Imagine walking into a store, picking out what you want and then leaving without checking out. Up to now, that might land you in jail. Amazon made that fantasy a reality when it recently opened its first Amazon Go cashier-free store. Many people trumpeted that it would revolutionize retail. But will the ability for shoppers to skip the cash register change where they shop and their relationship with money and technology?
Let’s start with how this works. Five years in the making, Amazon’s pilot convenience store seems like it came from a sci-fi movie. Shoppers enter through an electronic glass gate activated by the store’s app on their smart phones. Then you shop and leave. The app is connected to sensors and cameras that track your every move and tally up your purchases. When you walk out, it charges you and emails you a receipt. You’re done.
Convenience as table stakes
While convenience increasingly contributes to customer satisfaction, will it translate to shoppers being more loyal? Not so much, according to John Carroll III, head of customer experience at Ipsos Loyalty. He says that people have been getting conditioned for easy checkout transactions for years in other retail categories like hotels, restaurants and car rentals.
For example, eliminating the checkout line in the hotels “didn’t do a lot,” for hotels, he says. The necessary technology and payment systems were already in place so there were no operational barriers for rivals to copy it. Letting guests get their receipts under their room door “is like putting a chocolate on the bed,” he adds. “The cost to hotels was significant and yet the loyalty benefit to hoteliers was near zero.”
So once every retailer makes checkout easy, it becomes table stakes and out goes the brand loyalty benefit, argues Carroll. “Making things easy leads to commoditization and that is only going to benefit the low-cost player.”
Losing the “ca-ching” feeling at the register
What instant checkout is more likely to influence is how shoppers think about spending. “As new payment technologies explode, we’re taking purchases further and further away from the price and personal money management,” says Alison Chaltas, global president, Path to Purchase at Ipsos.
The role of pricing and impulse purchases in these situations fascinates Chaltas. “I might go to Amazon Go and near the exit I’d find beautiful flowers and cookies that weren’t on my list,” she says. “Did I even think about how much I paid?”
That transaction shift could encourage less mindful spending. “The first thing I think will happen is people will purchase more impulsively than they would in a store where you use traditional payments,” says Kit Yarrow, consumer psychologist and author of “Decoding the New Consumer Mind.”
There’s also the potential psychological shift as technology breeds our instant gratification. “More and more we will be expecting faster, easier, more seamless transactions in our lives,” Yarrow says. Which brings us back to the idea that these innovations will become the norm in the not-so-distant future.
A global trend
Amazon isn’t the first to try to remove the pain of the checkout experience in stores. Companies around the world have tested or launched similar technologies where customers do the work staff used to do. They include Walmart with its Scan & Go test; Kroger with its Scan, Bag, Go shopping technology; and McDonald’s self-service kiosks.
In China, Danish fashion company Bestseller combined facial recognition technology with a WeChat mobile payment app to let shoppers at two of its fashion store brands skip salespeople and cashiers in selecting and making purchases.
Familiarity breeds contentment
The application of these technologies get people used to automated and often hidden technologies interacting with them. A recent Ipsos study that showed that the more people use and become familiar with automated technologies, the more they like it.
One thing is certain. “Our absolute love affair with technology will continue to grow along with the internet of things,” Chaltas says. “This is only the beginning.”