The checkout-free store–hype or reality? - NIQ

The checkout-free store–hype or reality?


The checkout-free store–hype or reality?

Checkout-free stores are often perceived as modern, futuristic and as a shopping experience of the art of the possible. But after the initial rush of media coverage faded, many now wonder where the industry is today and if checkout-free stores are something they should pay attention to.

Small and medium businesses to actively pursue and checkout-free stores?

In January 2018 Amazon opened its first Amazon Go store in Seattle, which led to excitement in the industry and long lines at the door. Since then, over 40 more stores followed. For many consumers, being able to enter, pick what they liked and leave felt fresh and innovative.

Accelerated checkout times have been around for some time, but seldom was checkout eliminated completely. Often, the work was simply transferred to the shoppers as we saw in special “self-checkout” zones.

But retailers across the globe also launched their versions of checkout-free stores, ranging from large retailers to discounters, apparently with mixed results, as the numbers are still small and some stores have even returned to traditional checkout lines.

So, is it a hype?

It seems checkout-free will be staying–eventually. While it comes with a futuristic technical appeal and high level of convenience we are not quite there yet. Technology of course is evolving and improving, which will make the concept more affordable and reliable for retailers. However, there are some market trends that the checkout-free concepts need to address and stay vigilant about e.g. data privacy. Particularly when using artificial intelligence to identify individual shoppers via facial recognition, body- or movement-patterns and similar.

Do small and medium businesses need to get on board?

At this time checkout-free operations cost will likely be on the higher end, which would indicate, that a high degree of product turnover is desired. However, beyond the novelty factor, a checkout-free store will also need to be attractive enough to pull in customers. This would indicate interesting products do have chance of being listed, however they do run the risk of being delisted from those store rather swiftly.

Furthermore, the relatively low number of checkout-free stores in comparison to “regular” supermarkets at this time would not make the channel a priority from a turnover perspective. However, if the futuristic concept fits with the image of a small and medium manufacturer, being listed can make sense. In these instances, proving in negotiations that a product is a great fit, both from product attractiveness as well as a high sales frequency will be key.

In conclusion, Checkout-free will grow eventually. SMBs that specifically want to be listed in a store now should have a convincing, data backed story to amplify their chances.
And for those who are not looking at being listed in a checkout-free store: The data-based analysis of your retail channels can help you find growth opportunities for your next strategic planning.

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