To purchase at the venue of the future, just walk out
So I underestimated the aftereffects of vaccine shot number two. 36 hours of sluggishness caused me to skip my writing routine to catch up on client projects. Alas, after a week hiatus, I’m back to continue the future of venue technology series.
This week’s topic, smart checkout technologies, is a natural segue from mobile ordering. Even with the best mobile ordering technology at their disposal, a segment of your fanbase will always prefer getting up from their seats and heading to a concession stand.
Enter smart checkout technology.
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Let’s dive in…
Dumb question but what do you mean by smart checkout systems?
Great place to start. Smart checkout or autonomous systems eliminate the traditional retail checkout experience. In simple flowchart terms:
Traditional Checkout: Walk in store -> Gather items in cart or on tray -> Wait in checkout line -> Scan Your Items -> Pay with Card or Cash -> Receipt
Smart Checkout: Walk in -> Grab Items -> Walk out
Which one sounds like the better customer experience?
According to a recent study, the volume of transactions that will be processed through smart checkout systems is expected to grow from $2 billion in 2020 to $387 billion in 2025. Stadiums and arenas will make up a large chunk of that volume.
How does the technology work?
I am not an engineer and can’t speak to the technical minutia. But how it was explained to me:
Smart checkout systems intertwine smart entry solutions, computer vision and smart sensors. No cash registers. No cashiers.
Customers scan an app or credit card upon entering the store. Think no different than a subway turnstile in New York. No access if you don’t scan your payment information.
Using computer vision, cameras identify items that are picked off shelves and assign them to your cart. Note – Computer vision is a form of artificial intelligence where computers are trained to identify images. Meanwhile, smart sensors provide for real-time inventory management.
Customers then simply walk-out. Since the venue has your payment information upon entrance, a receipt is automatically sent afterwards.
Gotcha. I understand the ‘what’ now but it all seems so complex. Can you explain why to adopt in layman’s terms?
Many of the benefits overlap with the reasons for adopting mobile ordering technology:
- A better customer experience – No lines. No cash or cards. You get it. Moving on.
- More revenue – Goes hand-in-hand with no lines, the faster people get in and out, the more volume is passing through your storefront, the more dollars flowing to your bottom line.
- Robust data collection – Understanding buying history allows you to personalize offers while operation you benefit from being able to better manage inventory.
Two additional benefits that don’t overlap with mobile ordering:
- Labor efficiency – As I mentioned above, smart checkout systems remove the human element to operate cash registers. On top of eliminating salary costs, you remove human error (e.g., mis-keying an item) and training requirements. Note – I’d recommend still having a security guard or greeter to oversee entry.
- Real estate efficiency – Retail stores commonly use a sales per square foot metric to analyze financial returns and efficiency. When utilized effectively, smart checkout drastically improves your sales per square foot in certain areas of the venue.
That sounds appealing. If I’m managing a venue should I go full smart checkout?
To steal some words from the immortal Lee Corso, Not so fast my friend.
Before committing to any smart checkout technologies, here are some considerations:
- The hot food dilemma – Smart checkout technology works great for packaged items (e.g., soda bottles, candy bars, etc.) since it’s easy to train a computer to recognize the same image. But hot food and platters are more complex since there isn’t always uniformity of product (i.e., a wrapped hamburger looks like a wrapped chicken sandwich to a machine). Plus, building a smart checkout store with an attached kitchen opens up additional questions.
- Processing power – Due to the reliance on cloud hosting for the smart technology, the current iterations of the technology needs strong connectivity. Given the age of many stadiums, connectivity and network infrastructure weren’t concerns when being built.
- Build-out costs – Retrofitting existing stadium space comes with a cost. Plus determining the return on investment must consider the upfront capital costs of equipment (purchasing the entry turnstiles, sensors, etc.) and one-time implementation fees.
If I was managing a venue, I’d think of my concession footprint as a portfolio. Smart checkout solutions shouldn’t replace my hot food stations but can complement my other stores for small areas (700 square feet or less). For example, a small station with primarily cold drinks and canned beer caters to the beverage consuming crowd who have no interest in waiting in a line on a hot day (assuming the entry solution solves for age verification).
Who has already adopted smart checkout systems?
A couple of forward-thinking venues have implemented smart checkouts over the past several months.
- Zippin recently debuted at the Golden One Center (Sacramento Kings) and Empower Field at Mile High Stadium (Denver Broncos). From talking to one of their reps, the Golden One Center pilot store was built-out in less than a month while the Denver Broncos have seen average transaction time well under a minute.
- Amazon, which had introduced Amazon Go ‘just walk-out’ retail stores in Seattle, recently introduced its MRKT branded stores at the TD Garden, home of the Boston Celtics and Boston Bruins.
Anything else to have on the radar?
Two additional points worth raising.
First, up until this point, we’ve been referring to smart checkout technologies as full stores for customers to walk in and walk out. But there’s also the potential to use computer vision technology and other creative solutions to speed up the checkout line process or automate certain aspects. I lump the following companies in with my definition of “smart checkout:”
- Mashgin has built a touchless checkout system that uses computer vision to identify items and tally up a customer’s bill. You achieve many of the same goals of a smart checkout store without needing the upfront capital investment (machines are rented per month). Labor costs are still eliminated as cashiers are not required.
- Then there’s TendedBar, which delivers venues a modular smart bar to speed up lines for beer, wine and cocktails.
- Last edition mentioned SwipeStation which utilizes kiosks and a mobile application to eliminate lines and improve ease of service.
Second, I’m getting ahead of myself since there’s a long way to go in smart checkout adoption but don’t be surprised if in a decade people are commonly paying using eye, no different than opening up your iPhone. Blink has built eye tracking technology, more from an analytics perspective but I’d bet the future use case involves more payment technology.
That was a lot of helpful information. Can you summarize quickly?
- Smart checkout systems utilize computer vision and smart sensors to improve the customer experience by removing frictions associated with the traditional checkout process.
- While I wouldn’t advise overhauling your entire concessions footprint, smart checkout stores can improve utilization of certain real estate and be accretive to overall sales.
- Zippin has deployed some stores for the Sacramento Kings and Denver Broncos while Amazon MKRTs have been installed at the TD Garden in Boston.
- You don’t necessarily need an entire walk-in, walk-out store as there are several other options for disruptive technologies to improve the checkout experience for customers and increase throughput.
Until next time,
The next topic in the future venue technology will be digital ticketing & mobile wallets given all the recent announcements from teams, venues and universities.
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