CEO & Founder. Myplanet specializes in creating digital experience platforms for organizations facing complex commerce challenges.
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Contactless and checkoutless shopping are talked about quite a bit these days, but increased media coverage doesn’t automatically mean increased understanding. Few know the differences between the two terms, let alone how the technologies behind them work, what the true costs and benefits are or what the rise in their adoption rates will mean for the future of digital experiences. It’s time to dig in a little deeper into what to expect from this new wave of shopping options.
One Problem, Two Approaches
First and foremost, a little terminology clarification: Contactless and checkoutless shopping aren't the same thing. Both aim for the same goal — improved shopping experiences — but their paths to achieving that goal diverge significantly, which impacts how the rollout and adoption of the underlying technologies play out.
Contactless offers a low-to-no touch shopping experience. Things like mobile wallets and tap-to-pay enabled chip cards are hallmarks of the category, improving shopping by streamlining existing in-store experiences. No more fumbling to swipe cards or enter PINs. In the age of Covid, contactless has reigned supreme with its faster, lower-friction approach to traditional shopping experiences.
Checkoutless takes a different tack, rethinking the in-store experience by getting rid of the checkout altogether. Forget fumble-free payments at the front of the line; you don’t even line up. No more unloading items onto a conveyor belt or using scanners that don’t work — it’s all handled in the background, automatically. In its purest incarnation, checkoutless lets you walk in, grab what you want and walk back out again.
The two experiences offer different approaches to the same problem. As a parallel, consider hybrid and fully electric vehicles, both of which aim to reduce our dependence on fossil fuels.
Hybrid cars are like contactless shopping. They increase fuel efficiency — just as contactless can improve the payment part of the shopping experience — but they still lean heavily on existing infrastructure and the same general conception of car technology we've always had.
Electric cars operate more like checkoutless technology. They remove gas from the equation entirely, which requires a significant investment in both the core technology and in the systems that support the driving experience (e.g., retraining mechanics, converting gas stations to charging stations, etc.). It’s a more transformational approach to the same goal, but the end result will be more impactful, too: the elimination of gas from the driving experience. Similarly, checkoutless removes our need for purchasing actions from the shopping experience.
Contactless Has Thrived During The Pandemic
As “stay 6 feet apart or stay home” became a public health imperative, contactless technology surged in popularity. The tech has been around for many years — and implemented across a wide cross-section of retail experiences — but until a global pandemic increased the value of the tech, uptake was more slow-and-steady than now-or-never.
Contactless doesn’t upend an entire system; it improves a portion of it. Arguably that makes it a more likely candidate for adoption, but in reality, the impetus to invest hasn’t always been there. Contactless alone doesn’t offer enough benefit to be a significant differentiator in the minds of consumers. Or at least, it didn't. Throw in a deadly virus and the conversation changes.
Contactless's pandemic-induced popularity has coincided with the more recent emergence of checkoutless experiences. The overlapping timing helps explain the overlapping usage of the terms, but as we transition out of the 6-feet-apart era, I expect checkoutless will become the buzzier star of the two.
Checkoutless Holds More Long-Term Appeal
Checkoutless technology isn't yet widely distributed, but it’s more mature than most people realize. Major retailers are already racing to roll it out to their customers, recognizing this will be a differentiator for their clientele that tips the scales in favor of early investment.
From Amazon Go’s Just Walk Out tech to the smart carts cropping up in stores across North America to self-scan options, these experiences don’t just speed up the payment part of the checkout process, they aim to remove the checkout part from the equation altogether. (Cashierless is another more-or-less interchangeable term to checkoutless, used by Forrester.)
Checkoutless solutions give consumers what they want: an easier shopping experience. While that’s desirable for retailers, too (improvements in customer satisfaction lead to improvements in the bottom line), the major draw of all this new technology is access to new consumer data. Checkoutless technology provides real-time data from physical stores, not just apps and websites that were previously unavailable.
Understanding in-store shopping behaviors — what’s grabbed on impulse, what gets picked up and put back, what’s lingered over — is a key to unlocking the kind of customer-centric experiences that make online shopping so appealing. By orchestrating a better customer journey in a brick-and-mortar setting, brands will be able to create seamless omnichannel experiences that offer the best of both worlds to their customers. Convenience and customer service across every touchpoint is the true long-term benefit of checkoutless shopping.
Two Approaches, One Store
Retail is a massive sector. It will take time for checkoutless experiences to roll out beyond a few major players in the grocery space, where they’re currently concentrated. The infrastructure requirements can be significant, much greater than those for contactless payments, and consumers will take time to get used to the new checkoutless systems before adopting them full force. Even then, there will always be people who need or prefer more traditional methods of purchasing.
Realistically, we’re likely to see a mix of both technologies for a long time to come. Contactless shopping isn’t nearing its end — far from it — but because checkoutless has a greater impact on the whole of the experience, it’s likely to cause a bigger splash over the long haul.
The technologies powering these experiences are still extremely new. It’s too soon to declare a winner in the great checkoutless tech wars of the modern era, and there’s going to be more than one path to friction-free shopping success. But one thing is for sure: The end of the pandemic won’t bring about an end to the shifts and changes we’re seeing in retail settings.
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