Self-Serve Retail Rises on ‘Smart Commerce’ Technology

Self-serve commerce has come a long way since the concept was introduced almost 40 years ago by a company called CheckRobot. Developers back then were years away from being able to leverage the modern Internet and still decades away from artificial intelligence (AI), but the technology was advanced enough to launch a bold new idea.

In July 1986, CheckRobot introduced its first self-checkout station in a Kroger located in Morrow, Georgia, a suburb of Atlanta. “Even if this is wildly successful,” Kroger spokesperson Paul Benrish told United Press International at the time, “it’s not going to be a replacement for check-out lanes with cashiers. We envision it as a supplement to that.”

Fast-forward some four decades later, and self-serve commerce, as it is now commonly called, is ubiquitous. Not only do grocery stores offer multiple self-checkout stations, such units can also be found in drug stores such as CVS, department stores like Walmart and Target, and even dollar stores.

True to Bernish’s words, checkout lanes operated by store personnel have not disappeared. However, anyone who has recently visited a grocery store, or Target or Walmart for that matter, can attest to the fact that there are fewer human cashiers.

According to a February report from PYMNTS Intelligence and Cantaloupe titled “Commerce Transformed: How AI and IoT Are Rebooting Self-Service Retail,” new technology is cementing self-commerce as an essential part of the food and beverage and retail business models.

Pandemic Growth

The COVID-19 pandemic hastened the growth in self-service technologies as contactless checkout became highly desirable for merchants and customers alike.

In 2021, HMS Host, operator of food and beverage and retail locations in airports and other travel venues, introduced AI-powered self-checkout food and beverage kiosks at Charlotte Douglas International Airport in North Carolina.

Indeed, during the pandemic and recovery, there was a 20% rise in self-checkout usage, according to the PYMNTS Intelligence report. At that pace, self-checkout deployment could double by 2030.

Frictionless Payments

Frictionless payment has been a boon to online retailers in recent years, but brick-and-mortar businesses have also benefited, notably in the area of self-commerce.

Data from Cantaloupe shows that cashless transactions now account for 69% of all food and beverage vending machine sales, with contactless methods representing 65% of such payments. In so-called mini-markets, 96% of transactions are cashless.

“In other words, frictionless payment offerings improve customer experience and strengthen business performance — a dual benefit that reinforces the strategic value of self-service,” the report said.

Adoption and Expectations

Labor shortages have also made self-serve commerce more desirable for businesses and consumers alike, particularly in the Asia-Pacific region and the Middle East, where the availability of workers is at a premium.

Globally, younger consumers are leading the adoption of self-serve commerce. The report noted that among shoppers ages 18 to 44, 53% prefer self-checkout, citing shorter lines, frictionless payment options and privacy.

Generation Z consumers in the U.S. and the U.K. have been especially keen, with 52% reporting they would switch retailers based on the availability of self-serve checkout options, and 49% indicating they are likely to spend more when such services are available.

Their priorities indicate a powerful trend in that today’s consumer desires speedy, service, shorter lines and autonomy when shopping. Businesses, in turn, can leverage these preferences into greater market share and increased customer loyalty.

New Tech Advances

Self-service kiosks are now becoming smart commerce hubs — powered by IoT, AI and mobile tech — and are modernizing vending and retail. Real-time data integration improves customer experience and boosts business efficiency through optimized inventory and data-driven decisions, like monitoring inventory in real time and reducing retail shrinkage.