to work with over the years
to work with over the years
Only one-third of shoppers have seen top tech features in stores
By Lisa Rowan, Retail Dive, July 16, 2019
• While three-fourths of customers are familiar with new retail technology features, only one-third are experiencing them in stores, according to a recent A.T Kearney report. The survey polled 1,000 people about emerging retail technology used in brick-and-mortar stores, focusing on augmented reality, mobile point of sale, cashierless checkout, interactive screens and 3D printing.
• Seventy-two percent of respondents said technology that reduced checkout time was most valuable to them, while 61% of respondents said technology that reduced the time spent navigating the store was most valuable.
• Shoppers seek convenience over novelty when it comes to technology, the report found, especially at the big-box level. Forty-one percent of respondents said technology associated with convenience had prompted them to shop at a big-box store.
A.T. Kearney’s report stresses the need for retail technology to focus on serving the customer rather than entertaining them. Only 13% of respondents said they went to a big-box store because of “technology associated with novelty,” while 14% said they visited a specialty store for the same reason. There are differences between big-box shoppers and specialty shoppers, though. Consumers look to specialty stores for customization and experience over the time-saving technology shoppers prefer at big-box stores.
The report encourages retailers seeking to bridge the gap between customer awareness and experience to ensure that technologies meet specific consumer needs, and to pair those investments with store personnel who can work in tandem with the technology enhancements. Retailers may wish to follow the example of Sam’s Club and Decathlon, to name recent examples, which have empowered their associates to serve customers throughout the store with the help of mobile checkout or apps.
Retail still has room to grow when it comes to merging technology with brick and mortar. Another recent survey from the National Retail Federation revealed that while 80% of shoppers think technology has improved their online shopping experience, only 66% said the same for in-store shopping. It’s the research and review process that seems to need the most attention, according to that report. That desire to be informed before purchasing offers opportunities for retailers to integrate technology features across sales platforms, from mobile to brick and mortar.
Retailers cash in on a ‘captive’ college campus market
By Wayne D’Orio, Retail Dive, May 23, 2019
Department stores, supermarkets and even apparel brands are adding locations on or near institutions, though experts debate whether the activity marks a trend.
Target, the trendy retail chain with a red bull’s-eye logo, has its sights set on a new kind of customer: college students. To reach them, the eighth-largest retailer in the U.S. by sales is shrinking its footprint with mini-stores that are about a third of the size of a typical 130,000-square-foot Target. Their pared-down and curated product selection packs a punch, however, with strong sales pushing the Minneapolis-based chain’s expansion, said company spokesperson Jacqueline DeBuse. In the last several years, Target has added such stores on or near some 100 campuses. It plans to open about 30 small-format stores annually over the next few years around colleges as well as in cities and other areas lacking space for a full-size location. Because Target stocks a wide variety of items and its supply chain allows the retailer to readily juggle products based on consumer interest, she said, its smaller stores are able to meet demand for items specific to its college customers, such as grab-and-go food, electronics and bedding that fits dorm room mattresses.
The retailer is not alone. While colleges have long looked to outside companies to help them run features like bookstores and fast-food restaurants on campus, a newer retail push includes department stores, supermarkets and even locations of popular apparel brands. “Good retailers are always looking for an outlet,” said Steve Niggeman, an executive vice president with Metro Commercial, which brokers real estate deals between colleges and retailers, including Target. While colleges vary in size and culture, their students, staff and even visiting parents can be “pretty captive” customers, he added.
Creating loyal shoppers
Late last year, the Florida-based grocery chain Publix opened its first on-campus location on land leased from the University of South Florida, even though it already had a store less than a mile and a half from the Tampa campus. The spot, about half the size of its typical supermarket, is located near the school’s new residential village, which can house around 2,000 students. It has been a success on several levels, said Ana Hernandez, assistant vice president of housing and residential education at the university. Students are looking for more amenities, she said, while the university is seeking ways to deepen students’ connections to the campus community. Before the deal was made, she added, the university’s student government passed a resolution in favor of adding the supermarket. And Publix agreed to hold at least two job fairs each year to offer students jobs and internships.
“There’s no question retailers are trying to build loyalty,” said Nick Egelanian, the president and founder of SiteWorks, a retail and development consultancy. While there’s a big movement among colleges and universities to build more student housing, retailers know being associated with a dorm is a positive experience for the brand, he added.
Still, Niggeman warns that not every school can support this type of retail. Indeed, USF has 50,000 students, including around 6,300 who live on campus. He estimates colleges with at least 20,000 students could support additional retail on campus. But as more students choose where to go to college based on the type of “experience” they can have, retail options can become a factor, he said. Given the popularity of athleisure wear, for example, he guessed chains such as Lululemon would be right at home on some campuses. In fact, Lululemon has opened “seasonal” temporary stores near several institutions, including one close to the University of Pennsylvania, in Philadelphia, last year.
Egelanian thinks of this growth as a new variation on an old theme. “There has always been retail [near] colleges,” he said, adding that some, such as Harvard University, Georgetown University and the University of California, Los Angeles, exist amid well-established neighborhoods chock full of retail stores. Citing Target’s growth, Egelanian argued that the new stores are more an outgrowth of retail chains moving into urban areas. But he stated that the retailer’s ability to adjust nimbly to meet demand gives it a leg up on other retailers, such as Walmart, in this kind of a market. For its part, Walmart pulled back on a similar initiative a few years ago.
One of colleges’ stalwart retailers, Barnes & Noble, has noticed changing retail trends on campuses. The chain now refreshes its merchandise three to four times a year, said Kenneth Wincko, vice president of marketing for Barnes & Noble College. Inside its campus stores, the bookseller is experimenting with specialty retail, such as curated selections of health and beauty products, or journals, athletic wear and other wellness-related items. Barnes & Noble tries to integrate into campus life in other ways as well, hosting up to 3,000 events per year and opening pop-up shops near sports stadiums during major events. It is also open to students’ feedback. For example, when Barnes & Noble added a coffee shop inside its University of Central Florida campus store, students asked to buy the plants — so the chain is now experimenting with selling plants, Wincko said. The chain currently has about 770 on-campus locations, and Wincko said there are plans to add dozens more each year.
To stay in touch with student needs, Barnes & Noble each year surveys 100,000 students using email addresses collected from campus stores, he said. Recent survey results showed that half of students responding don’t have all the materials they need on the first day of class. To address that, the company is working with faculty to identify needed items, from books to lab equipment, so the store can be properly stocked before the semester starts.
What’s next for campus retail
Today’s students may be comfortable shopping online (in some cases even during lectures), but Wincko and others say blending brick-and-mortar and e-commerce is key. Target plays up its ability for students, or their parents, to buy items online and pick them up at a nearby store within an hour, DeBuse said. The retailer is seeing double-digit sales growth in this area, she added, which is especially popular at the beginning of the academic year. Amazon’s pickup points on or near college campuses serve a similar purpose.
Yet the bonus for retailers looking to do business on campus, according to DeBuse, is the ability to create positive feelings about their brand just as many students are beginning to make their own purchasing decisions. Even Niggeman isn’t sure where this trend will end up. “We’re not going to be putting 1 million square feet” of retail on campus, he said. But colleges that are increasing enrollment should consider how retail factors into that growth. “As you expand enrollment, you need more support,” he said.
Three Steps to Drive Fuel-Only Customers Into the C-store
By Danielle Romano, Convenience Store News, April 19, 2019
It’s a classic tale of two customers. One is the fuel-only customer who pulls in, gases up and drives off without an incremental visit to the convenience store. The other is the fuel-up customer who also stops inside the store for their morning cup of coffee, mid-afternoon pick-me-up snack or on-the-go lunch. “A majority of your customers are fuel-only customers not stopping inside the store. We want to change that behavior,” said Kimberly Otocki, content marketing specialist at Paytronix Systems Inc. “On the flip side, there’s probably a smaller minority of your customers who are actually stopping at your fuel pumps and coming into your store, so we want to make sure and maximize that number because that’s where we’re able to change their behavior and get those incremental spends and visits.”
Speaking during the recent “How to Drive Pump-to-Store Visits With Data” webinar, hosted by Convenience Store News and sponsored by Paytronix, Otocki provided pointers on how to drive fuel-only customers inside the store, where higher-margin products are and where operators can collect more data on customers to market to them effectively. Discussing how c-store operators can collect data to change customer behavior, Otocki outlined three steps:
Step 1: Identify Customers
C-store operators need identifiable information to effectively reach customers. When looking at pump-only customers, retailers are uniquely positioned to reach them through at-the-pump advertising of in-store items. Citing The Coca-Cola Co.’s research on advertising at the pump, Otocki noted that 32 percent of customers noticed signage at the pump that influenced an in-store purchase during the same visit and 21 percent noticed signage at the pump that influenced an in-store purchase in the future.
Once retailers get fuel-only customers into the store, they must hook consumers and give them a good reason to give up their personal data. A few possibilities include:
• Welcome rewards as a thank-you to customers for providing valuable data and getting to be known as marketable customers.
• Text to join or mobile app that is easy and doesn’t require too much time.
• Ambassadors, such as cashiers and staff, who can speak to the value of the retailer’s offering to customers.
Step 2: Get Customers to Engage
Nearly three-quarters of customers (73 percent) say the best promotions give discounted fuel with in-store purchases. As opposed to continuously giving customers deep discounts that de-value sales, retailers can utilize tie-in promotions. The most effective are buy X amount, get X cents off per gallon, or visit 10 times for X cents off per gallon.
Another viable promotion is to offer fuel-only customers a free hot or cold beverage to drive them into the store. This tactic allows retailers to handle their margins and ensure they aren’t giving away a product too large. “We’ve seen fantastic results for this particular promotion. One of our clients saw a 55-percent increase in visits during that period from this targeted customer base. Beyond that, a spend lift of 184 percent,” Otocki pointed out. “That’s because these customers weren’t just coming in to get that free coffee or free dispensed beverage: they were coming in and tacking on a snack or sandwich, increasing their basket size.”
Step 3: Change Behavior
Getting customers inside the store for the first time isn’t the hardest part. Rather, it’s getting them to come back in time and time again. To do that, c-store operators should utilize data with segmentation. Convenience stores traditionally have three key segmentations:
• Bubba, who visits daily to buy Slim Jims, soda and chips;
• Susie the Soccer Mom, who visits two times a week for grab-and-go snacks for the kids that are healthier options, as well as salty snacks; and
• Professionals, who visit less frequently (every month) and prefer options like protein bars, shakes and healthy snacks such as nuts and popcorn.
Without segmentation, c-store retailers are at risk of running blanketed offers to all customers, which can be costly, Otocki cautioned. Instead, she suggests sending two different offers to two different segments. For example, retailers can send a free product or heavy discount to Segments 1 and 2 because it will motivate them for an incremental visit. With Segments 3 and 4, a BOGO promotion or a lesser discount might be more appropriate. Both moves will bring operators closer to motivating the right customers with the right promotions.
Continuous campaigns and machine-learning segmentation are other viable options that utilize data for maximum effectiveness. The first analyzes each guest’s unique visit cadence to trigger offers to the right person at the right time, while the latter discovers segments of similar guests based on what they do, which then can be translated into personalized, highly relevant offers.
GO BIG OR GO HOME
Otocki had these final key takeaways for convenience store operators:
1. Customers can change their behavior.
2. Get to know and identify all customers.
3. Data is key to changing behavior.
4. Think BIG.
Subscription services such as Burger King’s recently introduced BK Café Subscription are “perfect for c-stores,” according to Otocki. For $5 a month, customers can get a small coffee a day at the fast-casual restaurant at no additional cost. “It’s a great model to be able to utilize because Burger King isn’t just doing this in order to get $5 a month from their customers and give them a coffee every single day. They’re doing this because they know it’s the way to get those visits to come back time and time again,” she explained. “If you already paid for your coffee every morning with your subscription, you probably will stop there because you know it’s been paid for. On top of that, the hope is that if these customers are coming in, they’re likely to purchase more items.”
Beyond the Bookstore: A Look at the Rise of Campus Retail
By Steve Niggeman, Metro Commercial and NREI, March 28, 2019
The face of campus retail is changing. For decades, universities were known for their dearth of retail beyond a college bookstore. But now, retailers both large and small are seizing the opportunity to expand their operations beyond traditional shopping centers and onto university campuses where they can capture the attention of a niche audience: students. Students’ demand for college essentials in a convenient location while away at school has led retailers to create college-geared shopping experiences. Take a look at the factors driving the campus retail evolution and learn how universities can curate the right retail mix.
Factors fueling the rise of campus retail
While it’s not a new phenomenon, campus retail is evolving to better serve the needs of universities and their communities. Retailers are competing for prime real estate on college campuses where they can get in front of a captive audience comprised of thousands of students and faculty. This is a close-knit community that retailers need to support on an annual basis with an array of amenities, including entertainment and fitness options, school essentials, grab-and-go food, comfortable clothing, home decor, groceries, and more. Sure, students have the option to order online and they can ask their parents for care packages, but if universities want to stand out in this competitive market, offering a range of retail uses right on campus will help boost retention rates and attract prospective, convenience-driven students.
Fulfilling university campuses
National retail brands are also realizing that university campuses present an opportunity to further drive sales. On-campus retail provides brands with the opportunity to grow their fulfillment side of the business. Years ago, parents would send care packages directly to the student mailroom. However, college mailrooms aren’t always accommodating to student schedules and they can easily get backlogged. It’s now easier for parents to go online and order a custom package from a major nearby retailer with just a click of a button. The student can then walk across campus to the Target or a similar store to retrieve his or her package that same day. Talk about convenience!
Campus retailers appealing to younger generations
Tapping into the college market isn’t easy. The retailers that want to be on university campuses have a deep understanding of the younger generation and what attracts them. They sell merchandise that makes sense for not only the students, but the surrounding community and university by evaluating what’s already being offered in the local retail market and what’s missing. For example, a retailer located on an East Coast campus will likely look different than one on the West Coast. It is all about paying attention to your audience and curating the merchandise accordingly. Retailers also know that younger consumers are interested in personalized service and memorable experiences. Campus retailers that offer special incentives for university students, including after-hour shopping events and accepting university currency, can win the favor of young shoppers and turn them into life-long customers.
Looking ahead, campus retail will continue to grow and evolve to meet the changing needs of students. Retailers that can add value to campuses will gain momentum and expand their footprint across universities, while less popular concepts will die out and be replaced. It’s important that campus retail adds to the overall college experience, gives universities a competitive edge, and supports the needs of students, faculty, and the surrounding community for years to come.
WSJ: Amazon testing cashierless technology for larger stores
By Dan O’Shea, Retail Dive, December 4, 2018
• Amazon reportedly began testing the enabling technologies behind its Amazon Go stores in larger spaces to find out how well they would work when in larger store formats, according to a Wall Street Journal story.
• The news was attributed to unnamed sources who stated they didn’t know if Amazon is planning to use the technology in its Whole Foods stores, but speculated that would be a likely application for it.
• Amazon Go stores use a combination of sensors, computer vision technology, artificial intelligence and deep learning algorithms to identify items that customers pick up, and make sure they are correctly charged and payments are processed via mobile so that customers can leave stores quickly.
Before Amazon opened its first Amazon Go store in Seattle last January, it tested the enabling technologies of its cashierless concept for months. The company reportedly delayed that store opening due to technology glitches that surfaced in test situations when the store became especially crowded.
Amazon eventually overcame that hurdle, and has opened additional Amazon Go stores in Chicago and San Francisco. The merchandise offerings are, in general, more typical of small convenience stores than large grocery stores. It’s a format in which Amazon has been able to assure the quality and reliability of its technology and operations.
A larger space with many more products would make things more complicated, requiring additional testing to make sure performance in a larger space can meet the expectations of Amazon and its customers.
It’s not clear exactly what the company has in mind. As it expands Amazon Go stores into new markets and fills out existing markets with more locations, does it want to build larger stores? Or, does it want to take the technology that has worked well in Amazon Go stores and apply it to Whole Food locations?
In September it was reported that the company was thinking of opening 3,000 Amazon Go locations by 2021 in major metropolitan areas throughout the U.S. Building larger Amazon Go stores would be an intriguing move, allowing Amazon to organically expand on a cashierless store concept and placing it into more direct competition with some smaller grocery store chains and restaurants that may not be ready for such a development.
The faultlines in retail real estate
By Daphne Howland, Retail Dive, October 1, 2018
The American retail landscape is different now: Malls are losing anchors and big boxes are in decline. But e-commerce is hardly the only reason.
As Armageddons go, the retail apocalypse is turning out to be short-lived. After a few years of headlines blaring about devastation and the scourge of e-commerce for physical stores, retailers in recent quarters are posting healthy comps and increases in foot traffic. “The term ‘retail apocalypse’ has been misused for years,” said Michael Brown, partner in the retail practice of global strategy and management consultancy A.T. Kearney and author of the report The Future of Shopping Centers.
“Throughout the whole shifting dynamic in retail, the one thing that has never changed is the need to have compelling goods and services offered with convenience and a price people are willing to pay. Retail, in general, is not a physical or digital world.”
And retail generally appears to be on the rebound. Retail comp sales in the second quarter were up 4.2% year over year (4% excluding retail giant Walmart), the highest level since 2007, according to a Retail Metrics report emailed to Retail Dive, which noted that 19 retailers to date have reported negative Q2 comps, “down dramatically from Q1 when 38 chain[s] turned in negative same store sales and 1Q17 when 60 companies did so.”
It’s still not a pretty picture on the ground, however. Second quarter mall rents fell 4.6% from the first quarter and 7.1% year over year, hit by major store closures from Toys R Us, Sears and J.C. Penney, according to a trend report from commercial real estate firm JLL. Mall vacancy rates hit 4% during the period, JLL said. The retail sector suffered its worst quarter in nine years with net absorption of negative 3.8 million square feet, which pushed the regional mall vacancy rate up by 0.2% to 8.6% as the average mall rent increased 0.3%, according to another report from commercial real estate firm Reis emailed to Retail Dive.
All in all, retail consolidation will continue to make headlines in 2018, but regional mall defaults are unlikely to reach the levels seen last year, according to Morningstar Credit Ratings, LLC. That’s partly because so many big store closure plans (like Macy’s, Toys’ and J.C. Penney’s) will have been mostly executed. Plus, shopping centers are filling their vacancies, though often with non-retail tenants. Architect Stan Laegreid, a principal at Field Paoli Architects and the designer of several high-end malls, says we’ll soon notice that new mall designs will increasingly be hospitality, rather than retail focused, from the jump.
But it’s also because the remaining chains are doing better, as they’ve overhauled both stores and merchandise, in part with proceeds from last year’s tax windfall. “A number of our retailers are getting better and healthier. And I think the tax cut on their business gave them more earnings to invest or replenish their merchandise,” David Simon, CEO of Simon Property Group, Inc. told analysts last month, according to a transcript from Seeking Alpha. “We’re working through a number of the bankruptcies and replacing them with better retailers. We’re upgrading our mix.
Is it e-commerce?
As thousands of U.S. stores have shuttered in recent years, falling sales were being attributed to everything from bad weather to a still-hesitant consumer, yet e-commerce kept humming. It’s a two-fer that’s led to store closures and tactical shifts.
Toys R Us threw in the towel, Macy’s contracted its massive footprint, and Sears and J.C. Penney have struggled, and all that precipitated significant store closures. Legacy retailers, meanwhile — department stores like Macy’s, mass merchants like Target and specialty retailers like Best Buy and teen apparel chains — have all turned their attention to boosting digital sales. Walmart has demonstrated the most dramatic shift in focus, scaling back store openings in previous years as it bought up online outdoor retailer Moosejaw for $51 million in cash, vintage-inspired online women’s apparel site Modcloth and menswear site Bonobos for $310 million (all three in 2017), just months after its $3.3 billion acquisition of Jet.com.
It’s a process that may involve retail chasing its own tail. Digital sales are outpacing retail growth in general, and legacy retailers are scrambling to notch gains in that channel. That in turn is fueling yet more e-commerce growth. “In the midst of an e-commerce revolution, retail remains a mixed bag,” according to a report last week from global commercial real estate services firm Cushman & Wakefield emailed to Retail Dive. “While well-located Class A properties continue to thrive, bolstered by a stronger economy and wealthier consumers, Class B and C retail properties continue to face challenges as e-commerce grabs an increasing share of the retail sale pie. The forecast for shopping centers (which excludes urban, standalone and mall retail properties) calls for net absorption to taper off over the coming years, with vacancy rising from a low of 6.6 percent in 2018 to 6.8 percent in 2020.”
It’s not e-commerce
The phenomenon of e-commerce tends to get credit for all the disruption in physical retail, but the reality is much more complex.
“We all know that even today no more than 12% of all retail sales are done online,” Kearney’s Brown said. “E-commerce is an important part of the ecosystem, but brick and mortar retailers also have the lion’s share of e-commerce. It’s those brand and experiences that they know is what people gravitate to. With the exception of Amazon and Wayfair, there’s not many of the online retailers that have reached any scale that makes them a dominant player.” Indeed, several once pure-play retailers are opening stores, fulfilling Gartner L2 analysts’ prediction a couple of years ago that physical stores are an inevitable tactic in any startup’s growth strategy. In recent weeks, mattress startup Casper announced plans for 200 stores in North America and lingerie e-retailer Adore Me unveiled plans for as many as 300. Meanwhile, a brick-and-mortar record chain in New England that specializes in media that can be streamed or bought for less at Amazon is expanding the number and size of its stores. All see stores as critical to making connections with customers.
“Online is fast, it’s frictionless and it’s probably cheaper,” Bob Phibbs, CEO of retail consultancy The Retail Doctor, told Retail Dive in an interview. “But brick and mortar can do something that online, by design, can’t. Physical stores are still the drivers of revenue — the goose that lays the golden egg is the brick-and-mortar store. Maybe they start in the store and they finish it online, but it’s in the store environment where there are about 15 touchpoints that happen, and those ‘yeses’ collectively make a sale.”
Beyond the limits of e-commerce, (which include not just a lesser ability to connect with customers but also higher costs and slimmer margins), the shifting sands of the physical retail environment are trends that go back decades, according to retail analyst Nick Egelanian, president of retail development consultants SiteWorks. “E-commerce is the loudest voice in the room, but it’s the least disruptive,” he told Retail Dive in an interview. Like others, Egelanian does see e-commerce as significantly upending retail in recent years, but he doesn’t place it in the top three. Foremost is the overbuilding of stores going back several decades, plus the fact that two major types of retailing, mall stores and big-box stores, have reached their growth limits, he said. “As of the end of last year there was 8.5 billion square feet of retail space,” he said. “I’m guessing 3.5 billion of it needs to be eliminated.”
Even more ominous, perhaps, is the way that many retail companies now approach their strategies as financial instead of retail enterprises, he said. “It’s a financially driven industry now rather than a retail-driven industry,” Egelanian said. “Every earnings call these days has to do with some kind of financial engineering. You have this ill-fitting financial world that looks for growth at three to seven years when in retail it’s more like 25 years.” Toys R Us is a good example, according to Egelanian. “There’s no inherent reason why a toy store operating in today’s world can’t be successful,” he said. “It was loaded up with debt and doomed from the start because the way the debt was set up, there was no incentive to save the company, the incentive was to liquidate. It’s oversimplifying somewhat, but in a nutshell what we’re talking about.”
What comes next for retail is happening now, he also said, but the picture isn’t all clear just yet.
For grocery stores and other big retailers selling commodities, it could mean fulfilling e-commerce orders using robots, to conquer the efficiencies. For specialty retailers, showrooms, like Nordstrom’s Local and Bonobos’s Guideshops, allow the best of both worlds, connections in stores with the ease of online shopping. But not enough retailers are taking such approaches, according to Lee Peterson, executive vice president of brand, strategy and design at retail design firm WD Partners. “Showroom stores – where are they?” he told Retail Dive in an email. “Specialty retail isn’t trying what they know Bonobos was successful at. I was at a new ‘lab’ store recently and voila! It’s a store, same as the old store, only smaller, with [gimmicks]. That’s a lab?? Has no one heard of ‘fail fast’ in specialty retail??”
Amazon Go Isn’t The Only Game In Town When It Comes To Autonomous Retail
By Dees Stribling, Bisnow, August 19, 2018
During the eight months since Amazon opened its cashierless retail operation in Seattle, interest has been high among other retailers to test and even roll out their own automated systems.
Not all cashierless stores are going to be near the nation’s tech hubs like Amazon Go. In Indiana, for instance, convenience store chain Ricker’s is rolling out what it calls “frictionless checkout technology” in its 56 locations. The system is facilitated by an app called Skip that allows customers to scan items as they shop, and then pay by way of a linked credit card as they exit, without the assistance of a clerk. Skip calls the system a “hybrid of mobile pay and Amazon Go.” The system is slated to be fully operational by September at all Ricker’s convenience stores, which are owned and operated by Ricker Oil Co.
Closer to the beating heart of the tech world in Mountain View, California, the considerably more upmarket Inokyo (rhymes with Tokyo) is launching a prototype cashierless store more like Amazon Go. “Cashierless stores will have the same level of impact on retail as self-driving cars will have on transportation,” Inokyo co-founder Tony Francis told TechCrunch. Shopping at Inokyo also involves downloading an app and a linked payment method. Customers receive QR codes, and then cameras in the shop track shoppers (without facial recognition software) and what they pick up. Customers scan the QR code before they leave the store, completing the transaction. In earlier versions of the system, customers didn’t need to scan before leaving, but TechCrunch reports that the psychology wasn’t right. The process was so seamless that customers felt as though they were stealing.
Ricker’s and Inokyo and Amazon Go are only glimmers of bigger things to come for cashierless retailing, according to estimates by Juniper Research. Amazon Go and other “invisible payment” technologies aimed at reducing or removing physical checkouts from the retail experience will process more than $78B in transactions by 2022, up from $9.8B in 2017, a study by Juniper found. The technology, currently in only a few locations, will be in over 5,000 stores nationwide within five years, the company predicts. The number of checkout apps will grow from 4 million to over 30 million over the same period.