The cashierless store trend

Some retailers may be reluctant about using the “honor system” when it comes to servicing customers. Below are just some of the reasons why:

• Nearly one in 11 people commit the crime of shoplifting at some point in their lifetime.¹ 
• Every year, shoplifters boost more than $13 billion worth of merchandise. ¹
• Only one in 48 shoplifters are ever caught. Less than half face criminal prosecution. ¹

These statistics still occur even with on-site personnel (cashiers, loss prevention, floor managers) to help watch the store. How much worse could these statistics be in the absence of cashiers and other staff? 

Cashierless stores are a new retail trend in which customers: 

• Go into a physical shop 
• Choose what they want 
• Walk out of the store 

There’s no standing in line, scanning items, or paying for your purchase at the cashier counter. Instead, all payments happen automatically and wirelessly using digital wallets connected to the store’s app on the customer’s smartphone. 

Why are stores exploring this approach? Equally important, will the cashierless business model work? 

Why cashierless stores are a growing trend

As with most retail decisions, the primary reason for using cashierless stores comes down to profit. If customers don’t have to wait in line and go through the process of scanning items one by one, stores may be able to generate more sales using fewer resources. 

A popular example of the emerging cashierless store trend is Amazon Go — a supermarket where customers’ phones wirelessly connect with turnstiles, inventory, and baskets to log which items should be deducted from users’ associated payment methods in the Amazon app. Amazon Fresh uses similar technology with its new Amazon Dash Cart.²

Amazon’s infrastructure relies on a mix of near field communication (NFC) and Bluetooth technology to help establish real-time, wireless connections with its customers’ mobile wallets. The company hopes this will help reduce friction during the checkout process, allowing it to generate more sales per unit of time. According to a survey from American Express and EnsembleIQ, the average transaction time for mobile wallets is less than one minute — compared to roughly two minutes for most credit and debit card sales.³ 

This novel approach also reduces staffing costs, helping cashierless stores to keep more of every sale they make. These benefits explain why a growing number of other retailers are jumping into the game, including Walmart, Sam’s Club, Kroger, and 7-Eleven.⁴

Will the cashierless business model succeed?

Without a properly configured smartphone and the store’s app downloaded onto the device, it’s very difficult to gain entry to any of these cashierless stores. Once a wireless connection has been established, every item you grab is instantly logged.

Even still, success is far from guaranteed for several reasons: 

• Although a vast majority of Americans now have smartphones, not everyone uses mobile wallets such as Apple Pay® or Google Pay™. 
• Grocery stores that use self-checkout lanes still need someone on-site to help customers troubleshoot issues. This type of support will be even more crucial in cashierless stores — especially for first-time shoppers. 

The cashierless approach is ideal for fast-moving consumer goods such as toiletries, produce, and other staples. For bigger-ticket items, though, this business model might not work if customers have questions or concerns about whatever they’re about to buy. 

Should you jump into the cashierless store trend?

While big box retailers experiment with the technology, it probably makes more sense for small businesses to stick to contactless payments for now.

To learn how Clover’s business management and point-of-sale solutions can help reduce costs and save time for both you and your customers, schedule a free consultation with our merchant services team today.

1 “Facts About Shoplifting,” HG.org
2 “Introducing the Amazon Fresh Grocery Store,” Amazon
3 “Cashierless Stores & Futuristic Experience Can Have a Big Impact But…,” Retail Info Systems, 26 March 2018
4 “Cashierless Stores – The Self Driving Technology that is Reinventing Retail,” Net Solutions, 6 March 2020

Editorial Team

Customer service, Insights

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