A TechCrunch article: So, Recode reported today that Twitter was tinkering around with the idea of expanding its 140 character limit to a number a bit higher….10,000 characters. But what,...
Courtesy of the Wall Street Journal:
Checkout-free technology comes with behavioral barriers for customers—and financial uncertainty for retailers.
Coffee chain Dunkin’ and hospitality stands at sports stadiums are testing a new checkout-free payment system from Mastercard Inc. as retailers try to meet shoppers’ desire for speed and reduced human contact.
Their initiatives are similar to Amazon.com Inc.’s Go technology, which uses scanners, cameras and software to let shoppers walk out of a store without stopping to pay for their purchases. Amazon has opened more than two-dozen Go-branded stores since 2018 and offered other retailers access to the technology in March. Early customers include OTG Experience LLC at its CIBO Express stores in Newark Liberty International and LaGuardia airports.
Now similar experiments are spreading as companies double down on plans to reduce social contact in stores. A survey published by McKinsey & Co. in July found that most consumers in the U.S. and China who changed their shopping habits during the pandemic expect the change to stick after the crisis.
Giant Eagle Inc. recently hired cashier-free technology company Grabango Co. to introduce checkout-free shopping at a GetGo convenience store in Pittsburgh. And Mastercard is introducing its Shop Anywhere system, built on Accel Robotics Corp.’s computer vision technology, in the final quarter of this year.
“We’re seeing huge growth in this market,” said Catherine Shuttleworth, founder and chief executive of retail consulting firm Get Savvy Marketing Ltd. “In a time where speed is really important to retailers, cashierless systems are going to be critically wanted pieces of technology.”
Retailers are still weighing key questions, including how many people will go through an inconvenient sign-up process to get queue-free shopping—and how much the costly technology will be worth to stores themselves.
Dunkin’ Brands Group Inc. is testing Mastercard’s system at an undisclosed store in California that will be rebranded as Dunkin’ Dash. Customers will have to register their credit card at a kiosk outside to receive a QR code that lets them enter. Cameras inside will track them as they select individually packaged baked goods, self-pour coffee and snacks.
Customers will have to sign up separately with each retailer using Mastercard’s technology, according to Stephane Wyper, Mastercard’s senior vice president of innovation. He said the Shop Anywhere registration process is designed to take less than 30 seconds, but that still creates friction for customers—even if signing up saves them time in the long run.
Retailers may have to offer discounts or other incentives to get customers over the first hurdle, said Ms. Shuttleworth of Get Savvy Marketing.
Delaware North Cos., which runs food and beverage stands in venues like MetLife Stadium in New Jersey, plans to test Shop Anywhere in the fourth quarter, said Jeffrey Wilkinson, the company’s chief information officer.
Delaware North is working with sports leagues like the NFL to ensure it tests the technology in venues that will host games and fans this year, Mr. Wilkinson said. “Guests and fans coming into a stadium environment now want to quickly and safely get in and out with little to no wait times on entry and exit,” he said.
Mastercard said it offers Shop Anywhere to retailers as a service that retailers can pay for on a recurring basis, giving them access to authentication technology and analytics, rather than as a one-time buy.
Mastercard, Amazon and Grabango all declined to discuss the cost of their checkout-free systems in detail.
The technologies are likely prohibitively expensive for many retailers, said brand experience consultant Tim Manning, who estimated that an initial cashierless hardware and code setup could cost as much as $3 million.
For those that can afford to get started, however, the systems might eventually cover their costs, Mr. Manning said. He estimated that installing the system would cost around $100,000 per store—a figure he said could be recouped within a year by reduced spending on staff and checkout machines.
The cashierless option is particularly tempting for convenience stores, Ms. Shuttleworth said. It could help them get data on their customers, who don’t often bother signing up to such chains’ apps or loyalty programs, she said.
The cashierless experience makes less sense in fashion and luxury retail, which depends on loyal big spenders for whom shopping is a ritual that culminates at checkout, said consumer psychologist Kate Nightingale.
Despite the pandemic, some customers continue to want a social checkout experience, even at convenience and grocery stores, she said.
“We can’t forget about the fact that, for a lot of people, going to the store is the only social interaction that they have,” Ms. Nightingale said.