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Is touchless checkout the next frontier for food retailers?

Food retailers have been adopting technology tools to ramp up operations and create a seamless shopping experience for years, but never has this been more important than during the coronavirus pandemic. Shoppers are increasingly looking for tech-enabled solutions to make their lives easier while also keeping themselves safe.

In fact, the most recent Omnichannel Grocery Report from PYMNTS found that more than one-third of shoppers would switch to a grocer that offers touchless payment technology such as QR codes, digital wallets or cards on file. An even higher number of consumers who have already tried the technology in-store -- 40.6% -- would consider a change. Additionally, Juniper Research expects smart checkout technology to be a $387 billion business by 2025.

Touchless payment has been a key focus for retailers large and small for this reason -- and many others. From Amazon’s Just Walk Out cashierless technology to touchless checkout at major retailers as well as independent stores, technology at the register appears to be the next big move for grocers.

Making checkout simpler

In the realm of touchless checkout at the register, technology such as digital wallets, mobile banking apps, QR codes and other forms of payment are being adopted en masse. Albertsons, for example, unveiled the Albertsons Pay program across its banners in October, which allows customers to pay through their bank or a stored-value account via a QR code generated in the grocer’s loyalty app.

Similarly, Kroger’s QFC banner rolled out a contactless payment pilot in August that utilizes near-field communication technology to accept payment from through Google, Samsung, Apple, Fitbit, contactless chip cards and mobile banking apps.

"Kroger continues to invest in innovative technologies that advance the customer experience, including our payment systems," explained Kroger’s payments director Kathy Hanna in a press statement. "Providing our customers with flexibility – whether that means having the option to choose between shopping in-store or online for groceries or how you pay for them – we are committed to personalizing their shopping trip."

Scan-and-go technology has also been cropping up at supermarkets in recent years, and while its future is still uncertain, it has seen renewed interest due to the pandemic. Sam’s Club introduced the technology in its stores in 2016 but is touting it as a safe alternative to traditional shopping, and Walmart recently added mobile scan-and-go capabilities for its Walmart+ members. Kroger made changes to its Scan, Bag, Go program after the pandemic took hold and now allows customers to scan items on their own phones, and Wegmans accelerated the deployment of its SCAN app to additional stores.

Associated Wholesale Grocers partnered with FutureProof Retail to roll out similar technology to its member stores last May. “FutureProof Retail’s Self-Scanning Solution helps our members compete favorably in all markets served because it allows independent supermarkets to eliminate wait times at checkout and service counters, and it also enables social distancing in stores,” said AWG’s Stacy Bowen in a press release.

Taking technology a step further

Beyond today’s touchless experience at the register lies technology that allows shoppers to gather their groceries and walk out of the store without ever physically checking out. Underpinned by smart shelves, machine learning, a bevy of cameras and more, this type of tech is growing at a fast clip thanks to startups and more established companies alike.

Amazon Go’s Just Walk Out system has proven to be a precursor for other grocers looking to provide this seamless in-and-out shopping experience. Technology companies are beginning to see a deluge of funding to help get it further off the ground while also learning how to retrofit existing stores and overcome hurdles to deploying the tech within larger stores.

Startup company Shopic closed a $7.6 million funding round last year to help bring its frictionless technology infrastructure to medium and large grocers, and Israel-based Trigo recently raised $60 million with the help of Red Dot Capital Partners and Tesco. 

Tesco has begun a pilot touchless checkout program with Trigo at one of its convenience stores in London, while Giant Eagle has partnered with Grabango to bring similar technology to its own convenience stores. The grocer kicked off the technology at one of its GetGo Cafe+Market locations near Pittsburgh and anticipates expanding the availability in the future.

Giant Eagle CEO Laura Karet told CNBC that the pandemic put a new slant on using the technology. “What people want is to get in and out fast,” Karet said. “It’s all about speed. And pre-Covid, we constantly challenged ourselves to say ‘How can we get people in and out of the stores more efficiently?’”

Amazon itself has taken another swing at touchless tech with the Dash Cart, which is currently deployed at its Go Grocery stores and uses computer vision algorithms and sensor fusion to figure out which products a customer is buying. A QR code in the Amazon app allows customers to access the cart and sensors within a designated lane identify it at checkout and process payment.

Looking to the future

Regardless of where grocers end up with their touchless checkout strategy, adoption of the technology is quickly becoming a necessity. With autonomous checkout provider Standard Cognition finding in November that 31% of shoppers would be more likely to shop at retailers that offered checkout-free technology and 22% would prefer retailers with touchless payment options, making a move sooner than later is prudent.

“The good news is that in-store shopping isn’t going away,” said Jordan Fisher, CEO of Standard Cognition. “But there is a large proportion of consumers who are wary of shopping in stores right now. As this study reveals, retailers that are able to provide checkout-free experiences and other touchless technologies are going to be better equipped to draw customers into stores going forward.”
 

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