Why Retailers are Abandoning Scan & Go Self-Checkout

In 2018 Walmart announced it was suspending its Scan & Go effort due to poor feedback and low customer participation. It was a long and expensive experiment for the world’s largest retailer. Walmart’s Scan & Go required customers to download an app, scan their own items as they shopped and then show their receipt at the door before exiting the store. This transferred the labor from Walmart employees and put it on the customer.

Other retailers have used this type of technology for many years; think handheld scanners at grocers such as Stop & Shop. It was interesting several years ago when many retailers including Walmart started their pilots, but not anymore. Customers don’t like it, and shrinkage has been a huge problem. That’s why retailers are abandoning their scan & go pilots for more modern options like autonomous checkout.

Yet in the past couple years we’ve seen several retailers, including (ironically) Sam’s Club, launch new scan & go pilots. Some are even calling this tired technology autonomous checkout, comparing it to systems from Amazon Go. But scan & go and autonomous checkout really have little in common. Autonomous checkout does not require any waiting in line or scanning, least of all by asking the shopper to do the store’s work.

The fact is, scan & go is not autonomous checkout – it is glorified self-checkout, asking customers to take on the labor of checkout themselves. As Thad Peterson of Aite Group put it in an interview with PaymentsSource, “Having the consumer scan their own products and then walking out without going to the point of sale is great, but I’m not sure that consumers would find scanning an entire cart of groceries more convenient than letting a store associate handle that job at the point of sale.”

If Walmart, with its deep pockets and hundreds of dedicated staff, couldn’t make Scan & Go work, what makes other retailers think they can? Yet we still speak with retailers, including very large, well-known companies, who have not given up on this old-fashioned concept.

We tell them they may be headed backwards. Starting fresh with autonomous checkout makes so much more sense, for both the retailer and the customer. After a one-time installation of cameras and a server in a back room, stores can eliminate their checkout areas, leaving only a kiosk or two for shoppers who choose to checkout as guests or pay in cash. That valuable front-of-the-store real estate becomes more room for merchandise, increasing a store’s capacity and sales volume.

While we don’t believe cash and credit cards are going away anytime soon – and every retailer we speak with says the same – we do believe traditional cashier stations will go away. In a cashierless world, cash and cards can still be handled via kiosk, when shoppers don’t want to use an app, and retail staff can be redeployed to the floor to assist shoppers (a rarity in today’s retail environment) and ensure shelves are stocked.

While some believe autonomous checkout will lead to less human interaction, we think it could actually lead to more. Shoppers will be able to actually find a human to help them as they shop. Now, that would be a surprise.

Note: this article was first published in January 2019 and has been updated.

Michael Suswal is co-founder and COO of Standard Cognition