According to Deloitte’s 2022 retail industry outlook, leaders are buying into cashierless stores over the next five years. But implementing cashierless stores is costly and doesn't always add up to success for grocery retailers. Michael Jaszczyk, CEO of GK America, which provides a foundation to support retailers’ customer engagement strategies, spoke with Winsight Grocery Business recently about the challenges and how to navigate this cashierless evolution.
Diane Adam: Retailers are looking to invest in a workforce for the future. With grocery retailers facing labor shortages, is cashierless grocery going to accelerate faster than expected/wanted for many grocers?
Michael Jaszczyk:For retailers to meet the flexibility, speed and convenience customers expect, grocers are rethinking how they invest in checkout technology amid labor shortages. Cashierless stores are a large part of this. They can be autonomous or staffed, providing flexibility in how grocers implement this type of store format. As grocery technology continues to evolve, we’re seeing more of a hybrid approach to stores, with formats ranging from superstores to traditional stores as well as fully automated stores. It’s important for grocers to have a diverse range of store formats to meet customer needs and manage labor.
According to Deloitte’s 2022 retail industry outlook more than half of leaders believe that staff-free stores will be common in the next five years. How does this forecast look for grocery retailers?
New innovations and partnerships in the grocery industry demonstrate the importance of enabling innovative technologies that improve the in-store shopping experience. In the next five years, there will continue to be an increasing demand for seamless and secure checkout that gets customers in and out of the stores quickly. Grocers are taking a second look at the checkout concepts they are using. More than ever, they are being encouraged to experiment with new tech that will solve today’s payment challenges.
Consumers want to be able to order ahead, check in, grab their order and just walk out or pay on their phone. Cashierless checkout is as easy as it gets. The technology will also remove any friction and still allow businesses to interact with consumers, whether by sending real-time relevant offers or rewarding loyal customers in the mobile app.
Buying into cashierless stores can be costly and focuses on technology and automation as a driving force. How will the grocery retail industry adapt when budgets are already razor thin?
That’s true. The reality is, implementing the hottest, trendiest tech like cashierless stores is costly—and doesn’t always lead to success. For traditional grocers, cashierless concepts may not always be the answer. 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. Additionally, there are options that incorporate apps, like the sign-in required at Amazon Fresh, and options that can be used on a mobile device without the need to download an app, eliminating potential barriers of usage for customers.
These mobile POS solutions can create efficiencies by turning employee tablets and smartphones into modern point-of-sale devices with innovative clienteling concepts. Even without cashierless technology, mixing different store formats on a single platform will allow grocers to create a fast, convenient and frictionless experience without elevating the operational costs beyond their value.
To select the right payment technology, what do grocery retailers need to consider in identifying their goals going forward?
To identify the right payment technology that will lead to the greatest ROI, retailers must begin by identifying their goals. First, they must evaluate which payment technology fits within their retail format and unique shoppers’ needs. And then they must consider implementing multiple forms of checkout, such as cashierless, self-checkout or mobile self-scanning options. The important thing is that grocers evaluate the flexible technologies that meet the needs of their existing retail format and shoppers, as well as adapt for tomorrow.
The pandemic certainly drove retailers into the transition period of the cashierless evolution much faster than anticipated. How can retailers mix different checkout formats to still deliver the frictionless experiences consumers expect?
During this transition period, grocers who mix different checkout formats on a single platform will increase flexibility, reimagining the way consumers order and pay. Grocers should consider how to cater to consumers who will lean into experimenting with new technology while also considering shoppers who find the technology intimidating or exclusive.
For example, they can first offer easy-to-adopt and user-friendly innovations like BOPIS or QR code scanning that shoppers of almost any level of digital understanding can utilize. Then, when implementing cashierless checkout, they can allow returning customers to preauthorize payment, shop and leave the store without any further interaction. Or they can decide to use in app mobile payment or even a pay tower.
Grocers can also provide the same benefits from other store formats that shoppers are familiar with, such as promotions, loyalty program perks, mobile applications and consumer tools, to ensure consistency throughout all channels. A fully integrated solution will allow retailers to mix all these different formats, giving shoppers the freedom of choice in how they checkout.