Looking Into the Future of Cashierless Retail

Four years have passed since Amazon launched its first cashierless retail experience. Despite a few major chains like Walmart launching cashierless concept stores in that time, the overall number of storefronts with smart checkout offerings in 2022 is still relatively small.

Are the perceived privacy issues that go along with shopping in a cashierless environment causing retailers to hold back on adopting smart checkout technology?

Amazon’s system of cameras and sensors to track and update customers’ virtual carts was polarizing back in 2018, and even today there is concern among consumers over how their information will be tracked. 

Privacy advocates have long criticized the technology, citing the potential for data breaches, a lack of legal accountability for protecting shoppers’ data, and even a potentially negative impact on low-income people and people of color as reasons why retailers should think twice before attempting to replicate Amazon’s model.

A niche market has developed around protecting this kind of data, with companies like Sensei, Standard Cognition, Grabango, Skip, and Trigo Vision all stepping in with their own solutions for frictionless shopping. Some use ceiling-mounted cameras, while others lean on artificial intelligence in their customer interactions. Unfortunately, GK Americas CEO Michael Jaszczyk doesn’t believe those solutions do enough to quell the concerns coming from both consumers and privacy advocates. 

In order for cashierless stores to truly go mainstream, Jaszczyk says retailers will need to find ways to process checkout seamlessly without relying on cameras and video footage.

“Most consumers know cashierless tech as camera-filled stores that watch every move they make. That’s because the concepts offered in the marketplace use cameras that track the movements of shoppers and products,” Jaszczyk says. “As a result, it gives consumers the feeling of being observed constantly, even if their faces are not actually being filmed.”

Jaszczyk’s company made headlines in 2021 when it opened a scanless store with a contactless shopping experience for employees at its headquarters in Germany. At the GK Go store, consumers check in, take items, and walk out using an app that relies on the company’s Cloud4Retail service. The technology includes Shekel Product Aware shelves and Hitachi’s 3D LiDARS technology.

Giving shoppers the option to opt-in on whether or not they share their data is a game changer in Jaszczyk’s eyes, and it could be what finally allows cashierless storefronts to take off in the U.S. 

At the GK Go store, customers can opt-in to receive hyper-personalized relevant offers and recommendations in real-time, or if they’re not comfortable, they can shop as guests and pay at a kiosk without being pre-authorized.

“Both options maintain privacy and protect customers from potential data misuse,” Jaszczyk says.

Amazon’s Next Steps

Amazon appears to be following a similar playbook with its latest step into smart checkouts. The company recently announced plans to expand Amazon One, its proprietary palm-recognition payment system, to dozens of Whole Foods stores in California. The technology allows customers to opt-in to paying for groceries by hovering their palms over a scanner. 

However, there are still skeptics of Amazon’s latest plan. For starters, Amazon One sends scanned images to the cloud, which means Amazon retains shoppers’ personal information in its own cloud storage, and it keeps fully intact scans of each shopper’s palms.

Jaszczyk says it’s a reminder that because a retailer can implement a popular technology doesn’t mean they should. Moving too quickly and deploying a solution that consumers don’t fully understand can lead to mistrust of the technology or the retail brand. It can give consumers the feeling of being observed constantly, even if their faces are not actually being filmed — and that may move the industry backward in a way that will ultimately hurt retail chains and the customers they serve.

“Scanless technology is certainly taking off, but for traditional grocers, cashierless concepts may not always be the answer,” Jaszczyk says. “The reality is, implementing the hottest, trendiest tech is costly — and doesn’t always lead to success.” 

A Hybrid Approach

Jaszczyk believes hybrid stores are the future of retail. Hybrid stores fill in the gaps and give customers flexibility in how they pay, allowing customers to choose to become pre-authorized and walk out via a cashierless approach or pay with credit card and cash through self-checkout kiosks and mobile self-scanning options. 

“Blending different checkout formats enables retailers to deliver the frictionless experiences that consumers expect,” Jaszczyk says. “As well, innovations such as intelligent tap and go, smart shelf labels or mobile scanners are more technically and financially stable. They also still provide the needed innovation customers are looking for today.”