Amazon’s cashless stores won’t be cashless much longer

Cloud cashThe cashierless checkout isn’t exactly new. 

By contrast, the cashierless, cardless, cashless variety of checkout is relatively new.

And it may already be be an endangered species.

For an early example of cashierless checkout, look no further than the noble hot coffee vending machine that once graced every cafeteria. You’d drop a nickel in the coin slot and eagerly watch the machine fill a Styrofoam cup with a steaming brew with a flavor to rival the finest industrial sludge. Sometimes the machine would deposit the cup on its side, and, at no extra charge, coffee would pour everywhere except into the cup. Those were the days.

Today’s hot coffee vending machines have undergone vast technological improvements. For instance, they are programmed to laugh derisively if think you’ll get by with a nickel. 

Nonetheless, cashierless-ness found its way from vending machines to large retail outlets, most notably grocery stores. According to Wikipedia, “As of 2013, there were 191,000 self-checkout units worldwide, and the number was estimated to reach 325,000 units by 2019.” Their success is hardly surprising. Self-checkout lanes appeal to retailers because they don’t need health insurance, don’t take cigarette breaks, and don’t demand overtime pay. As for customers, they appeal to those in a hurry, and to those not eager to face a clerk when purchasing personal items such as—well, never mind. 

Another market for self-checkout is, as Fuzzy’s Taco Shop’s former operations VP Briton Smetzer pointed out to, “… people such as himself that suffer from hearing loss. ‘I do find myself gravitating towards kiosks because I don’t want to deal with the frustration of communication obstacles,’ he said.”

Upping the ante just shy of three years ago, Amazon Go became the first walk-in store that was cashierless and cashless and cardless. Download the Go app, walk into the store, grab what you want, and leave with it. A confederacy of technologies will keep track and ding your account. Perhaps vying for Obvious Trademark of the Year, Amazon named it “Just Walk Out Technology.”

Amazon operates Go stores in Chicago, New York City, San Francisco, and Seattle. If’s informal survey is any indication, customers seem to have embraced the concept. It reported that colleagues “… spent several days studying the operations of the first Amazon Go store in Seattle” and found that:

Amazon Go stores produce more sales per square foot than virtually any other retailer except Apple and a few other specialty stores … we estimate the annual sales per square foot of the selling area was $2,700, even in the early days of operation … Based on the same observations mentioned above, we estimate that the Seatle [sic] Amazon Go store is generating about 50 inventory turns per year—4 to 5 times what’s typical in other retail operations.

If the above figures are to be trusted, then perhaps it’s no wonder that at about the same time CNBC trumpeted, “Amazon [is] reportedly planning 3,000 cashier-less stores by 2021.” 

Yet that word reportedly in reportedly planning left leeway, and it’s a good thing. Now, about a year after the CNBC headline, there are only 18 Amazon Go stores in operation. Speculation is rampant as to reasons behind the slowdown, from logistics, to plans for bigger and better things.

Meanwhile, in a seemingly backward move reminiscent of Apple’s introducing a credit card, Amazon just announced that its cashierless, cashless stores will soon accept cash. 

A few months ago, CNBC reported:

Amazon Go stores, which let customers buy items without waiting in checkout lines, will start accepting cash, amid intensifying criticism that the company is discriminating against the unbanked.

The unbanked represent no trivial demographic. Business Insider estimates two billion unbanked worldwide, and the U.S. Federal Reserve estimates that there are some 55 million unbanked or underbanked domestically. That’s a lot of people who would not be able to shop in a cashless store.

While “intensifying criticism” may surely have been a consideration for Amazon, a trend toward outlawing cashless stores must surely have been one as well. CNBC added that in March of this year, Philadelphia …

… became the first major U.S. city to ban cashless stores despite Amazon’s reported attempt to block the law. The state of New Jersey followed a couple weeks later, and cities like New York, San Francisco and Chicago are considering similar laws. Massachusetts has had a law in place for decades requiring stores to accept cash.

I am, of course, a digital payments devotee. I love the concept of universal cashless-ness and continue to hold out hope for it. But I am also for equal opportunity and equal access, even at such times as might cause Adam Smith to wring his invisible hands. 

Regulations aside, cashless technology continues moving forward. Last week, Finextra reported on a Dutch supermarket chain where “… customers tap their bank card as they enter, pick up their groceries, and walk out.” Cool.

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