Retailers Following Amazon in Race to Implement RFID Enabled Auto Checkouts

Posted by on Feb 28, 2017 9:01:00 PM

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This is a follow up to our original post on Amazon Go

It seems like every day some new gadget or device comes out that promises to revolutionize the way we live our lives. Unfortunately, most of the time it’s a lot of hoopla for something that we don’t really need, but it’s cool to have, like wireless earphones and speakers. 

But that doesn’t mean that there aren’t places where high technology can’t make vast improvements to the current way of doing things. Take, for example, the grocery store. Spending up to an hour or more searching for items to then wait in line to pay for such products seems horribly inefficient, even with things like self-checkout and express lanes. Wouldn’t it be great if there was a way for us to get in and out without having to rely on the speed and efficiency of a checkout clerk?

Well, it turns out there is; RFID tags. 

RFID and Grocery Stores

For the last few years, RFID technology has been growing at an exponential rate, meaning that it’s never been easier or more cost-efficient to implement it in your store or warehouse. However, most of the time RFID tags are used for back of house inventory or loss prevention but rarely do they interact with customers. 

But what if you could tag all of your items and then scan them as the customer leaves the store, thereby ensuring that they pay for everything without having to wait in line? Does that seem impossible? Well, consumer giant Amazon doesn’t appear to think so.

The Amazon Model

Recently, this mega-brand unveiled a new shopping experience in Seattle called Amazon Go. The concept is that it works just like a regular grocery store, complete with aisles of products to peruse, but the main difference is that there are no checkout lines. 

So how do the customers pay? Well, to shop at the store, you have to have an Amazon Prime account, and you pass by a turnstile at the opening that targets that account. Then, once you’re ready to leave, the system checks all of your items to see what you’ve taken and then charges accordingly.

Although Amazon is quiet as to how they ensure proper billing and tracking, one method that seems to be viable is RFID. As long as each item is tagged and as long as the system can read them without significant interference, it would be easy to charge customers using a RFID system. 

Cost-Effective or Not?

So, if it was so easy for Amazon to do it, why aren’t other retailers following suit? Well, it turns out that the pilot program could be a jumping off point, not only for the online giant but other stores as well. But the biggest question about implementing RFID (and any new technology in general) is that it will cost more up front, right? 

Well, that might no longer be the case. Because the technology is advancing so rapidly, tags are costing as little as half a cent already, and could potentially cost less in the next few years. That means that it shouldn’t be too much of an investment to tag your inventory, especially if you do so already for tracking purposes in your back of house system.

The biggest issue here is loss prevention and ensuring that the right items are scanned. Crafty customers might try to remove tags from products or cover them up in an attempt to avoid payment, which could lead to some big losses if left unchecked. 

Overall, however, the concept seems sound. While Amazon is paving the way, other retailers are scrambling to see if they can implement a similar system. 

What’s the Point?

In our mad dash to make things high-tech, so many of us are so preoccupied with implementation that we rarely step back to take a look at whether it’s worth it or not. As a business, what are the benefits of using RFID as a potential replacement for checkout lines? After all, you will still need employees to help customers and restock shelves, so are you saving that much money?

Well, in this case, the benefit is more for the client, which means that RFID will be competing with higher end retailers where convenience and service are more important than savings. With that in mind, many different businesses can benefit from using RFID in this way, as long as they are smart about it. One other issue that can easily come up is ensuring that your customers are already in the system. Amazon is lucky in that they already have such a broad consumer base that has accounts, but new companies won’t have that kind of infrastructure built in.

The Future of Grocery?

For now, it seems like Amazon is cornering the market with checkout-less stores, but that doesn’t mean that they will be the only game in town for long. Once RFID becomes more cost-effective and the glaring issues are solved on a wider scale, you can expect more retailers to follow Amazon’s example.

First, it will start with high-end stores, and then it will eventually trickle down to big box stores like Walmart or Target. Eventually, everything will be handled through your smartphone, eliminating the need for cash or wallets.

20 questions to ask yourself before implementing RFID 

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Topics: RFID, Retail

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