More Than Half of Gen Z Consumers Would Switch Retailers for Self-Checkout

Early stumbles in self-checkout are giving way to a new era of self-service commerce powered by artificial intelligence and the Internet of Things, reshaping retail and unlocking new opportunities for businesses.

The PYMNTS Intelligence report “Commerce Transformed: How AI and IoT Are Rebooting Self-Service Retail,” a collaboration with Cantaloupe, found that consumer demand for frictionless, autonomous shopping experiences continues its upward trajectory. This demand is driving sustained adoption of self-service commerce past its initial retail applications and the necessity imposed by the pandemic.

First-generation self-checkout solutions, sometimes seen as niche experiences, highlighted limitations for consumers and businesses, including practical inefficiencies that frustrated shoppers, implementation challenges for staff and rising inventory losses that strained budgets. Now, the industry has responded. Next-generation self-service solutions are specifically designed to address the shrinkage risks and friction-laden journeys that prompted some retailers to scale back self-checkout installations.

These advanced solutions are moving from temporary fixes to essential pillars of modern commerce, driven by ongoing digital transformation. Companies like Cantaloupe offer solutions including micro-payment processing, self-checkout kiosks, mobile ordering, connected point-of-sale systems and enterprise cloud software, handling over 1 billion transactions annually across sectors like food and beverage, smart automated retail, hospitality and entertainment.

The advent of AI and IoT networks — interconnected devices enabling real-time data exchange — has sparked innovative solutions that tackle human and operational challenges simultaneously. Found in locations from neighborhood stores to busy transit hubs, cutting-edge, smart, self-service technologies are providing the secure, frictionless experiences customers anticipate while equipping businesses with the operational insight they require.

These solutions are moving beyond fixing prior limitations, promising to dissolve the boundaries of traditional commerce itself. They are integrating real-time data to enhance the consumer experience and allow businesses to scale operations, using dynamic feedback loops to optimize inventory management, pricing and maintenance across networks. Granular visibility into consumer behavior and machine performance provided by these systems empowers data-driven decisions that can reduce shrinkage, minimize downtime and boost profitability.

Key data points highlighting the momentum and potential of self-service commerce include:

Self-checkout deployment is projected to double by 2030, indicating sustained growth beyond its pandemic-accelerated adoption.

More than half of Generation Z consumers in the United States and the United Kingdom report being likely to switch retailers to gain access to checkout-free alternatives.

Cashless transactions represented 69% of all food and beverage vending machine sales in 2023, with contactless methods accounting for 65% of these payments. Cashless payments in vending transactions averaged $2.26, 55% higher than cash transactions, and micro markets saw 96% of payments as cashless, suggesting untapped revenue potential through payment system modernization.

Looking ahead, the future of self-service commerce will be driven by expanding commerce into previously untapped physical spaces using IoT-powered solutions, delivering personalized experiences at scale through AI and real-time data integration, and harnessing data networks for smarter operations such as refining inventory, dynamic pricing and location management.

Technologies like computer vision and IoT sensors are expected to become standard for driving efficiency and reducing shrinkage, enabling profitable, unattended retail operations.

This evolution points toward a future where self-service installations become smart commerce nodes that interact with consumers, predict needs and fulfill purchases, potentially integrating mobile ordering, smart lockers and grab-and-go options to meet hyperlocal and seasonal demand.

The transformation suggests a path to “boundaryless commerce.”