As soon as I start talking about the future of checkout in stores, everyone starts talking about Amazon Go. The Amazon Go store allows customers to go into the store, grab the items they want and “just walk out.” The Amazon Go store is like an expensive 7-Eleven. The Profit & Loss (P&L) will probably never be positive, but when you’re Jeff Bezos, you don’t care. It’s also a great place to put profit from other areas of your business to pay less on your taxes.
Here’s why the Amazon Go store is just a fairy tale for retailers that actually want to make money:
Amazon Go is a purpose-built store with around 1,000 types of items or “SKUs” in the retail world. The items were chosen to intentionally look different so the computer vision system in the ceiling can tell the difference between the items.
Here’s the first problem big retailers have with this type of technology: grocery stores have 80,000+ SKUs and big box stores have 300,000+ SKUs with many items that look exactly the same. Example: 12 oz box of Cheerios and a 20 oz box of Cheerios. Or how about 2 shades of red lipstick that look almost identical? Identical items are a problem for the computer vision system that we will go into later.
Next problem: cost for thousands of cameras in every store plus the maintenance costs for all those cameras. Amazon Go is a very small store around the size of a 7-Eleven, so normal retail stores will require thousands of cameras to cover their large store footprint when compared to Amazon Go.
Next problem: the structural integrity of the ceiling. Will the ceiling in retail stores today support the weight of thousands of cameras? Probably not.
Next problem: Heat. Thousands of cameras put off a lot of heat. Will the AC systems in today’s stores support all of that heat being generated? Probably not.
Next problem: Labor costs. Yea, you thought Amazon Go stores were “cashierless,” but in reality, there are people sitting behind computers in a back room reviewing all of the video footage where the computer vision system can’t fully determine what your item is. And the larger the store, the more people you need to review video footage, which means higher labor costs. Computer vision works on probability, so if the system is 92% sure of something, then it says, “Yep, it’s this item.” …But it’s still wrong 8% of the time on what item you have in your basket for this example. Try asking a retailer with billions in annual revenue if they are ok with their revenue being 8% less this year. Computer vision looks for features of items like text or logos, so the Cheerio boxes we talked about earlier pose a significant problem since the text and logos are the exact same on the 12 oz box compared with the 20 oz box.
Am I starting to make sense on why this type of store will never be profitable? It’s truly an incredible store and I’m a huge fan, but it’s more like Disney World than a practical solution for retailers today that need to keep in-store costs down to compete with online retailers that have very little overhead.
So what is the future of checkout? Every shopper hates lines when they are checking out. Long lines at checkout means a bad customer experience. And a bad customer experience in today’s cut-throat retail industry means bankruptcy for retailers.
There is a clear win strategy to getting rid of checkout lines: Mobile Checkout. `
Imagine a store where every employee can check you out on the spot with a handheld device. Even the one stocking the shelves…literally anywhere in the store. This transforms the customer experience and truly gives the customers what they expect in today’s retail world, which is no lines.
There is a reason why Apple has mobile checkout.
There is a reason why Walmart has mobile checkout (Powered by Innowi devices)
There is a reason why Target has mobile checkout.
To get rid of checkout lines!
To take pressure off the lines in the front of the store, retailers will start to invest in “In-Aisle” mobile checkout devices like Innowi, which is a realistic option for retailers that can scale quickly. Retail associates are becoming more and more tech savvy and the NexGen Store Associate wants to be enabled with tech, which makes mobile checkout the perfect option for retailers.
Innowi Mobile Checkout Device
Innowi is a leading tech company out of San Francisco that focuses on the customer experience through mobile checkout. Mobile devices like Innowi will soon replace the old cash registers and self checkouts because they are a fraction of the cost and allow for both a fixed cash register and mobility. Innowi provides the only all-in-one payment solution on the market with a device, pin pad, fingerprint reader, barcode scanner, camera, all NFC options (like Apple Pay), chip reader and card swipe all in one device.
Right now, there is no true competition to Innowi on the market, which is why you will start to see these devices in all major retailers, airlines, hotels and restaurants in the next few months. Innowi also has confidential machine learning and artificial intelligence built into its software for indoor mapping, tracking and guidance.
As the former lead for all checkout innovation at Walmart, I have tested every method of getting rid of checkout lines and the only method that actually works is what Apple has been doing for the past 10 years: Mobile Checkout. Mobile checkout devices are truly the future of retail tech and the reason why I joined Innowi.
Source: Joel Larson