Beyond the Checkout: Using Data to Create Autonomous Retail Experiences
The rapidly changing state of martech and consumer data collection in 2021 is causing retail brands to consider solutions they may have overlooked previously. Nowhere is that more apparent than in the autonomous checkout space, where companies like Standard, AiFi, and Trigo are seeing explosive growth. With a future that extends beyond autonomous checkout to computer vision used in retail more broadly, these companies have the opportunity to reshape the face of shopping as we know it.
Growth in the autonomous checkout space comes in spite of the current debate over consumer privacy and data collection. Although vendors have come up with masking solutions and annonymizing measures to protect the privacy of consumers in their stores, there’s little doubt that shoppers will be giving up a certain amount of privacy in exchange for the benefits of autonomous retail.
Although there have been many different takes on autonomous retail, and how that’s defined, most of today’s systems follow the same basic playbook. Retail stores are retrofitted with cameras to create computer vision-based checkout systems that don’t require human cashiers. This allows customers to walk into a store, pick up what they want, and leave. Purchases are charged automatically to the credit card the customer has on file. In some cases, customers are prompted to scan a QR code when they enter or leave the store.
Retailers stand to make big gains as the field takes off. Standard CEO Jordan Fisher says the increased interest in autonomous checkout can be attributed to many things, not the least of which is the yearning for new customer experiences to battle Amazon, Walmart, and delivery services like DoorDash. The Covid-19 pandemic led to the need for low-touch options to bring customers back to stores and keep them safe. And then, of course, there are the labor shortages that so many businesses have faced in 2021.
Fisher is quick to point out that autonomous retail solutions, like the kind being developed by Standard, aren’t designed to replace store employees. Rather, they’re designed to help human employees do other valuable things inside stores, such as restocking shelves, taking inventory, interacting with customers, and helping customers find items.
“Retail technology is complementary to retail staff,” Fisher says. “Retail is a hard business to hire for and attract talent, requiring a sizable workforce with substantial turnover. As retailers across the world begin to reopen doors and look to hire workers, technology can help make retail jobs more attractive – instead of scanning and bagging items, workers can focus on more impactful and rewarding work.”
Coupling AI-powered cameras and software with computer vision has the potential to change the way consumers interact with the physical world. Despite explosive growth in e-commerce during the Covid-19 pandemic, brick-and-mortar stores remain an essential part of the shopping experience. Adding a layer of data on top of that experience will give brands a better way to see and understand what’s happening inside their stores. Fisher hopes that these changes will empower retailers to innovate beyond autonomous checkout so that real-world experiences can be even faster and more instantaneous than e-commerce.
“Ultimately, computer vision and AI will have an impact that goes far beyond retail, including autonomous driving, manufacturing, even offices, gyms, bars … It’s revolutionary anywhere eyes and brains are useful,” Fisher says.
Data’s New Role
Consumer surveys indicate that the demand is already there for autonomous retail experiences. More than three-quarters of consumers (76%) say they want personalized in-store experiences from their mobile devices, and self-checkout terminals are perceived to improve that shopping experience. However, that does come with a caveat — 32% of consumers say they are unwilling to sacrifice personal data security to improve their in-store experience.
The companies developing today’s autonomous checkout solutions say they are building systems that will ensure all customer data is anonymized. For example, Standard AI says it doesn’t collect any biometric data — including facial recognition — from shoppers. Other companies are making similar promises. But anytime a retailer is installing AI cameras inside stores, there will be a certain amount of skepticism and pushback from some customers.
As cashierless stores take off, and more personal information and payment data is transmitted through mobile devices, there could also be the opportunity for hackers to have more network access to sensitive data through vulnerable providers and merchants.
In an interview with Street Fight, payments industry veteran Ruston Miles recommended that merchants and providers look to extend beyond transmission-level encryption to data-level encryption, through technologies like certified P2PE, in order to protect against attacks.
“I think consumers generally feel more secure having their payment data only available on a non-network-connected card that they can use whenever they choose,” he said. “I have heard many people complain they don’t feel secure storing their card data on their mobile device. This will definitely be a barrier to entry for those consumers who have experienced directly or indirectly the effects of data breaches and identity theft.”
The Pandemic’s Influence
While consumers were open to utilizing new retail technology prior to the pandemic, the demand for safer shopping experiences exploded in 2020 and 2021.
Consumers feel safer when they make purchases using as little human contact as possible, and they’re expecting retailers to apply new safety measures, says Shash Anand, Vice President of Product Strategy at SOTI.
Anand’s recommendation that retailers prepare for these new demands by integrating in-store technologies like self-checkouts, digital displays, smart mirrors, beacons, and self-service kiosks is one that’s echoed by many throughout the industry. Anand also suggests that businesses extend their new technology across other channels, such as supply chain, to provide for a seamless flow of operations, both in-store and behind the scenes.
“One in three consumers are comfortable with emerging delivery methods, such as delivery drones, and more than one-quarter would accept autonomous vehicle deliveries,” Anand said. “This positive trajectory towards mobile adoption and consumer trust is a reassuring sign of retail’s digital transformation.”
With more Americans now heading back into the office, all signs point to the autonomous checkout space continuing to pick up steam. Just last month, the AI company Trigo entered into a partnership agreement with Google Cloud to collaborate on ways to help retailers employ AI to manage the checkout process in their stores. And AiFi, an information technology firm that offers AI-powered retail solutions, announced that its cashierless checkout technology is being added to two Loop Neighborhood store locations in California.
Standard’s Fisher sees autonomous checkout as one of the key pillars of the future of retail, giving businesses a way to transform the customer experience, lower operating costs, and manage labor shortages.
“As people spend more time out in the world, including heading back to work, technology like autonomous checkout can make shopping fast and enjoyable, offering some of the same benefits of e-commerce, like seamless checkout, with the added benefit of instant access to your goods,” Fisher says. “For retailers, if you can lower prices and increase convenience at the same time, which is what Standard helps our customers do, you can improve your margins and revitalize physical retail to bring more people in stores to enjoy shopping again.”
Stephanie Miles is a senior editor at Street Fight.