, CEO of Rebecca Minkoff replied, “No lines? The comfort of being and dressing as who you are? Being able to be anonymous—and not being judged?" And suddenly, I’m curious—is the option to check yourself out at CVS a bit, dare I say, luxurious?”
"The biggest problem with self-checkout is the loss prevention/theft concerns. Once that is resolved, it is a good thing and just gives shoppers more choice in completing a transaction.", Sucharita Mulpuru, ShopTalk chief retail strategist
The brand’s new system is developed by Y Combinator startup Queue Hop, that is a security RFID tag attached to each item in the store. Payment is allowed when the customer puts an item on the checkout table, where it appears on the screen. Once payment is done, the item is put on another table that removes the tag from it, allowing the customer to leave the store.
The idea behind introducing self-checkout technology is ‘allowing a customer to shop in a boutique-sized store without neck-breathing service.’ Uri calls it a Pretty Woman moment where ‘[Julia Roberts] walks into the boutique in Beverly Hills, and they’re kind of judging her.’
Another well-known fashion brand, Aldo is also connecting with the millennials by applying channel agnostic strategy, i.e providing seamless experience whenever and wherever to the customers, no matter what channel they desire. Their new app benefits the customer by letting them sense and feel the product with selfless tablets and ‘virtual endless shelf’. The app instantly links the customer to the connected stores and the store’s inventory to try on request and scan the product. What it lacks right now is the self-checkout feature. However, it can be expected that Aldo will soon bring that feature. However, the digital savvy features are only available to the Aldo’s New York stores
Infinia retail allows retail chains to manage sales digitally, providing integrated payment options, inventory management, centralised management of all the stores, and digital cashbooks for tax accounting.
“With GST and Demonetization, digital revolution and omnichannel have started making footprints in Indian retail. Retailers are looking to better their in-store experiences while merging physical and online shopping experiences. With our new self checkout app feature, customers take on a cashier role using their smartphones, getting rid of long checkout queues. ”, Gaurav Soni, CEO, Infinia retail.
The self-checkout app will be available on Google Play and Apple Store to the end customers. Once a customer downloads the app, he/she will be required to login. The app will open to a page that will provide all new offers and sales that are running at that time
The profile option will help customers go through their order history and account settings. Once customers start looking at the products in store and find something they like, they can go to the scan option and scan the barcode of the product.
The information of the product scanned will appear on their smartphone’s screen with the details of price and quantity. After adding products to cart, the app will ask customers to pay. They will be provided with multiple payment options like a credit card, debit card, internet banking etc. The app has an integrated loyalty program that will be visible under payment options.
Once the payment is done, a QR code will appear on their app’s screen to confirm the payment. An employee at the exit will scan the barcode displayed on the customer’s phone with the list of items paid for to check against the contents of the cart. This will complete a customer’s journey of self-checkout in store. A customer can choose to shop further or look at their order history.
Self-checkout is not just a futuristic term. The customers are already experiencing self-checkout technology through other brand’s shopping experiences. Retailers are joining hands with service providers like Infinia retail to make self-checkout live in the store.