Technology that can eliminate the physical point of sale is gradually advancing to larger stores, and developers are using these systems' other benefits to appeal to retail chains, payment companies and card issuers.
"Eventually this technology can be a part of all shopping," said Andrew Radlow, chief revenue officer at checkout-free provider Granbago. "There will be oceans of analytics about how people shop, beyond just how they're paying."
Checkout-free/autonomous retail refers to the use of cameras or other sensors to identify items for purchase in stores in real time. Grabango, which is in the midst of adding its checkout-free technology to Circle K stores, is also integrating with the chain's loyalty and rewards program.
It's part of an effort within the checkout-free industry to make the technology workable at larger stores and to gather data for a broader purpose than payments. If these goals can be achieved, checkout-free retail could become a prominent payment and marketing option for card issuers and merchant-acquiring banks.
"If you can create a customer profile on what they are scanning and what they are looking for, you can create a more appealing shopping experience," said said Daniel Keyes, an analyst at Javelin Strategy & Research.
Grabango is also piloting a way to connect its technology to the existing loyalty programs for retailers on an opt-in basis. At Circle K, which calls its incentive marketing program "Sip & Save," the checkout-free system captures reward points as consumers shop.
The loyalty aspect could offset a major concern about checkout-free systems: Because they are essentially an in-app payment, they are categorized as more costly card-not-present sales.
Card-not-present transaction fees are usually higher because it's harder to mitigate card fraud outside of a physical store. While checkout-free retail happens inside a store, the actual payment is charged to an app. That's similar to an e-commerce payment, creating tricky negotiations among technology providers, stores and card networks.
"The technology is significant but some merchants may not want to go for it because of the potential for higher fees," Keyes said.
Going big
Amazon was a pioneer with its checkout-free
The trick is making checkout-free systems work without following Amazon's model of building entirely new stores. It's an elusive goal for technology that is still less than a decade old.
"If it were easy to scale there would be more stores with this technology. Bigger stores have not been a slam dunk," Keyes said.
Grabango uses computer vision, which relies on cameras that are above the shoppers and the aisles. This process avoids the need to place sensors on the store shelves; it also makes it easier to recognize items and avoid mistakes such as a shopper putting an item back on "wrong" shelf, Radlow said.
"The computer vision puts the hardware away from the humans in the store. There is no facial recognition or biometrics," Radlow said. "It senses when the item is put into the cart and charges the debit or credit card that's on the app for that customer."
Grabango hopes this technology will
"The difference between a new build and a retrofit is night and day," Radlow said.
Amazon has tried several different models since the
It has added
Amazon has also equipped more than a dozen U.S. and U.K. third party locations with checkout-free technology, generally at sports venues, street-front retail, live event venues and airports.
"The technology is highly flexible and scalable to suit the needs and preferences of the venue operators. We can retrofit existing stores, install our technology in new spaces, or deliver fully engineered and prefabricated stores to minimize on-site disruption," said Dilip Kumar, vice president and AWS Applications, in an email.
Amazon has added size and more diverse layouts, Kumar said. The initial Go store in Seattle was 1,800 square feet and Amazon has deployed the technology in Whole Foods and Amazon Fresh locations that are up to 40,000 square feet.
Doing more with data
Third-party retailers that deploy Amazon's checkout-free technology in their own stores can leverage data captured by the core technology, allowing the retailers to make strategic decisions across their stores to optimize their day-to-day operations. All data shared via this service is anonymized and aggregated, Kumar said.
Since Amazon Go's launch, several rivals have entered the market, including Granbango, Standard, Zippin and other firms. AiFi, which was founded by
Zippin recently added Nissan Stadium, the home field for the Nashville Titans, ahead of the 2022 NFL season. Zippin in June entered a partnership with
Checkout-free retail is still not ready to move out of tiny spaces, though Amazon’s trying to accelerate progress through a trio of initiatives that have come to light over the past few weeks.
"It tracks every aspect of what a shopper does," said Krishna Motukuri, CEO and founder of Zippin. Since checkout-free technology identifies products and consumers ahead of the purchase, and creates a video record of in-person shopping, there's a longer window to accumulate data. And the types of data are different, often closer to data produced by online shopping or social shopping.
The Mastercard/Zippin collaboration creates an opportunity to scale the technology widely, including an addressable market of Mastercard's merchants and issuers, which could offer checkout-free payments as part of their merchant banking services.
"You can measure things like how much time a shopper spends looking at an item, but also if that shopper was part of a group. You can't do that with a traditional point-of-sale system," Motukuri said.
One user, which Zippin would not identify, uses data to order more of a specific item for stores based on video shopping records. Empower Field at Mile High has integrated Zippin's checkout-free technology with Lava.ai, a loyalty marketing firm that focuses on sports facilities.
"Banks and payment companies have a huge role to play here," Motokuri said.
