With the increasing pace of life, consumers’ needs for speed and convenience are becoming more and more apparent. That is why the cashier-less stores and touch commerce have emerged.
A cashier-free store is a brick-and-mortar store where consumers simply walk in, take anything they want from the shelf, and walk out without the pain of checking out. In turn, touch commerce is a technology that allows customers to make secure payments, both first-time and subsequent, without having to register or log in. In 2016, Amazon was the first company to open a cashier-free store in the US. Microsoft is also reportedly testing the cashier-free technology to implement in its brick-and-mortar stores. Although touch commerce and cashier-free stores help customers make purchases faster and in a more convenient way, the future of these technologies is not set. In this article, we have summarised why cashier-free stores could become mainstream and what obstacles can prevent them from gaining popularity with both companies and consumers.
- A World Trend
Although Amazon and Microsoft are the pioneers in opening cashier-free stores in the US, the grab-and-go format of purchases is not new. Cashier-less stores already operate in many countries, including the Netherlands (e.g. Albert Heijn To Go), China (e.g. Tao Café), and Japan. Nevertheless, inspired by Amazon, an increasing number of companies are now trying to implement this technology into their value chains. Amazon is planning to open as many as 3,000 cashier-free stores by 2021 across the US alone, which demonstrates that the technology is viable and effective when it comes to profit generation.
- Benefits to the Company
So why can the cashier-free store format become mainstream? The most obvious answer is because it brings companies’ costs and expenditures down while allowing them to serve more customers for the same period of time. Almost every industry is a crowded space with a high level of competition, where players cannot keep lowering their prices to remain competitive. They need to find other ways to stay attractive to consumers and survive in the marketplace. And going cashier-free is one option available to business entities. By going this way, companies are able to significantly reduce the operational costs they would have to spend on wages and streamlining customer experience. By contrast, the most recent technological advancements, including radio-frequency identification (RFID), mobile payments, and so-called invisible payments (i.e. those payments that trigger automatically without the consumer’s involvement) can help brick-and-mortar stores keep track of inventory, items sold, consumer preferences, prevent shrinkage, and increase traffic to mention just a few.
- Benefits to the Customer
From the customer’s perspective, touch commerce and cashier-free stores are beneficial since they allow for making purchases in a much more convenient and easier manner as compared to traditional stores. This new retail format also provides time-saving solutions, making consumers able to buy goods quicker without the need to go through the check-out process. The ease with which consumers make purchases in cashier-free stores is on par with the online shopping experience. However, the key difference here is that in a cashier-free store, consumers can actually try out the product they want to purchase, an option that is unavailable in any online store.
- Job Cuts
Perhaps, one of the main concerns associated with the implementation of the touch commerce and cashier-free technologies is potential job losses. If companies keep implementing artificial intelligence (AI) in their business operations, it will eventually replace cashiers and store personnel. This issue raises certain employment concerns. According to a recent analysis conducted by Cornerstone Capital Group, more than 7 million retail jobs in the US are at the risk of computerisation and automation. In addition, the growing number of fully automated stores where customers don’t have to go through the check-out process, and where robots are used for stocking and inventory purposes, is expected to significantly reduce the number of labour hours by almost two-thirds in the nearest future. This trend would eventually translate into millions of jobs under threat across industries not only in the US but all around the globe.
Cashier-free stores have also been criticised for discriminating against consumers who have no bank accounts or credit cards. This statement refers to both low-income consumers and those who stand apart by choice. Of course, a consumer who wants to pay in cash could get help from an employee of a cashier-free store. However, in this case, the whole point of the high-tech store would be lost. If a personnel member performs the duties of a cashier, it becomes an ordinary convenience store. Furthermore, some countries impose new regulations and laws, which ban brick-and-mortar stores that do not accept cash. This fact can also pose a serious threat to the bright future of cashier-free stores, which are focused on electronic transactions.
- Technology Is Expensive
Although some consider the expansion of cashier-free stores in the future of many industries, one thing remains certain, at least for now – the technology is way too expensive to implement. Of course, large multinational corporations such as Amazon have funds to invest in touch commerce and cashier-free stores, while smaller organisations have limited access to financial resources. For example, the original Go location in Seattle cost Amazon around $1 million in hardware alone.
The future of retail is moving fast towards cashier-free stores and automation. In addition to Amazon and Microsoft, McDonald’s announced its plans to equip its restaurants with around 2,500 digital ordering kiosks so its customers could pay without needing a cashier. Such an expansion is expected to have wide-reaching implications across industries. It is most likely to change consumer behaviours and preferences, while reducing companies’ operating expenditures, allowing for making their business operations more cost-effective. However, the future of the touch commerce and cashier-free technologies may not be so bright. Store automation is expected to fully eliminate one of the key points of contact between the store and the customer. It will also pose a threat to many professions and millions of individuals are most likely to lose their jobs because of the high-tech store of the future.
Ellie Richards is an online Marketing Manager for Outreach Lab, specialising in SEO Outreach and Link Building. She enjoys research, content and article writing on various topics, including Education, Marketing, and Technology.