Monday, May 16, 2022

Checkout-free stores on the rise

The number of mentions of ‘ambient commerce’ (ie, checkout-free shopping) in retail company filings more than doubled from 157 in 2016, to 320 in 2021, according to GlobalData.

In its latest technology, media and telecoms report, ‘TMT Predictions report for 2022’, GlobalData also notes that Covid-19 will continue to accelerate:

  • The international expansion of checkout-free stores
  • Non-food specialist stores using ambient commerce
  • Increased competition for Amazon’s stores.

GlobalData Analayst Jemima Walker offers her view on the future of ambient commerce:

International expansion

“As consumer demand for ‘safe shopping’ accelerates due to Covid-19, and the return on investment of checkout-free tech is revealed, retailers that have already implemented this technology such as Tesco, ALDI, Sainsbury’s, and Carrefour will see their advantage eroded as competitors join the checkout-free retail race in 2022.

“Checkout-free stores will continue to expand internationally [this year], and major retailers that fail to monitor this trend will find themselves falling behind.”

Non-food specialist stores

“While food and grocery retail will continue to lead the checkout-free trend, as this kind of tech lends itself well to the sector, leading mall operators such as Majid Al Futtaim will begin to experiment with the tech in non-food specialist stores.

“Leaders in apparel, health and beauty, home, and electronics retail will be closely watching the success of checkout-free food and grocery stores.”

An opportunity to compete with Amazon

“As checkout-free stores proliferate, consumers will follow, as evidenced by their fast adoption in the APAC region.

“Although, according to GlobalData’s latest UK Consumer Views Survey, 55.7% of consumers are unwilling to use a checkout-free grocery store. The greatest concern for respondents was the need to download an app and register payment details.

“Retailers looking to win over more consumers will need to select in-store tech providers that can deliver a convenient, frictionless experience to reassure customers.

“The use of ‘just walk put’ technology in Amazon Go stores – with the option of a unified app, credit card payment options, and biometric entry – will ensure the retail giant continues to dominate; however, other in-store tech providers have an opportunity to compete with a lower-cost offering. This can be achieved either by partnering with a widely integrated payment app platform such as PayPal or by creating a cheaper, more frictionless set-up.”

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