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How Cashierless Stores Can Solve Labor Challenges and Create New Levels of Customer Convenience

Courtesy of AiFi

Cashierless stores, also known as autonomous stores, are sprouting up in a range of venues, from airports to college campuses to sports stadiums. But the technology is still far from the mainstream — meaning there’s still plenty of “runway” for interested retailers. However, cashierless store success depends on having (or attracting) a customer base that values the convenience they offer and isn’t intimidated by the technology.

Some of the key benefits and strategies around autonomous retail include:

  • Creating jobs that appeal to workers: Part of the current labor crunch is the lack of people interested in working traditional associate jobs, and while autonomous stores still require staff, they can offer opportunities more in line with what today’s workers are looking for;
  • Bringing convenience directly to shoppers: A key advantage of the cashierless concept is that stores can be built smaller and closer to the end customer, such as on a college campus or in an apartment building, to offer convenience that even home delivery has difficulty competing with; and
  • Approaching the right demographic: While cashierless stores hold a lot of potential, they’re not the right fit for every retailer — stores reaching younger demographics or located in spaces with unique challenges currently offer the most promise.

Autonomous Stores Can Align with Worker Preferences

Cashierless stores aren’t necessarily about removing jobs but reorganizing them and making more efficient use of labor. This can help retailers overcome one of the more challenging elements of the current labor crunch: the fact that people are now less interested in traditional associate positions. Autonomous stores aren’t fully labor-free — in some cases they can require more workers in certain backend roles to ensure everything runs smoothly — but by rearranging the positions to be filled they can make hiring easier.

“When you look at the reality of the labor markets, a lot of people don’t want these types of jobs,” said John Douang, Co-Founder and CEO of Aisle 24 in an interview with Retail TouchPoints. “There are lots of vacancies for these types of jobs, but people aren’t filling them. It’s not a matter of not having people. In the history of every society there have always been adaptations and changes to the labor market. Jobs that existed for decades all of a sudden are gone and new jobs are created because technology is taking over.”

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The remaining in-store positions also become more appealing, according to Alex Sophocleous, VP of Growth and Partnerships at AiFi, which powers 62 autonomous stores worldwide. Associates don’t have to run from stocking shelves to staffing registers during an unexpected rush, leading to more orderly shifts. Additionally, some retailers can find unique benefits — for instance, those with an emphasis on local products can devote more associate hours to teaching customers about their products.

“We have a great partner that we worked really closely with in Denver, Choice Market,” said Sophocleous. “What makes them unique is the local products that they have inside the store — products you haven’t seen before. That raises questions. The staff members are all from Denver, so they love talking about these local products, and this gives them an opportunity to go and just share their stories with the customer. It allows the staff members to have more interaction with customers and talk about some of the products they are passionate about.”

Locations where customer service is less important, like more traditional c-stores, also can benefit from more specialized positions. Even a truly autonomous store needs stockers to keep shelves full, but if customers can shop without assistance, they don’t need to be staffed 24/7 even if the store itself is open through the night.

“We had a hypothesis that that we would need to have an attendant to help people and guide them,” said Kevin Rettle, Global VP of Product Development and Digital Innovation at Sodexo in an interview with Retail TouchPoints. “The reality is that we have an attendant there that’s handling stocking but very little that has to do with true customer support. That means that you can get away with a 24/7 solution that doesn’t require on-site or in-person support in those overnight hours.”

Autonomous Stores Can Bring Retail Even Closer to Customers

Convenience can be about even more than an easy checkout experience or convenient hours — it can be about proximity as well. Polish convenience retailer Żabka has partnered with AiFi to open more than two dozen autonomous Żabka Nano stores in six cities. These shops each have a tailored selection of 450 to 1,500 products, and Żabka wants to make the experience even more personal by bringing the stores directly into apartment complexes.

“About 80% of the population has a Żabka store within 400 meters,” said Sophocleous. “They’re like the Starbucks of Poland, and they want to get even closer. They want to get into apartment buildings. The struggle there is that the store is going to be small, and the revenue that that store will generate won’t cover the overhead costs of being able to staff it, and then it can only be open limited hours.“

Those problems can be addressed by using autonomous technology to reduce staffing and expand operating hours. They can reduce food waste as well — Sophocleous noted that putting a store in your lobby means you can grab perishable staples, such as parsley, as needed rather than buy large amounts that you may not need. AiFi is exploring the possibility of opening markets like this at high-rise buildings in major cities like New York and Chicago.

Sodexo’s own cashierless store experience is through its two eat>NOW shops, which it opened in partnership with AiFi at the University of Denver in April 2022. The locations have been a major success, with basket sizes approximately 20% larger than its usual on-campus stores and significantly decreased shrink. The key to their success may be demographics — college students are primed for the cashierless experience due to their comfort with technology.

It has a lot to do with the acceptance of the digital wallet,” said Rettle. “My oldest is 21 and my youngest is 18, so they’re right in this demographic. They don’t carry cash. They don’t carry plastic. They use their phone for everything.”

Aisle 24 is now in the process of opening 60 franchises across Canada, but the autonomous retailer got its start with a small number of stores on college campuses. Douang noted that college life is particularly suited to an always-open autonomous store. Traffic at these locations peaks from about 6 p.m. to 3 a.m., when an unmanned store provides options students can’t find elsewhere.

“Students don’t have a standard schedule,” said Douang. “They’re not in class nine to five and in a lot of cases they’re studying very late. The nightlife is very active in the student space, and they don’t always have convenient access to things. One thing that we learned from our own experiences was the only option you had after 10 p.m. was pizza. It gets very boring, so there was a need for change.”

Target Receptive Customer Groups Until Cashierless Stores Become Mainstream

While cashierless stores hold promise, they haven’t truly hit the mainstream yet. They are particularly suited for spaces where a traditional store can’t thrive, like residential buildings too small for a fully stocked and staffed shop, or where frictionless checkout can solve a major challenge — like airport stores where dozens of hungry passengers can all grab a quick sandwich on the way to their gate or hotel without waiting in line.

Retailers interested in testing out the technology in more traditional settings need to be aware of who will actually use the technology. These stores typically utilize computer vision to keep track of goods rather than traditional checkout methods, so they may not appeal to older shoppers seeking familiarity. This is part of why colleges are a common location for cashierless stores, though other youth-focused venues could also prove promising.

“There’s always going to be a segment of the population who aren’t ready yet to accept this type of experience, and it takes some time,” said Aisle 24’s Douang. “I think for all the retailers out there who are exploring these types of options, you need to understand your customers and customer base first and foremost. The older generations may not be ready to accept this type of an experience. If you’re targeting that population, you have to be a bit more careful with what you’re doing.”

However, Rettle said that he expects the technology to become more ubiquitous as more large retailers adopt it and it becomes more commonplace overall. Until then, autonomous stores are letting retailers thrive in new spaces and appeal to tech-savvy, convenience-hungry shoppers.

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