In the future, consumers won’t have to stop to check out at stores. There are two types of stores featuring autonomous checkout technology that will make this possible:
Fully autonomous checkout stores. This type of shopping experience — employed at some stores like Amazon Go — begins with consumers identifying themselves upon entrance to a store with a QR code, credit card, or other option that includes payment information. As consumers shop, the store’s technology tracks the items they pick up, creates a virtual cart, charges the consumer accordingly for their items when they exit, and sends them a receipt immediately or soon thereafter.
Hybrid autonomous checkout stores. In hybrid stores, consumers can take part in the fully autonomous experience detailed above or stop at a kiosk to pay before exiting instead of identifying themselves at the entrance. Either way, they won’t need to scan their items because the store will still track their selections.
Payments companies—including card networks, processors, and POS providers — need to determine their role in the payment process of autonomous checkout stores early. Stores with autonomous checkout can eliminate or de-emphasize POS terminals because consumers will be able to bypass them to some degree. And, because the payment process will no longer require consumers to stop at a register and choose which method to pay with, card networks will need to work to ensure that their card is the one being uploaded to consumers’ identifying accounts and automatically charged. As autonomous checkout is deployed at more stores and in different segments, it will amass a share of retail payments that payments companies need to pay attention to, making it essential for firms to determine their role in this new environment early.
Autonomous checkout is set to gain a wider scale of adoption from retailers over the next five years. We project that the number of autonomous checkout stores globally will multiply at an almost 75% compound annual growth rate (CAGR) for the six-year period from the end of 2018 through 2024, rising from a low base of 350 locations to approximately 10,000. The technology will first become prevalent in small convenience store formats, but over time it’ll reach larger drug stores and eventually grocery stores. And while 10,000 stores is [...]