What’s Driving Retailers to Implement Autonomous Checkout

2020 brought enormous changes to brick-and-mortar retail, as shoppers sought safer, touchless shopping and payment experiences. This drove very high interest in technologies such as autonomous checkout – systems that allow shoppers to walk into a store, grab what they need, and leave without waiting in line or stopping to pay. The autonomous checkout market is expected to achieve a CAGR of 37% from 2020 to 2027, according to The Insight Partners. 

Even with Covid now largely in the rearview mirror in most areas of the U.S., retailer interest in autonomous checkout is high for five main reasons:

  • Retailers want to provide better customer experiences to draw shoppers in and away from e-commerce options. This has been a goal of retailers for many years but is more important now than ever. A year in relative isolation has left many shoppers content to continue buying most everything online – retailers need to give them a reason to leave the house and come to a physical store. Novel experiences like autonomous checkout, which take so much of the friction out of shopping in a store, can help do that. 
  • Retailers want to reduce operating costs. It’s no secret that retailers’ bottom lines suffered greatly due to Covid. To get back on track, they are looking to keep costs low without impacting the customer experience. Moving to autonomous checkout frees up valuable real estate in stores (that can now be used for merchandise), helps eliminate expensive equipment, and lets them move staff out to the floor where they can assist and upsell customers. All of these things help reduce costs and boost revenue.
  • Retailers want to provide contactless experiences wherever possible. A survey Standard AI conducted in November 2020 found that 31% of shoppers would be more likely to shop in a physical store equipped with contactless checkout. This became a popular stance during Covid but does not appear to be going away — it comes up in every conversation we have with retailers today.
  • Low footprint systems are making implementation quicker and far less expensive than ever before. Early forays into autonomous checkout (think: Amazon Go) required extensive changes to store layouts, including sensored shelves. Retrofits were impossible – instead, stores had to be built from scratch around the technology. Store managers did not have the flexibility to move products on the fly, for instance to an endcap or into a bin for a special promotion, because everything was precisely coded into the system. Some systems even required each item to have a custom QR code – a nightmare for store staff who had to correctly apply each sticker.

    Newer systems rely only on highly accurate ceiling-mounted cameras that can detect which items a person picks up (or puts down). They use no facial recognition and let shoppers remain completely anonymous. They can be easily installed in existing stores without making any changes to layout, shelving, lighting, or inventory management processes – and stores can remain open during the implementation. The cost of this approach is roughly 1/10th that of first-generation systems, putting autonomous checkout within reach for a much broader swath of retailers.
  • Retailers are having a difficult time staffing stores. This is a more recent development, but it’s been harder than ever for retailers to staff their stores. Circle K for instance announced in May that the company was looking to recruit 20,000 new employees to staff up for the busy summer months. Autonomous checkout can help retailers alleviate that need.

Convenience stores have been the first frontier for autonomous checkout, with grocery to follow. While today, it’s still rare to find autonomous checkout in stores, I think that within two years, people will have at least one store in their neighborhood that offers the technology. And within five years, autonomous checkout will be common and preferred by the majority of shoppers. While Covid may have accelerated the shift, this technology is here to stay.

Jordan Fisher is co-founder and CEO of Standard AI.

Tags: