The Cashless Store: Fad or Future?

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By Published On: August 20, 20190 Comments

Walking into a store using your palm, walking out without paying with cash or card. Three new unmanned stores opened in Singapore last week - are we ready to use AI for our everyday shopping?

The thought of a cashless store was something that many customers thought was far ahead in the future. It turns out, however, that they’re here already. In Singapore, three cashless convenience store opened, using AI and tracking tech to scan and secure purchased goods without using cash.

The three stores, Octobox, OMO Store and Pick & Go, announced that these stores would also debut the first facial recognition concepts later in 2019. The stores include the use of ‘palm scanners’ to enter the store, RFID (Radio Frequency Identification) to track the items that are taken off the shelves and checked out, and AI to follow the shopper’s movement.

It’s not just Singapore that’s experimenting with these cashless stores – Amazon came out with its cashless and queue-less store, Amazon Go, in 2018. With 17 convenience stores open across the US as of 2019, there is clearly wiggle room for this innovative concept of using AI as a way to spend. In 2016, Waitrose also began trialling the idea of a cashless store, using only a mobile app and cards as accepted payment methods. “Our convenience model is now more flexible than ever, especially as payment methods and ranges continue to evolve, so we’ll look forward to exploring other opportunities like this in the future,” explained Jackie Wharton, Waitrose’s Director of Convenience.

A few months ago in Australia, 7-Eleven introduced its first cashless and cardless convenience store in Richmond. “Nobody likes to wait, so eliminating queues was part of the mission for this mobile checkout. In the new concept store, customers will notice the absence of a counter. The store feels more spacious, and customers avoid being funnelled to a checkout location creating a frictionless in-store experience,” said Angus McKay 7-Eleven’s CEO. “Continuing our focus on providing ultimate convenience, this year we’re trialling a catering service, and we’re thinking about ways to provide an extraordinary experience to more customers, more often, in more ways that suit them. That might be delivery, it might be micro store formats. We’re trying to push the notion of ‘convenience’ to its absolute limit.”

What Are the Benefits?

There are some immediate benefits to this initiative. Partly as a focus to steer customers back into the appeal of brick-and-mortar stores, it also eases the retailers with the ‘difficulty’ of hiring new staff. On a financial note, this is also a great thing for retailers who wish to reduce the costs of holding cash on-premises – it’s also a safer way to secure the business after hours. For retailers who want to track the ever-changing customer habits and enjoy adapting shopping displays to reflect those changes, this is an ideal step forward.

The three unmanned pop-up stores were showcased at the Singapore Retail Industry Conference and Exhibition 2019, with funding and support from Enterprise Singapore, a government agency.

“They show the spirit of the sector, that even in difficult times, we are still constantly innovating and trying out new solutions,” explained Chan Chun Sing, the Trade and Industry Minister. “That gives me confidence that this sector will be in good shape. If we just play defensive then even when the upturn comes, we will not be ready. When we play offensive even in tough times and constantly test out new ideas, we put ourselves in good stead.”

How Does it Work?

When it comes to tracking and securing the purchase of a product from a customer, it can sound somewhat creepy. Using smart cameras and smart shelves, the AI-infused store tracks and maps customer’s movements and the purchases they make within the store. If the item gets put back on the shelf, it gets removed from the customer’s basket. In terms of purchases, customers can link their payment to their palm when they walk into the store.

“When a product is taken, the smart shelves will detect it. It will link up with the cameras and tag the item to the customer’s account. Even if a customer picks up an item and puts it in their bag, the item will be charged to their account when they leave the store,” explained Alex Ng, Pick & Go’s Director.

For stores that simply don’t wish to accept cash, there are a few ways to implement a cashless store. Accepting cards and mobile payment are the easiest way, but it’s only a matter of time before cards will no longer be accepted. For stores like 7-Eleven, users are asked to download the sore’s ap, upload their credit card details and a selfie.

Are There Downsides?

As with all new technology, there are a few bumps that need to get smoothed out before it becomes mainstream. Although this isn’t new tech by any means, it is slowly transitioning into a conventional way for customers to shop. Mr Chan explained that the state of retail is slipping into disorder and that this initiative may take some time to get rolling due to ‘downside risks and the many uncertainties around the world’.

“So we need to train our workers and adopt available technologies. If we can do these two things well, then we will have taken concrete actions to not only enable us to weather the current downturn but also prepare ourselves and our workers for the next upturn,” he explained.

In Philadelphia, cashless stores have been banned, putting an immediate halt for Amazon Go’s plans to roll out its queue-less and cashless venture. “I can get my coffee and muffin, but the person behind me who has the monetary unit of the United States of America, that’s been accepted here in Philadelphia since Ben Franklin, can’t. It just seemed wrong,” said Philadelphia’s City Councilman, Bill Greenlee, in a press conference.

So, is this the future for customers and retailers? Yes- there’s no doubt about it. But, it doesn’t mean that it will be present with every retailer. As soon as the retail sector experiences an uplift globally, then customers may start seeing more cashless pop-up stores arriving. When the world gets used to the concept of using cards and apps rather than cash, then maybe we’ll begin walking into stores and swiping our wrists rather than collecting change from a teller.

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