Sam’s Club is the latest retailer to integrate technology that expedites or replaces the traditional checkout aisle. Erstwhile blitzed by Amazon and its ‘just walk out’ standard, the technology – which we’re now calling simply, exit tech – is meant to streamline longstanding logistical bottlenecks in retail.
Before getting into Sams Club’s particulars, the background on this concept is all about yield optimization – especially at a time when physical retail is in dire need of digital infusions. Rather than funnel shoppers into traffic jams and single-file lines to pay for things, exit tech speeds things up.
For example, it manifests in various forms of automation to tally and transact a given shopping cart. In Amazon’s case, that moving target of modalities has included everything from cameras and sensors that detect when you put something in your cart, to palm scanning stations at store entrances/exits.
Amazon has aggressively pursued all the above as part of its broader retail-as-a-service play. Just like it revolutionized eCommerce and cloud computing, it sees retail (and healthcare) as an industry primed for Amazon-style disruption. Amazon Go stores and Whole Foods have thus far been test beds for the tech.
Exit Strategy
So with that contextual backdrop, what is Sam’s Club doing? The Walmart-owned big-box retailer has rolled out an automated way to validate shoppers’ carts. This replaces the traditional method of store staff eyeballing a given cart against a physical receipt after you’ve paid (the same is done at Costco).
Specifically, the new system employs computer vision to capture images of a given cart to compare that to the data processed as customers check out and pay. That computer vision gets smarter as the system improves over time and thousands of exit transactions are analyzed – basically, one big training set.
And that brings us to the magic word… the whole thing wouldn’t be complete without an AI spin. But here it’s legitimate. Computer vision, often put in the multimodal-AI bucket, utilizes machine learning so that cameras can see and make sense of physical subjects… in this case, a shopping cart full of stuff.
Of course, this is a bit different from Amazon’s exit tech in that it’s applied to the second cart check… rather than streamlining checkout more holistically. But in fairness, Sam’s Club basket sizes necessitate that extra layer of validation to make sure your 5-pound bag of frozen chicken was paid for.
Showing Results
One question that emerges is why? While Amazon is making RaaS moves to disrupt a massive industry and find its next growth inflection, Walmart/Sam’s is doing it for different reasons – to boost operational efficiencies and yield. Second-order effects may also result, such as customer satisfaction and retention.
And beyond speed for retailers and customers (both important), accuracy could improve. If you shop at Sam’s Club or Costco, you’ll notice these exit-checks are prone to human error. It’s often a quick eye scan before the store associate swipes her pink highlighter across your receipt. Enter retail shrink.
The other question is how it all applies to SMB operations. As these things tend to start with big brands before trickling down to SMBs, all the above is a leading indicator for the opportunities that could be in the pipeline for SMB SaaS. That could take a while, but it’s all about skating to where the puck is going.
We’ll keep watching to see how Sam’s Club’s newest exit tech plays out. Meanwhile, it’s already showing results, with a 23 percent average increase in customer exit speed (from checkout to exit). So far, it’s been deployed at 120 U.S. Sam’s Clubs – 20 percent of its footprint – with the rest coming by year-end.
