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Why Convenience Isn't Ready for Fully Cashierless Stores

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From Amazon Go to the variety of startups eager to fully automate convenience stores, there is a significant amount of belief that this method of shopping which allows customers to walk-in and walk-out with their purchases will be the way of the future. Much like the lure of fully autonomous vehicles, which was hypothesized that we would all be driving by now, there are a variety of considerations when it comes to going from idea to inception in convenience.

The first consideration is that age-verified items significantly outpace all other categories when it comes to in-store sales. In 2020, cigarette purchases alone were almost six times the amount of the third highest category of energy drinks, and double that of the second highest category which was alcoholic beverages.

2020 Convenience Store Sales by Category in the United States (sales in millions of dollars)

  1. Cigarettes - $56,108
  2. Beer/Ale/Alcoholic Cider - $23,246
  3. Energy Drinks - $9,835

In other words, the top two selling categories require age verification and most likely by a human. Looking at the remainder of the top ten items sold in convenience, it is obvious that age verification becomes a priority if a retailer has a desire to maintain and grow in-store sales.

  1. Carbonated Beverages - $8,630
  2. Smokeless Tobacco - $8,131
  3. Salty Snacks - $5,363
  4. E-Cigarettes - $4,863
  5. Bottled Water - $4,275
  6. Cigars - $3,846
  7. Tea/Coffee - $3,342

To a non-industry insider, the obvious choice might be to further automate age verification with some form of AI. This offers a further problem in that several states do not allow age verification through a computer. Tools such as the use of biometrics may solve for not having a human-in-the-loop so to speak however there are bias, accuracy, and privacy issues that have already resulted in significant lawsuits. We are several years, if not a decade or more, away from having a universal age verification system that is legal in every city, county, and state within the U.S.

The second consideration for fully autonomous checkout is cash. In the convenience store sector, cash still makes up of 26.8% transactions.

Our customer data illustrates that in certain locations that number is closer to 40%. A May 2020, NACS survey found that 14% of gas transactions are still cash based.

Although Covid did provide a catalyst for a drop in cash transactions, municipalities such as San Francisco have fought against cashless stores citing that they provide bias against low income and homeless people.

It is highly unlikely that convenience stores will easily give up selling 50% of the products that produce the greatest revenue or ostracize a quarter of their customers who purchase with cash in-store. When it comes to fully cashierless stores, implementation is anything but convenient.

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