TLDR: We predict Walmart acquiring a cashier-less tech startup like Grabango.
Cashierless forced into mainstream
Customers may not enjoy self-checkout so much. Researchers found that more than 60% of shoppers who use self-checkout don’t use a shopping cart or basket, and they don’t buy fruits and vegetables. This suggests customers perceive cashiers as more efficient when it comes to buying a lot of items, or when we have fruits and veggies that are complicated to identify and weigh. Customers simply want the fastest way out, and that’s not always self-checkout.
“Unrecognized item in the bagging area.”
“Please wait for a store associate.”
“ID check required…”
Self-checkout machines are also some of the least functional machines many of us have used. In one survey comparing ATM machines, gas station pumps, and airport check-in kiosks, self-checkout machines were overwhelmingly rated as the most troublesome to use.Over 43% of respondents disliked their frustrating design. Ikea, Albertsons, and CVS have actually removed self-checkout kiosks in a bid to improve customer experience.
Walmart should take note. It’s been observed that customers blame the retailer when they face problems, not the machine’s manufacturer. Especially when we’re waiting for help from an associate that’s nowhere to be seen. The supposedly quicker experience suddenly becomes the most frustrating as customers feel cheated out of their expectation – it’s not as fast and the service seems incompetent. Not much different than going to the post office! But unlike the post office, we have choices on where to buy bananas.
Amazon, on the other hand, keeps investing in its “Just Walk Out” technology. We continue to believe this will be an edge post-COVID. New job postings as a proxy to investments into “Amazon Go” are relatively stable lately, but still down -43% in July compared to March.
Diving into specific areas of investment in cashierless, Amazon appears to be steadily investing in technology, while slowing down investments at stores. Major areas of decline in new job postings related to Amazon Go are in non-tech jobs: HR, Customer Service, and Project/Product/Program Management. On the other hand, Software/Hardware Developers and Solutions Architects are still sought after.
New Amazon Go Job Postings by Job Category: July vs. March 2020
|Job Category||2020-03||2020-07||% change|
|Buying, Planning, & Instock Management||8||4||-50%|
|Operations, IT, & Support Engineering||6||1||-83%|
|Marketing & PR||5||1||-80%|
It might be a while before “Amazon Go” stores ramp up staffing again. The need to serve impatient and now COVID-conscious workers at lunch time remains slim until downtown offices reopen. But the likelihood of its technology being implemented at strategic Whole Foods and other grocery store locations remains in our opinion quite high.
Prediction: Walmart acquires ______ cashierless tech startup
Walmart may never subscribe to Amazon’s cashierless tech considering how much data they’d lose to their rival. They last refused to even consider an open source version of it. However, we strongly believe Walmart is still exploring ways to implement cashierless tech.
The safe way would be to sign up to a tech giant’s solution once mature. Perhaps when Microsoft finishes beta testing with Kroger. Yet that would still imply sharing valuable customer shopping data with a cloud provider that also works with other rivals. Microsoft’s solutions architects would then in concept be able to share their “secrets” with others.
We believe there’s a high chance Walmart acquires one of the many tech startups trying to develop cashierless for traditional businesses. Grabango is particularly interesting as shoppers can still pay using credit cards or cash at checkout, avoiding the need to scan items. This removes the need to setup an account with the retailer and opens the door for all Walmart shoppers to benefit from cashierless checkout.