Walmart-owned Sam’s Club is using a small-format cashier-less store in Dallas to test customer comfort with new in-store technologies, including scan and go checkout, “smart” shopping lists based on customer data, and augmented reality. The store, which is called Sam’s Club Now, is set to open this fall and is intended to be a dry run of what Sam’s Club’s version of the store of the future will look like. At 25,000 square feet, it’s a quarter the size of an average Sam’s Club.
“It’s a retail tech lab where we’ll begin testing and learning about how our members like to shop,” said Sam’s Club rep Carrie McKnight. “It’s much smaller, and gives us the ability to test in a smaller environment to see what could potentially scale.”
A core part of the Sam’s Club Now store will be mobile checkout instead of traditional cashier lines. While mobile checkout in the form of scan and go has been available to Sam’s Club customers for two years, it’s been optional — the new store will require customers to use scan and go to pay. Customers will log into the Sam’s Club app, scan items as they put them in their physical shopping cart, and pay for them through the app. Once the payment has been completed, the app generates a barcode that is checked by a staff member called a “member host” as the customer exits the store.
While Walmart did two scan and go trials before pulling the plug on it due to low adoption, the company is betting that members-only Sam’s Club customers are more likely to make it part of their shopping routine. Since getting a receipt checked at the end of a store visit is already part of the experience, scan and go only takes the cashier out of the process.
“Sam’s Club and Walmart’s businesses are very different, and it’s not uncommon that what works for one isn’t the best experience for the other’s customers or members,” McKnight said. “Scan and go works well at Sam’s Club because we’re a membership-driven business and don’t have any items that need to be weighed.”
While scan and go eliminates cashiers, it stops short of Amazon Go’s experience where customers put items in shopping carts and just walk out of the stores. The necessity to manually scan each item could be a source of friction for some customers.
“Part of the clunkiness about it is that you still need to manually scan each item — in the future, your basket will already know what’s in it,” Andrew Murphy, managing partner of Loup Ventures, recently told Digiday.
For now, the company is using Sam’s Club Now as a way to gather feedback from customers on emerging technologies. Other capabilities the company is piloting at the store are voice-activated way-finding and navigation tools, digital shopping lists that pre-populate based on customers’ shopping behavior and interactive product experiences through augmented reality. Sucharita Kodali, principal analyst at Forrester, said scan and go itself isn’t a big deal, since checkout isn’t a major point of friction at Sam’s Clubs. Bigger opportunities are in way-finding and devices to help store workers do their jobs more efficiently.
With “just walk out” technology at Amazon Go stores giving the company an edge over competitors, replicating the model is more difficult for traditional retailers who are making major investments in upgrading legacy technology. For now, large retailers are testing customer uptake on cashier-less checkout and other in-store technology, said Ryan Broshar, managing director at Techstars Retail.
“For a lot of retailers outside of Amazon, this is really just a ‘toe in the water’ moment — is there a validation in the market, do customers want this, or is this technology looking for a customer?” he said. “It’s a long process for them, as a lot of the technology is largely unproven and retrofitting existing stores is a lot harder than building them [from scratch] like Amazon.”
Subscribe to the Digiday Retail Briefing: A weekly email with news, analysis and research covering the modernization of retail and e-commerce.