Future of Sports
Chatting Sports Tech

Edition #11 – Smart Checkout Technology

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.

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,

– Charles

The next topic in the future venue technology will be digital ticketing & mobile wallets given all the recent announcements from teams, venues and universities.

If you enjoyed this edition, tell your friends or colleagues about Chatting Sports Tech. Add me on LinkedIn and follow me on Twitter @ccampisi_EES.

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Edition #10 – Mobile Ordering

Analyzing Mobile Ordering: Why Your Organization Should Adopt, What Not To Do & The Players In The Space

So I haven’t attended an in-person game since the pandemic began. But man am I itching to post up in the Yankee Stadium bleachers on a hot summer day. Vaccine shot number two on Monday and then straight to the ballpark (two weeks later).

Speaking of returning to venues, I’ve spent a lot of time over the past two months talking to companies building future in-venue technology. The next several editions will discuss emerging technologies changing the stadium experience. This edition will kick off the series by focusing on mobile ordering & in-seat delivery. 

One housekeeping item – If you want Chatting Sports Tech delivered to your inbox, subscribe at the top of this page. 

Let’s dive in…

All the rage coming out of COVID is stadiums upgrading to fully contactless payment. Is this the same as mobile ordering?

Not exactly. Contactless payment generally refers to the use of radio frequency identification (RFID) or near field communication (NFC) to make secure payments. Think paying with your smartphone by holding it near a point of sale terminal. Essentially you remove cash entirely and eliminate the need to physically hand over a plastic card.

By mobile ordering, I’m referring to the ability to place an order through a smartphone and eliminate waiting in concession lines or flagging down a hawker in an aisle. 

Going contactless doesn’t address certain pain points of concession ordering. Contactless might speed up lines but doesn’t eliminate them. Fans are still distracted from watching a game. There’s no benefit to the workforce who still need to manually key in an order and then quickly round up the items. 

Early in the pandemic, everyone clamored to go cashless since the coronavirus was assumed to live on surfaces and be transmitted through touch. Though proved untrue by science – don’t stop washing your hands however – the pandemic provided the spark for more venues to go fully contactless even though the technology had existed for a while. But don’t automatically assume headlines that a venue has gone contactless means it implemented a robust mobile ordering strategy. 

Gotcha. So walk me through the value of mobile ordering.

Let’s look at the benefits of mobile ordering from three angles: 1) Improved customer satisfaction, 2) Technology can drive more dollars and 3) Removing frictions aligned with cash.

  1. Improved customer satisfaction – When I meet a person who enjoys waiting in lines, it will be the first in my 32 years on this planet. People HATE lines, especially mid-game where time spent waiting could result in missing a game’s most exciting play. With mobile ordering, fans who value watching the game over getting food have an avenue to order efficiently. 
  2. Technology can drive more dollars – Besides increasing your customer base, mobile ordering technology can drive additional revenue through higher per caps. If used effectively, promotions and push notifications can increase cart size. Push inventory that’s not selling. Sell hot dogs 50% off within 5 minutes of a big play. Add popcorn to an existing item for $2. As long as you cover marginal cost, additional sales are accretive to your bottom line. 
  3. Removing frictions aligned with cash – We touched on this above. Cash is messy. You don’t collect any buyer payment history. It’s slow to process. It’s vulnerable to theft. Removing cash speeds up the check-out process, resulting in an increased volume of sales.

Those benefits seem obvious. Should I rush my venue to implement mobile ordering?

Lesson for any technology implementation – When you fail to consider the human element and training required, responses can be disastrous. Per Front Office Sports, MLB fans loudly complained about concession lines during opening weekend, forcing the teams to revert back to traditional walk up ordering from planned 100% digital ordering. Clearly, the pandemic accelerated the move to cashless but teams were ill prepared to deal with the high volume. 

Quick clarification before proceeding: We generally only hear when things go wrong. It’s why the media covers plane crashes so intensely but never mentions the tens of thousands of planes landing safely everyday.  Before you assume every mobile ordering implementation has hiccups, understand many venues successfully launched mobile ordering without a blip that you’ll never hear about. 

That said, it’s also very possible those MLB teams lost fans for life during those games. The in-venue experience is in constant battle with at-home viewing. Adding miserable concession lines can be enough to tip the scales for some people.

You mentioned the human element and training required. Can you elaborate on those and other operating challenges for implementation?

Identifying useful technology is only the first step to making life easier. The implementation piece is often the bigger determining factor whether technology can achieve its intended purpose (hence, why we are building a service to help sports properties navigate the entire sourcing through implementation process). 

Here are the operating challenges in my mind:

  • Awareness – People won’t order through mobile if they don’t realize it’s an option. How will you introduce fans to mobile ordering technology? Will there be in-stadium signage? Will there be a stadium announcement? Will fans be made aware prior to arriving? Success relies on a coordinated effort between venue operations and marketing. 
  • Access – In other words, how will customers be able to place orders? Mobile app or a QR web pass-through? I have a couple thoughts down below but what method you determine relies on connectivity in the stadium. More thoughts on this in a future edition. 
  • Integration – A customer facing ordering platform will often need several integrations to be successful. That includes: 1) Point-of-sale system – To accept payments, 2) Inventory Management – Back end reconciliation of supplies, 3) CRM – To collect customer information, 4) Mobile Wallet – To allow people to link branded cards and gift cards (optional), 5) In-Seat Delivery (if a separate vendor) – See below
  • Fulfillment – Fulfilling mobile orders is a different operational process. Will fans pick up from an existing concession stand or a designated pick-up area? If you use a designated pick-up area, how does that impact the customer flow in the venue? Regardless which you choose, you will need to retrain your workforce to ensure mobile orders get the same attention as walk-up customers. If I had to guess, this was a major factor in the opening weekend MLB fail. 
  • Workforce Size – Similarly, understanding the demand when implementing mobile ordering will determine whether additional staff are required. Normally, you’d consider piloting in a small area of a stadium but the pandemic forced many venues to adopt without a trial period. If mobile ordering increases volume of orders by 25%, will you have enough employees to adequately handle?

How does in-seat delivery factor in?

How I think about it – in-seat delivery is absolutely crucial coming out of the pandemic and for the next generation of fans. 

Why? Behavior is sticky, breaking habits is difficult and Americans are generally lazy. With everyone stuck inside, the pandemic accelerated the reliance on delivery services to the point customers now expect to have that option. 

With in-seat delivery, you face some of the same operational challenges as mobile ordering, namely adequate staffing and retraining your workforce. But if you can figure out a strategy that redeploys hawkers for deliveries, your operational flow can be made more efficient by transition from push supply to pull demand. 

What else should I consider as part of my mobile ordering strategy?

Your mobile ordering strategy shouldn’t be an isolated decision by venue operations. Rather consider other organizational objectives and how mobile ordering can influence fan behavior.

What’s an example? Let’s say a goal is to collect more fan information and supplement your CRM system. An asset at your disposal is your team mobile app. Thus, you can force fans to download your mobile app to access in-venue mobile ordering and then push additional notifications to that fan outside that specific game. Venue operations vendor selection would therefore benefit the marketing and sponsorship teams. 

What’s another example? An effective mobile order strategy can redirect flow positively. If you put a food pick up zone in front of a merchandise store, a fan may notice a cool new jersey they ultimately buy. Before mobile ordering, they would have headed straight to a concession stand, waited in line, maybe gotten frustrated and then headed straight back to their seat with a singular focus. With mobile ordering, free advertising of merchandising through strategic positioning. 

Who are the companies playing in the stadium space? 

There are a bunch of companies that have emerged. This list doesn’t even include mobile ordering solutions for non-sports use cases like restaurants. 

Since many of the companies aren’t solely focused on mobile ordering, I’m going through the list based on value proposition:

  • Don’t have sufficient WiFi in-stadium? UK company SwipeStation has built a mobile ordering system using kiosks that doesn’t require connectivity. Additionally, their system simplifies the order preparation process to reduce the training burden on concession staff. 
  • Looking for a low cost provider? Partake, which also has multiple other mobile fan engagement features, has partnered with multiple minor league baseball clubs at the lowest price point I’ve seen.
  • Want a company with a flexible contract model? FanFood offers fee sharing agreements or hybrid pricing (i.e., fixed per stand) allowing a client to choose the structure best fitting their situation. 
  • Think your fans are sick of another mobile app? TEXT4Service from TEZ Technologies enables ordering through a QR code without needing to overhaul your venue point-of-sale system. 
  • Looking for a company that is 100% focused on mobile ordering? Tapin2 provides a complete product set enabling mobile ordering including order taker hardware, kiosks, hawker technology, suite focused products and fulfillment solutions. 
  • Is in-seat delivery a priority? Several companies have grown since starting as in-seat delivery specialists, including SeatServe, Stadium Drop and sEATz
  • Do you have an existing POS system? That company may have built their own ordering solution. For example, point of sale company Appetize has built out its own mobile and online ordering software. 
  • Approaching mobile ordering from an ecommerce focus? Venuetize takes a mobile first approach to in-venue ecommerce, offering mobile wallet and a native loyalty & rewards program in conjunction with mobile ordering capabilities. 
  • Looking for a comprehensive venue solution? VenueNext combines mobile ordering with mobile wallet and point of sale as a complete offering.

That hopefully provides some quick context but if you’re looking into adopting mobile ordering in your venue and want to learn more, don’t hesitate to reach out for guidance.

That was a lot of helpful information. Can you summarize quickly?

Absolutely. Key takeaways:

  • The benefits to mobile ordering are numerous, including improved customer experience, ability to drive additional revenue and remove frictions associated with cash.
  • However, failing to consider operational challenges before deployment can result in headaches (see MLB opening weekend wait times).
  • Deploying mobile ordering technology effectively can help drive other organizational goals. 
  • The space is crowded. Certain mobile ordering companies have approached the service differently, though at the end of the day, customers only care about having a seamless ordering experience. 

Until next time,

– Charles

Future topics in this series will include digital ticketing & mobile wallets, smart check-out technologies, safety & security, connectivity and in-stadium engagement.

If you enjoyed this edition, tell your friends or colleagues about Chatting Sports Tech. Add me on LinkedIn and follow me on Twitter @ccampisi_EES.  

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