What’s new in smart checkout?

Richard Fouts
Jun 14, 2019 · 3 min read
Shoppers love the convenience but many state laws require retailers to sustain cash options.

Stores without cashiers (such as Amazon Go) signal more retail disruption, validating a Forrester research finding that 50% buyers won’t return to a store with checkout times exceeding five minutes.

What is the business value of smart checkout?

With smart checkout, buyers simply “walk out” of cashierless stores that use AI and computer vision techniques to recognize them (and their purchases), automatically charge them and send them on their way. Shoppers say Smart Checkout reduces their instore shopping time by half.

Smart Checkout recovers lost sales from customers that abandon purchases due to unacceptable wait times. And, cashiers reallocate newly freed time toward higher-margin, service-led offerings.

Retail managers leverage the technologies elsewhere. Smart Checkout data can be used to drive better POS merchandising decisions while informing store design, personalization, and targeted promotions. Smart Checkout technologies can also be deployed for real-time store monitoring, inventory management, loss prevention and personalized promotions.

How is smart checkout being deployed?

Most retailers offer the capability through a mobile app, while others provide a device for buyers that don’t have a smartphone.

In China, deployment is most common in grocery and convenience, where shoppers don’t need a bag or are used to bagging their own purchases. Bingo Box, Alibaba, JD and Tencent use Scan & Go mobile apps, RFID and AI-enabled check-out for cashierless experiences (which they deployed ahead of Amazon).

Some vendors offer white-label Scan & Go apps that can be integrated into the retailer’s app or deployed as a separate Scan & Go app.

What are the challenges and how can they be overcome?

The National Retail Federation estimates roughly $14 billion is lost annually in scan avoidance. Methods are not fully fraud-proof and computer vision can fail if line of sight to a customer holding a product is compromised. Retailers can use AI to solve the problem (See Learn More, below).

In the US, cashless stores are banned in Philadelphia, which requires a cash payment option. New Jersey just passed a similar ban; Washington DC and New York are considering similar legislation to make cashless stores illegal. Retailers should make cash an option (just as cash lines still exist on EZpay toll highways, bridges and tunnels).

In luxury segments, retailers should consider the entire customer journey (given these buyers expect high service levels). Retailers should test the idea in scenarios where Smart Checkout might create competitive disadvantage.

Learn more:

AiFI’s Plans to Scale Checkout Free Stores: How one startup helps grocers identify which days and hours to delight and upsell certain customer types — while reducing their checkout time.

China is both ahead and behind Amazon in cashierless stores. While its rapid pace of cashierless stores suggests China is deploying smart checkout smarter ways than the US, it lags on other areas.

AI Helps Retailers Bust Thieves at Self-Checkout. How AI can read and flag checkout behaviors, question suspicious transactions on the spot and correct mistakes before anyone is labeled a thief.

Laws Could Stand in the Way of Cashless Retailers. Current smart checkout techniques exclude people without checking accounts or credit cards causing legislative actions in several US cities.

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Richard Fouts

Written by

Richard Fouts is the founder of Comunicado, a marketing communications company that helps brands tell their story.

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Get smarter at building your thing. Follow to join The Startup’s +8 million monthly readers & +788K followers.

Richard Fouts

Written by

Richard Fouts is the founder of Comunicado, a marketing communications company that helps brands tell their story.

The Startup

Get smarter at building your thing. Follow to join The Startup’s +8 million monthly readers & +788K followers.

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