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10/23/2020

View From Mars: Why Checkout-Free Tech Is What Consumers Demand

Everything about the retail experience has changed — including when and if we snag a few impulse goodies on the way out. At Mars, we have had our eyes on this shift long before COVID-19 upended “normal” retail interactions, but now the retail world is going through a massive upheaval.

We’re experiencing unprecedented pace of change as physical stores address concerns around the new norm of the pandemic while looking to stay relevant to shoppers by offering unique shopping experiences that build traffic and keep them coming back.

Technology is playing an ever-increasing role in this arms race. Innovation is quickly bringing reality to things there were once limited to the imaginable future. Retailers that offer products, services or experiences that make coming into the store more enjoyable, more convenient or more informative tend to resonate with shoppers.  Convenience shouldn’t be underestimated — that’s typically what retail technology looks to address or enhance.

When it comes to physical stores, technology needs to deliver efficiency and convenience and take some of the burden off retailers. Checkout-free technology, I believe, is going to be a massive disruption for the retail industry. The ability to use AI-powered cameras to track shopper behavior will not only eliminate lines but it will also serve as a platform to automate archaic manual processes and enable us to understand consumer buying at a level we never thought possible.

We’re already starting to see it, too — leading retailers like Circle K are jumping in, working with Standard, which is really leading the way in AI-powered autonomous checkout. In early 2021, Circle K plans to roll out the technology in several of their stores — it’s really going to change the way people shop and even think about shopping. 

The future of retail is digitally connected stores, integrated merchandising, and rethinking store design. The trick is for all of us to stay focused on the shopper; we need to consider the implications that such technology is having on their path to purchase, the in-store journey, and their exposure to products that they may not otherwise have thought to pick up. This all factors into the enhancement of their experience.

Autonomous checkout is a perfect example. We’ve all had an experience where a store is packed and we want or need to get our shopping done. We see the crowds, and the lines deter us. So, what do we do? We either leave, or when we’re done shopping we focus on whether we got into the shortest line or not. That’s why retailers focus so much on the speed of checkout.  However, this is the final chance that a retailer has to make an impression of their brand and experience.

Now, though, customers don’t have to choose. Fill your bag and go — everything moves on your schedule. Or we forget something but don’t want to lose our spot in line. With technology like Standard in place, it’s so much easier to just head back down the aisle, or find that last-minute item, and then walk-out when you’re ready.

But on the flip side, as a manufacturer and an industry expert, it scares me a little bit when thinking about the implications of all the impulse business that will potentially be lost. I see a perfect storm developing similar to the emergence of self-scan terminals. 

Technology needs to deliver efficiency and convenience and take some of the burden off retailers.

Self-scan was a convenient way to enable shoppers to checkout with the added benefit of speed and privacy. Retailers encouraged it because it delivered upon speed, and reduced personnel costs. The challenge was that merchandising was forgotten and conversion levels plummeted. The pain is still experienced today, and stores are now limited to the confines of existing space and equipment. 

With two-thirds of the confection category and other treats & snacks purchases made on impulse, retailers are at risk of losing a top ten category once shoppers begin to skip the line.  We’ll be spending the next 20-25 years trying to retrofit stores to recover lost sales and profit.

But there is a way to boost impulse purchasing while giving customers efficiency and convenience. When you think about the pandemic retail landscape and what comes next — category aside — it all starts with the consumer and shopper. First, we need to understand how this pandemic is impacting their behavior, both in real time today and then moving forward into the future. What is the “new norm?” What behaviors will stick and which will slide back to normal, eventually?

And then we have to think about merchandising in this pandemic landscape. In the world of social distancing checkout lanes, for example, are now extending into the approach area of the store — so maybe now it’s time to change your merchandising strategy if you’re an impulse buy. Or can you leverage that space differently? Can you sell larger packs because people are stocking up more? Or will impulse purchases just look different when autonomous checkout becomes the norm?

Maybe people will pop in and grab a quick-serve meal or dessert on their way home, because they don’t have to wait near other people in lines. That’s where seamless technology like Standard’s offering has additional benefit these days. Not only can shoppers avoid lines, but they can pay in a more contactless manner.

The simplest way to solve challenges like these to encourage greater collaboration between vendors, retailers, and manufacturers. When that happens—when the three sides can work together to combine technology with insight and experience—the entire industry gets better. Too often, manufacturers get left out of that conversation. And when that happens, considerations like impact to sales can go completely overlooked.

Again, it’s about understanding the people, portfolio and processes they're following—and each piece of the retail puzzle plays a part.  Retailers need to understand the shopper and their customer journeys, then translate that into opportunities or threats for the retailer.

You also need to have relationships — retailer to manufacturer to vendor and to shoppers. When you have strong relationships there’s naturally a greater willingness to try and explore, whether it’s a new product or new technology or new merchandising strategy.

At the end of the day, no matter your role in this industry, we’re all looking to achieve the same thing — that’s important to remember. We’re all looking to find that win-win-win so the retailers, manufacturer and shopper can all win. Done right, technology like autonomous checkout can really play an important role.

Vince Hummel is global category leadership director for new transaction points at Mars Confectionery.