Blog

Dec 10, 2023

The future of retail is coming. It won’t have cashiers.

More retailers are experimenting with self-checkout options,

More retailers are experimenting with self-checkout options, including apps that allow for customers to scan and pay for items with their phones.

Walk into a boutique for Weekday, the H&M Group's streetwear brand in Copenhagen and you’ll notice shoppers aren't lining up at a check-out counter to make their purchases. Instead, they’re scanning tags on the items with an app on their phones, stopping by the exits to leave hangers and security tags, and walking out.

Cashierless checkout is looking like the future of retail. The trend is moving beyond Amazon Go grocery shopping, the e-commerce giant's brick-and-mortar locations where shoppers can simply pay using their Amazon accounts as they leave the store.Just this week, Apple announced it's allowing retailers to use an iPhone to accept contactless payments. The move is part of a new mobile payment feature called "Tap to Pay on iPhone," via Apple Pay, or contactless debit and credit cards, with no terminal or additional hardware needed. This is a game-changer for retailers which can now allow customers to buy products in stores with a "tap to pay" feature starting later this year.---

---"We’re making it easier than ever for businesses of all sizes — from solopreneurs to large retailers — to seamlessly accept contactless payments and continue to grow their business," said Jennifer Bailey, Apple's vice president of Apple Pay and Apple Wallet, in a statement.Self-checkout systems are clearly in demand among retailers. The global self-checkout system market was estimated at $3.1 billion in 2020, according to ResearchandMarkets.com. It is expected to nearly double to $5.9 billion by 2026. Although self-checkout can still seem like a novelty (or an annoyance to some customers), industry insiders expect that it will eventually become the norm.The Forrester analyst group forecasts that contactless checkouts are bound to see growth in 2022. Over half of U.S. retailers offer contactless payments in-store, while 57% of American adults who used contactless payments initially during the pandemic expect to continue using it. "Self-checkout is an area that has a clear [return on investment], and combined with a greater customer experience, it makes for an interesting choice to investigate and invest in," said Morten Mogelmose, the CEO and co-founder of Zliide, which provides the cashierless checkout for H&M's Weekday.

Expanding self-checkout beyond grocery stores and pharmacies does require some specialty. Zliide works mainly with fashion retailers, which usually impose a high level of security to prevent shoplifting. The company replaces standard security tags on each garment with a "Zliide tag." The tags do double duty, serving a security function, while also being used by customers for scanning and making purchases. The tag unlocks itself after self-checkout via an app and the customer can remove it before leaving the store.Another trend that could fuel wider adoption of self-checkout is consumers’ use of hybrid shopping, by fusing their online shopping habits with in-store experiences. Often customers today research products online before coming into a store or buying them. Sometimes customers buy products online and then come to the store to pick them up.

Self-checkout further marries convenience with technology, ideally making in-store shopping just as quick and convenient as buying a product online.Mogelmose says that there's still room for improvement, however. "When it comes to self-checkout, we will see more solutions with a sharper focus on the speed of deployment and cost for the retailer," he said.

Digital wallets in retailer mobile apps are one way companies are making the experience more frictionless. The challenge now is figuring out what kind of tech is the smartest for retail – is it customers scanning products with their phones? Or letting customers simply walk out and charging them later?---

---All cashierless checkout options require sensor and scanning tech, shelf sensors, cameras and a shopper device with computer vision. Some of the tech vendors helping companies get on board include Smartshelf, Skip, Mishipay, AiFi, and Signpost.Companies like Scandit are working with brands like Levi's, Aldo and Sephora for fast-track seamless, shopping experience, when it comes to self-service checkouts, which are done through mobile devices.FutureProof Retail is another company that is gaining steam in the contactless check out experience. Their tech allows customers to scan products and check out via mobile app, so there's no waiting in lineups (on average, this takes a total of 12 seconds). That's because most of the stores doing this allow customers to scan while they shop.

There is still room to grow, however, when it comes to the seamless tech with cashierless payments. Mogelmose doesn't expect in-store shopping to go away.

"We will still have stores in the future, but it's clear that the role of the store is also changing," he said.