There’s been a lot of buzz surrounding Amazon Go ever since the first checkout-free store opened its doors in Seattle in 2016. Now that the retail giant is planning to roll-out the concept internationally, including here in the UK, many people are asking if payments as we know them in this country are set to change forever.
There are many interesting aspects of the model: the ability to completely avoid queues, the unique sensation of walking out of a store “without paying,” and the sophisticated technology that calculates your transactions invisibly, as if by magic. But is this really the future we are headed towards?
While it captivates us as the “store of tomorrow,” Amazon Go is not without its challenges. For one thing, the technology alone in an Amazon Go store is reported to cost $1 million. The concept is certainly visionary but the array of cameras, sensors, machine tracking and other systems involved simply cost too much to be economically feasible for many merchants.
Despite this, the model has disrupted the status quo, and new shopping experiences are proliferating—the future of instore shopping is a lot closer than we may think.
Retail’s high-tech payment alternatives
Innovation isn’t new to retail—17 years ago, Waitrose pioneered the self-checkout concept to wide success. But when innovation disrupts the market, even if not adopted wholesale, it can be a boon for small step evolutions in our everyday experiences. In fact, many retailers are already deploying new shopping experiences that would have been unimaginable even 10 years ago.
Just look at the flagship Nike store—Nike Town—in Oxford Street, London. The store uses technology to create an immersive, modern and fun atmosphere for shoppers—there’s an in-store basketball court and a VR installation allowing shoppers to try on different models of trainers virtually. The store’s payment technology perfectly matches its modern and interactive environment where customers can scan a QR code via a mobile app alerting staff to start preparing an order and make payments, all through a smartphone.
Gaining speed through Scan & Go Apps
Perhaps the evolutionary stepping stone between self-scan checkouts and just-walk-out technology in Amazon Go stores is already here with Scan & Go apps. These apps allow shoppers to scan and pay for items using their smartphone without ever having to queue up or go through a traditional checkout experience. Sainsbury’s has been testing this technology in several stores and has even gone so far as to completely remove physical checkout lanes in one Central London location. Sainsbury’s shoppers open the company’s app on their smartphone to scan items as they make their way through the store, and then scan a QR code on their way out the door to trigger payment via Apple Pay or Google Pay. These kinds of solutions are seen as more cost efficient to the tech-heavy format of Amazon Go shops. Similarly, one of the US’s largest grocers, Kroger, has begun rolling out a similar shopping experience that they call Scan, Bag, Go.
Tesco has also recently announced the trial of an app allowing customers to scan and pay for their groceries using their smartphone, leaving the store without needing to visit a checkout. While not as seamless as Amazon Go technology these new apps present a similarly liberating experience that frees shoppers from the burden of queues, especially in busy locations or during peak business hours.
However, this Scan & Go shopping experience still presents some hurdles for certain kinds of retail, such as fashion, where RFID tags are used for security, and typically get deactivated by a cashier at the point of sale. But Decathlon has partnered up with a UK start-up to introduce a Scan & Go app in some Dutch stores that can deactivate the RFID chip upon payment allowing customers to exit the store without queuing or setting off alarms.
The future of British payments
The alternatives to Amazon Go are already here—and you may be already using them—but as the technology becomes more affordable, and as consumer demands shape experiences, I expect much more innovation in this space. For example, it wouldn’t be surprising if app-based transactions get enhanced with Augmented Reality, processing shopping lists and directing customers purchase-by-purchase through the aisles in the most efficient manner, where the online and in-store experience is merged.
Biometrics will also play a greater role in payments, with technology like facial recognition replacing app-based identification. We are already seeing finger-print driven technology here in the UK, which allows consumers to assign a different bank card to each of their fingers, transforming their hands into mobile wallets.
Amazon Go may be the concept on everyone’s lips, but retailers looking to compete in this space have developed a range of innovative solutions to marry speed and convenience to their in-store payments, all in a cost-effective way. While there remain regional requirements in terms of privacy and data, Amazon Go has altered our expectations of what could be, and only a few years later, we’re already seeing a whole new world of shopping.
Motie Bring, General Manager for EMEA, Global eCommerce, Merchant Solutions, FIS