Technological competition intensifies at checkout

0

Supermarkets are increasingly becoming testing grounds for some of the latest technologies. Many of us are used to self-service checkout machines where you can scan, pack and pay for your items without the help of a cashier.

At Walmart subsidiary Sam’s Club, customers can now use an app to scan and pay for items in the grocery aisle. Last month, Walmart sued BJ’s Wholesale Club alleging that the company infringed patents for this app-based technology in the aisle of Sam’s Club (it’s called Scan & Go).

As payment technology becomes more advanced, it becomes more competitive. That’s our focus for this week’s QA, where we take a closer look at a big tech story.

Don Apgar, Director of Business Practice at Mercator Advisory Group, joins us to discuss the rules of the game. The following is an edited transcript of our conversation.

Don Apgar: There are a number of third-party companies that make software specifically for retailers, restaurants, and grocery stores. And there are also companies with a lot of resources, you know, the Walmarts of the world, if you will, that have the resources to do their own software in-house.

Kimberly Adams: Walmart’s system allows you to scan items yourself as you drop them into the cart. Could it use a system like Amazon’s, where you literally walk out of the store with your stuff?

Hagar: What [Amazon has] thing with Just Walk Out is that they use a huge number of cameras and sensors to monitor every movement that happens, in every aspect of the store. The challenge is that there are so many cameras and sensors involved in monitoring activity in the store to determine who is buying what, that it becomes prohibitively expensive to scale this into a Walmart-sized store. , for example.

Don Apgar (Courtesy of Apgar)

Adam: How do they make sure people don’t slip something extra into the cart or walk out with something the sensors didn’t pick up?

Hagar: Well, that’s the biggest challenge. And that’s one of – aside from the cost – one of the biggest barriers to the widespread adoption of this technology. We just reported on this in the UK, and retailers have seen a 125% increase in inventory reduction – or theft, if you will – by just implementing self-scan at the box. And so everything is a balance. Providing a better customer experience and building a better customer relationship is worth something, right? And so, an increase in theft and loss is part of what it costs, in addition to the technology.

Adam: What do you see in the future in terms of these tech legal battles?

Hagar: There are always legal fights in technology. In the recent dispute between Walmart and BJ’s Wholesale, Walmart claims they came up with the idea, they patented the idea, and BJ clearly infringed it. Patents only protect unique ideas for a certain period of time. And then, once the patent expires, the technology or the idea is generally available. Like automatic transmissions in cars, we’ll see the technology become widely adopted over time.

Adam: What do you think we can expect in the future when it comes to in-store shopping experience and automation?

Hagar: As consumers, we continue to seek frictionless and convenient shopping experiences. One of the things our research revealed post-pandemic is that price is still an important consideration when shopping, but the stores that have held up well during the pandemic are those that have delivered the customer experience that customers wanted, in terms of contactless and ease of access. to treat [payments].

Related Links: More from Kimberly Adams

Amazon did not directly respond to questions about “low inventory”. If you want to know more about its cashier-less technology, Just Walk Out, the company told us its frequently asked questions page.

Also, if you’re curious about Walmart’s lawsuit against BJ’s Wholesale Club, here’s a link to CNBC coveragewhich includes details from court filings (in which Walmart claims the innovations were “simply taken without permission”).

Finally, here is a link to some reports from Grocery Dive showcasing both existing payment technology and technology being developed, such as a “computer vision system”, which is basically a box of sorts that you can put multiple items in at once to scan them to pass to checkout, or a smart shopping cart that matches your bill as you place items in it.

By the way, the company that makes this cart was acquired last year by Instacart.

Share.

Comments are closed.