Frictionless Checkout: The Rise of Cashierless Stores and New Self-Service Technologies

Written in partnership with Chainlane

Today, brick-and-mortar retail faces more competition than ever before. While we previously relied on the physical retail options available around us, customers can now go further, explore a world of alternatives, and order from anywhere at any time.

This shift in consumer behavior has elevated customers to a new level of expertise, placing greater demands on retail stores to meet their expectations. Failing to keep up with these demands means losing clients who can simply move on to other alternatives.

Looking around the world provides plenty of inspiration for retailers in New Zealand. With many global retail giants investing heavily in preparing their stores for a future without cashiers and traditional till-points, their experiences can provide guidance to help us make the right technology choices for businesses here in Aotearoa.

Throughout this blog, we will analyze how self-service technologies such as autonomous checkouts, frictionless technology and RFID are benefiting brick-and-mortar stores. We’ll also consider their potential impact for smaller retailers too – as these technologies develop and become more accessible for businesses of all shapes and sizes.

What self-service technologies are available in stores today?

Smart fitting rooms and digital signage

Digitising the customer’s experience creates opportunities to truly surprise and delight shoppers. Key technologies which are rapidly maturing and gaining in popularity around the world include using smart fitting rooms, digital signage driven by blue tooth or RFID, and endless aisle kiosks, all significantly enhancing retail experiences for shoppers. All of these improve the customer journey with a unique shopping experience.  They provide access to better product and promotion information, and more independence for customers, who can check stock on their own using the available screens.

Endless aisle in particular is an extremely accessible and useful technology for smaller retailers. It’s also perfectly suited to businesses with multiple store formats that may not be able to fit their full product range into stores with smaller footprints. By combining mobile POS stations with ecommerce applications and RFID inventory management, creating an endless aisle system is achievable for retailers of all sizes.

Self-checkout Kiosks

Although we’re becoming accustomed to self-checkout lanes in grocery stores and convenience stores, they’re still less common in other retail formats in New Zealand.

Cashier-less stores and self-checkout systems have advanced significantly past simply scanning each individual item via a barcode. Today they refer to digital self-checkout stations where customers can go through the entire registration process on their own, or using RFID, scan entire baskets and deactivate security tags instantly.

More than half of customers (52%) say enabling payments at kiosks will improve their experience. As nobody likes to stand in line waiting to pay, cashierless checkout technologies help to speed up the checkout process, and are a very convenient and practical solution for most product categories.

Frictionless checkout – Grab & Go

Global stores have taken frictionless checkout to the next level by offering a complete Grab & Go experience such as Amazon’s new ‘Amazon Go’ physical retail outlets, specializing in grocery. Using machine learning, Amazon Go grocery stores trade without checkouts, lines, or cashiers.

Here’s how it works: when a customer enters the store with a dedicated system/app, the store utilises smart tags, shelf-based weight sensors, and cameras (or vision technology) to monitor the items the customer selects. Once the customer is finished shopping, they can conveniently use a dedicated hardware device on their mobile phone to make the payment, and exit the store without the need to stop at a cashier.

Not only do these stores create an extremely seamless shopping experience, but they are also powered by deep learning technologies. These systems work together to revolutionize the level of customer behaviour data a retailer can produce, helping to further refine their knowledge of how their customers shop.

Although for now, frictionless shopping experiences such as Amazon Go remain expensive to implement, this is a space to watch as software technologies and hardware develop and become more accessible.

What are the benefits of having self-service and frictionless checkout solutions implemented in stores?

Time-saving

We all can relate to the frustration of standing in a checkout line to pay, and even abandoning the cart due to extreme lines, especially if you just entered for a few items. Having self-checkout or frictionless checkout saves time for customers, and for employees, who can instead focus on other tasks or acting as true product experts – enhancing customer service around the store. Employees no longer have to be present for every payment but can provide support for customers when and where they’re needed.

Improved customer satisfaction & basket size

Giving the customer control over their shopping experience is both empowering and satisfying. They can pay as they prefer, pack items at their own pace, and overall feel free to shop however they wish. This directly improves their experience of the store and increases the possibility of increasing their purchase frequency and repeat business.

Redeploying store staff from the checkout to the shop floor also helps to improve the customer journey. Extra assistants around the store results in customers receiving more support, advice, and additional product recommendations. Frequently this can lead to the customer purchasing additional items to complement their existing basket, increasing average units sold and average transaction value for the store.

Reduced overhead costs

Implementing frictionless checkout solutions helps retailers reduce costs associated with traditional checkout processes. With self-checkout systems for example, fewer cashiers are required, resulting in potential labour cost savings. Additionally, automated systems can help reduce instances of human error and fraud or shrink issues, particularly when paired with RFID inventory management. Together these technologies impact positively on the retailer’s bottom line.

Integration with loyalty programs

Self-checkout kiosks and frictionless checkout systems can seamlessly integrate with retailer loyalty programs or customer accounts.

This integration allows customers to automatically apply discounts, rewards, or personalised offers when checking out, without having to carry a dedicated card.

We all love coupons but sometimes feel embarrassed to use them in front of others, so by making it easier for customers to redeem rewards and access exclusive benefits privately, retailers can encourage repeat purchases and strengthen customer loyalty.

Data collection and insights

Since smart checkout solutions are associated with the individual customer, retailers are more easily able to generate a single customer view, merging online and physical retail data.

This helps the business collect more customer level data, gain insights about the specific buyer and his or her shopping behavior, and create more accurate segmentation of the total customer base. In turn this enables the business to refine its operations and marketing efforts based on actual patterns in demand, instead of making assumptions.

Our team are constantly scanning the market and working with our suppliers such as Chainlane to keep abreast of the latest retail technologies and bring them to New Zealand businesses. We’re constantly unlocking a world of opportunities, with the end-goal of creating business efficiencies and improved experiences, both to our clients and their customers alike.

To revolutionise your own store experience with digital self-services, contact VITAG today and discover how our innovative solutions can transform your store into a seamless and efficient shopping destination.

References:

1. 1. 1. https://www.chainlane.io/blog/endless-aisle-retailers
      2. https://www.businesswire.com/news/home/20190808005419/en/Omnico-92-U.S.-Consumers-Frustrated-Shopping-Store
      3. https://www.chainlane.io/blog/building-customer-loyalty
      4. https://vitag.nz/contact/
      5. https://d3.harvard.edu/platform-rctom/submission/amazon-go-the-future-of-retail/