True Revolution Brought Forward by Cashierless Stores, Improving Consumer Satisfaction
An increasing number of cashiers, who used to help customers check out, are disappearing and this trend is being fueled by the spread of the coronavirus and the "untact" trend that was born as a result. Despite its intended effect, some consumers feel that cashierless stores add inconvenience as they now have to do what the cashiers used to do on their behalf. In addition, since there are some consumers not used to the self-checkout process, others sometimes have to spend more time waiting in line than before. All of the above factors show why cashierless stores are often referred to as “inconvenient” or “cumbersome.”
However, nowadays we’re witnessing what is a genuine wave of cashierless store innovation. The key to innovation is the so-called “smart carts,” a service that allows consumers to complete payment by simply putting items in their carts when shopping at a supermarket or a convenience store. Consumers no longer have to wait in line with a shopping cart full of items, take them out of the cart and place them in front of the cashier, and then make the payment. The carts take care of everything.
In traditional shopping, checkout was something that was unavoidable, even though a bit of a hassle. Smart carts, however, are expected to break the mold and function as a catalyst that innovates customer experience.
Various Attempts to Drive Innovation in Offline Distribution
The market for smart carts is growing in the USA, with the entry of more and more startups manufacturing such carts. A case in point is Amazon’s Dash Cart. In 2016, Amazon introduced “Amazon Go,” the world’s first cashierless store in which consumers don’t have to wait in line to be checked out by a cashier. However, faced with criticism that it kills jobs in the United States, Amazon was unable to increase the number of such stores. Against this backdrop, Amazon dropped its initial plan to open more cashierless stores and instead decided to focus its attention on selling its cashierless store technology across the globe and leading the contactless or "untact" trend.
Once a consumer puts an item in the dash cart, computer vision algorithms and various sensors combined read the barcode automatically and the payment is also automatically made with the credit card linked to the consumer’s Amazon account. It might be a bit of a hassle, however, when the cart flashes a light indicating that it has not been able to read the barcode when the item was put in, and the barcode thus has to be read again. However, the advantage is that the consumer can exit the store right away after shopping without having to wait in the checkout line as long as the barcodes are read properly.
With Amazon taking the lead, a number of distributors are actively introducing smart carts. Since last year, Kroger, a U.S. based franchise supermarket, has joined hands with Caper, a startup manufacturing smart carts, to test-run their smart cart, “KroGo.”
The core technologies applied to KroGo are image scanning and deep learning. The cart automatically reads the name of the item that’s placed inside. A rear view camera attached to the touch screen scans the item first and then the built-in deep learning sensors identify the item that’s put into the cart. If the item name that’s read above matches the scanned image, the information of the item appears on the touchscreen. Now done shopping, the consumer can use the terminal attached to the cart to pay. If the pilot smart carts get positive feedback from consumers, Kroger plans to expand them to 2,700 locations.
Local distributors are also working hard to introduce smart carts. LOTTE Mart is providing members using its mobile application with smart cart services at four different locations in Seoul. Way before, in 2018, E-mart showcased “Eli”, a groundbreaking smart shopping cart. The cart uses self-driving technologies along with sensors and a 3D camera to detect the consumers' movements and follows them from two meters behind. Eli also comes with a wireless smartphone charger and a touch screen that shows information of the items. Backed by the growth of the "untact" trend, E-mart is actively preparing to use the data accumulated through Eli to commercialize smart carts.
A Relief Pitcher of Offline Distribution
We have entered an era of online shopping. Especially in South Korea, the sales of large offline retailers plummeted to the extent that they’re increasingly reducing the number of stores. An increase in the number of one-person households, declining population, and preference for a large variety of items in small quantities are all trends that pose a threat to the very existence of these large stores who are finding it very difficult to survive without innovation. Accordingly, offline distributors are adding multiple features that add convenience to shopping carts which are the closest to consumers to help enhance satisfaction levels. This is why smart carts are believed to have what it takes to bring customer experience and satisfaction level to the next level.
Another great advantage of smart carts is that they dramatically reduce the waiting time, thereby resolving the biggest challenge that offline stores are often faced with. The main reason cashierless stores were opened in the first place was to reduce time spent waiting in line. It’s only natural for customer satisfaction to improve if all that they have to do to pay is to place the items in the cart.
In addition, considering the preference for staying contract-free, smart carts that offer contact-free payment options seem more attractive and appealing. The screen attached to the cart displays information regarding the items, discount events, and advertisements in real time, providing information that both the consumer and supplier want. However, offline distributors struggling to grow are often hesitant to get past the pilot phase and roll out more smart carts, given that they are far more expensive than ordinary carts. Nevertheless, it’s now certain that smart carts are no longer an option, and those who sit on their hands will fall behind. Only the companies who grasp the opportunity and roll out smart carts ahead of others will become the new winners in the distribution market. These tech leaders have the power strong enough to win back consumers once lost to the online market.