Smart stores are changing how we pay
What makes a smart store – smart? How does a cashierless store work? And why would I want to shop in one? A smart store leverages technology to improve retail operations and enhance the customer experience through personalization and convenience. Smart retail is here and changing how we shop and how we pay. You can find these high tech establishments in urban areas, to small towns and even rural produce stands.
Some of the earliest adoptions of smart retail technology are to simply make checkout faster and easier. For example, self checkout kiosks are popping up in grocery stores nearly everywhere and high tech vending machines are selling everything from fresh produce to phone chargers. There is even a car vending machine!
What about a step beyond a payment kiosk and eliminating the entire check out process all together? Enter the completely cashierless store that leverages what is called “just walk out technology”. This technology includes artificial intelligence (AI), deep learning, computer vision and powerful computing to process the data.
Read more to learn how technology is addressing the pain points of paying in a retail establishment and making the check out experience as convenient as possible.
What is a cashierless store?
A cashierless store enables customers to shop and leave the store without stopping to pay at a checkout. There are a variety of terms for this type of unstaffed store – sometimes they are called “Grab & Go” or “Just-walk-out”.
A well-known example and pioneer is Amazon Go with just walk out technology. The first Amazon Go store opened in Seattle in 2016. In Europe, they launched their first store in London in 2021 branded as Amazon Fresh.
Amazon has not made their plans for Amazon Go in Germany or other EU locations publicly known. The approach is not yet compatible with the EU General Data Protection Regulation (EU GDPR) since there are some privacy concerns regarding facial and movement recognition.
Cashierless or 24/7 smart stores generally include the following features:
- Staffless: no or minimal store personnel present
- Cashierless payment options: mobile or card-based
- Smaller than your average retail store
- Registration: customers must identify themselves before shopping
The challenges of traditional retail solutions
The fact that online purchasing of consumer goods is steadily increasing and that this is presenting many retailers with major challenges is no longer news. The COVID-19 pandemic has only exacerbated the trend away from brick-and-mortar stores to e-commerce platforms.
In addition to rising store rents and energy costs, many retailers are struggling with a shortage of workers. Furthermore, long opening hours are increasingly in demand in order to survive against the competition of always-available online offers.
The evolution of cashierless smart stores
The concept of a cashierless store evolved from the digital point of sale (POS) approaches that are currently in widespread use:
- Self-checkout with a payment kiosk: Customers scan their products themselves and pay for their goods at the end of the shopping process.
- Self-scanning: Customers receive a reader such as a handheld device at the entrance or scan the products using a smartphone while shopping. Customers then pay for their purchase at a vending machine or a separate checkout
A cashierless smart store has evolved from these self check out models and makes the shopping experience seamless. By using artificial intelligence (AI), computer vision, cameras, and sensors, the store eliminates the entire check out process.
- Just walk out: Customers enter the store with a credit card, or scan a QR code using a mobile app. They take the items they want, skip the checkout line and leave. Computer vision, sensors and deep learning recognize the customer and the purchases and charge the customer’s account.
- Hybrid: a conventional store is operated as a cashierless store outside operating hours and is thus open around the clock.
The benefits of cashierless stores for retailers
According to the National Retail Federation (NRF), employers are struggling to find and retain workers. In that light, retailers can benefit from cashierless technology where zero to a few sales staff are needed to operate a store. Instead of staffing a cash register, employees can focus on the customer experience, assisting customers where needed. In addition, since a generally smaller retail space is needed for the range of goods, retailers can save money on rent and overhead costs.
One of the biggest benefits for retailers is the ability to understand their customer better. When the customer checks into the store, the retailer can start collecting a wealth of data with every transaction. This opens the door for many opportunities from maximizing supply chain efficiencies to offering personalized experiences.
The benefits of cashierless stores for consumers
The obvious benefits of cashierless smart stores are convenience and speed – time-consuming queues at the checkout are eliminated. In addition, many cashierless stores offer extended hours. Some are even open 24/7 which offers availability of products around the clock. This is very convenient to expand a store’s shopping hours. For example, most staffed, conventional stores in German-speaking countries are closed on Sundays. If a cooking ingredient is missing, it can still be picked up at the 24/7 store on a Sunday.
How does a cashierless store work?
There is a lot of technology that goes into a “just walk-out” solution. But how does it all work together? Let’s walk through a simple scenario of a customer shopping at a cashierless store.
Nearing the store
- As the customer nears the store, they receive a text promoting what’s fresh and what’s on special.
- The store’s application on the customer’s phone uses geofencing via location services to establish if a customer is near a location.
- The app can deliver a text notification with a relevant advertisement. Relevancy is based on customer data – for example searches with that company, past purchases, and a variety of other factors.
Entering the store
- The customer enters via an access control – similar to one that is profiled in our Magnetic Autocontrol customer story. Typically this is a gate like at a subway.
- The customer will be prompted to scan a QR code, account information, or a method of payment. This can either be a customer’s account with that merchant or via simply swiping a credit card.
- Once the customer enters, the store’s network of cameras and sensors track the customers’ activity in the store.
Browsing and selecting products
- Customer wanders the store and picks something up and puts it back, not what they wanted
- In order to track who is who, a smart store will use a variety of cameras that can keep track of different shoppers at the same time. This requires not only the sensor array but a large amount of computer processing power to run the complex machine vision algorithms. Typically on-site PCs/Servers are providing control to the sensors and monitoring, clean-up of video data, and communication with cloud services where the video analysis with AI tools is occuring.
- Cloud computing offers the ability to analyze large, complex data sets quickly. Without both Edge Computing and Cloud Computing this type of solution wouldn’t be possible.
- This allows not only the simple cases when there are only a few people in the store, but also complex situations like people standing close together.
- Using both cameras tracking what the customer is doing and weight sensors in the shelf tracking how many of a certain product remain, the system can tell which customer picked up which item and if they put it back.
- Customer picks something up and drops it into their shopping cart or bag.
- The system matches a shopper session with an item being removed from the shelf and charges the customer correctly.
Leaving the store
- When a customer passes through access control at the exit, their shopper session is finished and the system moves to execute payment processing.
Computers – the power plants in self-service stores
The entire technological implementation of smart store features would not be possible without powerful computers. They represent the heart of smart retail solutions and need to run reliably and maintenance-free around the clock in 24/7 applications.
Reliability and durability are the features that distinguish OnLogic’s computers. They run digital billboards in public digital signage applications, kiosk solutions and various smart retail applications. Planning a cashierless store or self-checkout station? Our team will help you find the right computer for you.