How Amazon and Target are shaking up frictionless checkout

A recent decision by Amazon has changed the landscape for cashierless checkout.

In a major readjustment of its strategy for its "Just Walk Out" frictionless, cashierless shopping technology, Amazon recently said it will remove the automated solution from its high-tech Amazon Fresh grocery stores.

Just Walk Out technology leverages a combination of computer vision, sensor fusion and deep learning that enables shoppers to shop the store, pick out they want and skip the checkout when they’re done. 

Customers are prompted at the store’s entry gates to choose if they want to use Just Walk Out shopping or the traditional checkout lanes, and have several options (such as a QR code or Amazon One palm scan). Competing cashierless solutions from other providers operate similarly.

So what’s in store for frictionless checkout? Predicting the future is always a dicey proposition, especially when next-gen technology is involved, but here are some thoughts on where Just Walk Out, self-checkout terminals, and automated “smart carts” may be heading.

Just Walk Out

To be clear, Amazon is not retiring Just Walk Out, which it also uses in its Amazon Go frictionless convenience stores and provides to many other retailers on a licensed basis. And as mentioned, many other retailers and solution providers have their own “grab and go” store platforms.

However, the consensus seems to be that the cost and complexity of setting up and operating this type of frictionless checkout environment in a setting as large and varied as a grocery store is simply too high to make it a workable business model.

Amazon has publicly said that in at least some cases, customer purchases are confirmed by employees in India who manually review store video of customers making their selections and compare it to what they paid for, although according to Amazon in most cases the generative AI-based store system authenticates transactions on its own.

The "grab and go" model is unlikely to disappear. However, at least for the foreseeable future, expect to see it mainly confined to convenience stores, airport travel stores, concessions stores at stadiums and arenas, and other environments where consumers in a hurry typically purchase a few small goods from a limited selection of SKUs in a small space.

Self-checkout terminals

At least two major retailers have also recently cut back on how they use self-checkout terminals, which have been getting some general customer negative feedback for being slow and awkward to use and have been linked to heightened shrink risks by some experts.

Target recently restricted self-checkout to customers buying less than 10 items at most stores (with some flexibility given managers) following an express self-checkout pilot with limits of 10 items or fewer that found it to be twice as fast. 

Walmart is also adjusting how it uses self-checkout terminals at some stores, with those locations possibly starting or ending the day only offering staffed checkout. As Target and Walmart frequently set industry trends, expect other retailers to follow suit.

Data from the first NCR Voyix Digital Commerce Index indicates that younger consumers are more likely to prefer self-checkout, suggesting that youth-oriented retailers may get the most benefit from the technology.

Smart carts

Smart shopping carts equipped with technology like camera vision and  sensors that let customers simply identify themselves, shop the store, and automatically pay for whatever items are in their cart when they leave, factor heavily into the plans of at least two retail tech giants.

Amazon will deploy its Dash Cart smart shopping cart device at Amazon Fresh stores. First announced in July 2020 and officially launched in September 2020 with a reboot in 2022, the Dash Cart operates on a technology infrastructure similar to “Just Walk Out.” 

Amazon said the Dash Cart provides shoppers the benefit of skipping the checkout line, along with the abilities to easily find nearby products and deals, view their receipt as they shop, and know how much money they saved while shopping throughout the store.

In addition, in a recent blog post, Instacart VP and GM of Connected Stores David McIntosh said the company’s Caper Cart smart cart solution is getting enthusiastic customer response and will have thousands of units deployed across the U.S. by year’s end.

McIntosh cited specific benefits including gamified experiences (such as a gamified coupon wheel), real-time personalized recommendations and offers, and targeted in-store advertising from CPG partners.

The shopping cart has come a long way from squeaky wheels and poor navigational capabilities. Could it be the frictionless checkout form factor retailers and customers have been waiting for?