16 Mar - Cashierless Stores: The Next Big Thing or a Passing Fad? What Amazon Go’s 8-Store Closure Tells Us
Are cashierless stores dying out before they've ever truly gotten their day in the sun? Short answer: Absolutely not.
Approximately 67% of U.S. adults that have used cashierless checkout are interested in continuing to use the technology in the future. Which is why the recent news that Amazon is closing eight of their cashierless grocery stores, commonly known as Amazon Go, is surprising. On April 1st, two Amazon Go locations in Seattle, two in New York City, and four in San Francisco will shut their doors permanently. But why? Amazon Go’s store closings en masse begs the question, are cashierless stores dying out before they've ever truly gotten their day in the sun?
The short answer: Absolutely not.
What Went Wrong with Amazon's Cashierless Stores?
Amazon's closing of physical retail stores was nuanced and circumvented around the need to cut costs due to the ramifications of the pandemic and today’s impending recession. Local issues also played a significant factor in these store closures. For instance, increasing crime rates and abundant drug use made foot traffic to these areas scarce.
Yet, Amazon still has plans to expand their cashierless stores in more optimal locations with better features. An Amazon spokesperson said, "We remain committed to the Amazon Go format, operate more than 20 Amazon Go stores across the U.S., and will continue to learn which locations and features resonate most with customers as we keep evolving our Amazon Go stores."
According to Insider, “...critics say that Amazon has made the mistake of focusing too much on the tech in stores rather than the retail experience itself.” Today’s shoppers want a seamless, convenient, and personalized shopping experience. So, what can we learn from Amazon Go’s store closures? What were these stores missing? In this article, we’re diving into the must-have features and capabilities of successful cashierless stores.
Successful Cashierless Stores Have...
1. 100% Camera-Only Computer Vision
Cashierless stores often use sensors to track shoppers’ purchases. However, these sensors can be costly and cumbersome to implement. Computer vision with 100% camera-only tracking enables greater flexibility and lower overhead costs.
Plus, today’s shoppers are hyper-aware of their right to privacy (as they should be!). Camera-only computer vision uses keypoint tracking technology that creates a unique, 100% anonymous individual.
Here’s how it works:
- The cameras begin tracking shoppers anonymously (no biometrics are recorded) as they enter the store.
- Product and shopper tracking cameras identify items customers interact with.
- As the shopper leaves the store with their items, AI-powered frictionless checkout allows shoppers to purchase items without having to wait in line or stop to pay.
Discover the shopper’s journey with AiFi’s computer vision technology.
2. A Convenient Location
Ultimately, the success of any cashierless store closely depends upon its location. And that goes beyond the city the store is located in. Many successful cashierless stores are located within high-traffic and busy areas, such as:
- Sports and events stadiums and arenas
- College and university campuses
- Travel rest stops, airports, train stations, etc.
- Office buildings, hospitals, and hotels
Check out AiFi’s store locations across a multitude of verticals and the globe.
3. Flexible Entry Systems
The right cashierless solution will equip your store with the hardware and software necessary to create a seamless and easy shopping experience, starting at the point of entry. Worthwhile entry systems include:
- Turnstiles for gated entry
- Free standing kiosks for open or hybrid entry
The associated software should provide store owners with customizable entry options, such as:
- A branded or white labeled app
- Credit card access
- A combination of an app and a card
Explore all of AiFi’s store entry options.
4. A Smart Operating System & Analytics
While cashierless stores limit the labor necessary to run the store, aspects of retail such as inventory management and planogram planning still require some human intervention. It’s important that the cashierless operating system you implement provides you with maximum control and efficiency.
To start, effective cashierless store operating systems enable staff to quickly manage and audit products, inventory, planograms, order details, and customer receipts. But more importantly, victorious cashierless stores rely on store and customer analytics to track baseline store analytics, including:
- Sales performance
- Shopper conversion rate
- Transaction time
Shopper behavior heatmaps denoting:
- Dwell time
- Shelf location interactions
And product conversions depicting:
- Product awareness
- Product consideration
- Cart conversion/abandonment
Each of these insights allows store managers to optimize planogram layouts to get more products in front of customers based on foot traffic and encourage larger sales.
Learn more about AiFi’s efficient operation system and insights.
AiFi’s Key Differentiators
AiFi is the largest AI platform empowering retailers to scale autonomous shopping solutions with 100% computer vision. With over 100 autonomous stores worldwide, and 18+ global retailer partners, AiFi’s solutions support any store format, anywhere.
Designed with flexibility at the forefront, our technology empowers retailers with the tools they need to scale their businesses. Below, we’ve listed just a few of our customers, their verticals, locations, and associated AiFi Solution, respectively:
- Miami Dolphins (Sports & Events / Miami, FL / AiFi To-Go)
- Aldi (Grocery / London, UK / AiFi Build)
- Loop Neighborhood Market (Convenience / Campbell, CA / AiFi To-Go)
- University of Denver (Universities / Denver, CO / AiFi Refresh)
Additionally, to ensure our customers receive efficient connectivity throughout their stores and systems, we use the most powerful infrastructures and only certified, high-quality equipment. We partner with leading technology providers including:
- Microsoft Azure as our cloud service provider to create flexibility and infrastructure optimization for stores
- Verizon’s 5G network to power NanoStore deployments
Final Thoughts
It’s unfortunate that Amazon was forced to shut down eight of its Amazon Go locations. But this is not a sign that cashierless stores are failing. In reality, cashierless stores require the right technology, design, and implementation to succeed. AiFi can help you implement the proper technologies and systems to retrofit your current store or build a brand-new autonomous store, customized to match your business and your customers’ needs.
Learn more about AiFi—book your demo to see the software in action.
