Last month, and on the heels of its latest cashier-less grocery store opening in Chicago, Bloomberg reported that the online giant Amazon.com is planning on opening about 3,000 similar outlets by 2021. It’s an obvious direct assault on other grocery and food chains like 7-Eleven, Subway and Panera Bread. But it’s also an attack on the thousands of mom-and-pop pizza, convenience and other similar stores around the country.
Now Sam’s Club, which is owned by Walmart, is getting into the cashier-less game with the opening of its first Sam’s Club Now store in Dallas.
“There won’t be another club like it,” the SamsClub.com CEO, Jamie Iannone, wrote in a blog post. “It will be a mobile-first shopping experience powered by the new Sam’s Club Now app. At its core, Sam’s Club Now will be a technology lab that doubles as a live, retail club. It’s where we will incubate, test and refine technologies to help define the future of retail.”
Like Amazon Go, customers at Sam’s Club Now will need to download a mobile app that will enable them to scan items picked from the shelf with their smartphone which will then automatically charge their stored credit card. However, Sam’s Club – who seems to trust their customers a little bit less than Amazon – will still require a final scan by an employee before walking out the door.
Sam’s Club, which earlier this year underwent a restructuring that cut about 11,000 jobs, is also going to great lengths to downplay the impact all of this automation will have on its current employees, instead saying that those workers at Sam’s Club Now will be called “Member Hosts” and serve as the “concierge(s) of the club” who will be empowered “with new technology” for faster and better service. “We’ve known for a long time our associates make the difference,” Iannone assured readers, “and that won’t change just because shopping preferences evolve”. We’ll see.
Amazon and Walmart together are among the top retailers in the world. Assuming each finds success (translation: profits) from this new form of automated and self-service approach to shopkeeping, it won’t be long before the trend sweeps across the entire industry. The obvious benefits would be a dramatic decrease in overhead and fewer headaches finding, managing and compensating employees. Other benefits will come in the form of more marketing data, more targeted deals and a faster and more satisfying experience for customers – particularly urban customers – who want their stuff quick and convenient.
The impact for small business is enormous. Big brand competitors like 7-Eleven, Subway, Panera as well as Target, Macy’s, Costco and BJ’s Wholesale Club have the resources to implement their own technology that would emulate Amazon Go and Sam’s Club Now. But can your local grocer, convenience store or sandwich shop afford to do this?
Of course, a small business can provide a higher level of personalized service and quality. But by falling behind in these investments those smaller merchants will no doubt face a higher cost structure and a disappointed customer base who become used to a faster, self-service experience. It’s easier said than done, but if I was a small merchant in 2018 I’d be saving my pennies for a big technology investment that looks today to be inevitable in the not-too-distant future.
