As retailers across the world come to terms with radical changes in the way consumers are able to shop, 7-Eleven is betting the next step in convenience is eliminating queues.
Australia’s largest convenience retailer is making a move on checkout-free, launching a “cashless and cardless” concept store in Richmond, Melbourne today.
The store will allow customers to pair their cards with a smartphone app, scan items with their cameras, and then walk out.
It’s a similar system to the one trialled by Woolworths in Sydney last year and follows the success of Amazon’s no-checkout grocery stores in the US.
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7-Eleven chief executive Angus McKay said he’s on a mission to push the envelope on convenience retailing.
“We’re trying to push the notion of ‘convenience’ to its absolute limit,” McKay said in a statement circulated on Wednesday morning.
“In the new concept store, customers will notice the absence of a counter. The store feels more spacious and customers avoid being funnelled to a checkout location creating a frictionless in-store experience,” he said.
The announcement follows a trial run out of an Exhibition Street store in Melbourne, although 7-Eleven hasn’t detailed plans for any further expansion of the concept as yet.
Is this the future of retail?
There’s growing consensus among retail experts that, at least inconvenience and grocery retail, checkouts are on the way out.
There’s growing consensus among experts that, at least in convenience and grocery retail, checkouts are on the way out.
Retail consultant and chief executive of Retail Doctor Group Brian Walker believes it’s a matter of when, not if.
“All grocery and commodity style retail will head down this path,” Walker tells SmartCompany.
Walker says retailers won’t be able to resist the opportunity to lower labour costs and access better customer data by automating their stores, but he doesn’t think everyone will adopt the technology.
“[Checkout free] really applies to this commoditised low-touch, low-relationship type of retail.
“It’s less attractive for products that require much more human touch,” he says, noting fashion, household goods and appliances as examples.
“We’re seeing a growing divide between shopping and buying.”
Having launched its first checkout-free concept back in 2016, Amazon is ahead of the curve in implementing the technology and has been quietly expanding its network of Go stores throughout the United States in recent years.
Most recently, the company launched its fourth such store in San Francisco, bringing the total number of Go stores to 13.
The company has gone through some learning hurdles though, opting to make later iterations of the model smaller and even bringing back cash transactions in New York.
Expect retailers to change within two years
Queensland University of Technology associate professor Gary Mortimer expects check-out free to become increasingly popular with Australian retailers over the next 18-24 months.
“I would expect Woolworths to be on the front foot ahead of Coles in implementing this technology, certainly into their metro-based stores,” he tells SmartCompany.
“With 7-Eleven coming out we will also see Metcash looking at this technology.”
However, Mortimer says Australian retailers are likely to introduce the technology as an added service, rather than just outright replacing checkouts across the board.
“You will have a staffed checkout, plus a self-service checkout, and then a third option which will just be scan and walk out,” he says.
What does all this mean for independent and medium-sized retailers? Barriers to entry for adopting check-out free technology remain high for the moment, with setup costs involving app creation and changing in-store processes.
But it’s not impossible. The Party People trialled scan-and-go technology in its own business last year and costs are expected to come down significantly as interest grows.
Although retailers would be wise to consider the in-store theft implications of letting customers serve themselves, Mortimer warns.
“Retailers will have someone at the front door as a greeter who randomly checks bags,” Mortimer says.