Move over, autonomous stores—here’s the next frontier in retail innovation
In COLLABORATION with
For much of the past decade, retail technology has been chasing a dream: What if you could eliminate the checkout? A smattering of autonomous stores showed what this could look like. Computer vision replacing cashiers; sensors tracking movements; payments becoming invisible. This, we were told, was the future.
The reality has proved to be more complex. The technology is finding a footing only in a specific category of shop: controlled environments with limited product assortments and predictable traffic. Think of them as walk-in vending machines. One operator in Poland has over 50 cashierless stores of this kind operating mainly in workplaces and student halls.1
In large-format grocery and general retail, autonomous stores are on the way out.2 Not only are the economics harder to justify, but eliminating the checkout closes off a key channel for engaging with shoppers.
Hence three current trends in retail innovation, which are about removing friction in other ways.
1.Smart carts: a pragmatic compromise?
Smart carts offer a compromise between self-checkout machines and fully autonomous stores, and they’re gaining traction. One manufacturer in France claims customers in nearly 100 cities, with an order book extending to “thousands of cart commitments with retailers, big and small.”3
The carts typically work by keeping a tab on items a customer places inside. To do this, the cart is equipped with scanners and, sometimes, scales. A screen displays a running total and may surface promotions and advertising. This is a great opportunity for brands to get their messages in front of shoppers at the exact moment they’re making buying decisions.
At the exit, customers either pay on a terminal attached to the trolley or proceed to a physical self-checkout where the basket data is already captured.
Retailers favor smart carts over autonomous stores for very practical reasons. The carts reduce the risk of the system failing to charge for an item, and they require less configuration than ceiling-mounted camera arrays. Above all, store operations can defend them to the CFO. In place of massive fixed costs, you buy as many or as few carts as you like.
“In my experience, retailers are highly pragmatic buyers,” says Geoffrey Barraclough, a payments industry expert, who runs the "Business of Payments" newsletter. “They prefer technologies that layer onto existing stores rather than replace them. They prize incremental gains over grand redesigns, and agility over strategy.” In other words, technologies that add to existing estates stand a better chance than those demanding wholesale reinvention.
2.From BOPIS to “reverse BOPIS”
Omnichannel strategy has long centered on “buy online, pick up in store (BOPIS).” The more interesting, emerging shift runs the other way around. Customers browse in-store, complete the purchase via a sales associate’s smartphone that can take card payments enabled by SoftPOS—an app that turns a phone into a payment terminal—and have items shipped to their home. No waiting in line, no heavy bags, and crucially, no dependency on local stock levels. All store assistants have to do is carry a single, lightweight device. “This idea is already taking root in Western economies,” says Barraclough. “You see it in homeware, lifestyle, and footwear stores, and I expect it will spread further.”
Payment becomes the trigger for fulfillment here, not simply the moment money changes hands. Inventory can be drawn from a warehouse, another branch, or a third- party logistics partner. Physical stores therefore evolve from being a room full of merchandise into something more like a showroom.
This is a rather subtler change than removing checkout entirely, but in making it mobile, retailers can eliminate costly, fixed infrastructure linked to the cash register. And staff can then spend more time doing what they do best—talking to customers.
3.The continued rise of QR codes
No single model of retail innovation is currently winning. Payment is becoming unbundled from traditional point- of-sale in various ways in different contexts.
Take the QR code. Frequently overlooked as a payment method in developed markets with mature NFC-enabled payment terminals everywhere, it has become ubiquitous in Asia, and is now—perhaps counterintuitively—spreading in Western markets too.4 A QR can initiate payment on consumer devices, link loyalty, and unlock product information, all without specialized hardware.
Consumers have been getting used to QR interactions, because restaurants are increasingly using them for pay-at-table, speeding up the checkout process once a diner is done eating. Typically, a scan of the QR takes you to a card-based checkout page, but it won’t be long until the option to pay with a bank transfer is there—and QR-initiated account-to-account (A2A) payments start to gain traction in other contexts. Since money is immediately credited to the merchant, A2A helps consumers manage cashflow, and processing fees can be cheaper than cards.
A warning: QRs are also a security nightmare. They are easily copied and spoofed. Never use one for payments unless you’re sure it’s legitimate.
What we’re learning as retail develops is that the future of retail isn’t so much checkout-free as checkout-everywhere. Smart carts, SoftPOS, and QR turn payment from a place into a capability.
https://www.jpmorgan.com/payments/payments-unbound/sources
Illustration: David Doran
