Don’t rip out the registers just yet.
When Amazon opened its cashier-less concept grocery store to the public in Seattle on January 22, the company’s stock rose 2.5% – slightly more than the 2.4% increase after Amazon announced that it was buying Whole Foods this past June. Does Amazon Gosignal that smartphone apps and virtual carts will replace checkouts in grocery stores?
A low-cost, automated store is certainly an experiment worth watching. But retailers shouldn’t rush to rip out their registers just yet. Retail is littered with promising technologies introduced with great fanfare that didn’t become mainstream because they didn’t sufficiently benefit either the retailer or the customer.
One reason is that new tools often don’t save the retailer enough or generate sufficient new revenue to cover their cost. Another is that too many customers simply don’t like them. To become the new normal, a technology has to make it beyond the early adopters – typically 10 to 15% of retail shoppers – and appeal to the less tech-savvy majority.