Payments Innovation

How Unattended Retail Is Shaping Retail’s Future

The world of unattended retail has come a very long way in a very short time. Less than a decade ago, the unattended retail space was more or less defined by vending machines. It was the source of last-resort sustenance – participating in unattended retail usually meant picking up a Coke or a bag of Cheetos on the run.

And the reason for that, WorldNet Payments Co-Founder and Chief Innovation Officer John Clarke told Karen Webster in a recent PYMNTS interview, is pretty straightforward. Until very recently, unattended retail really wasn’t an innovation-focused space. Vending machines were mostly the provenance of public facilities and small mom-and-pop shops, the manufacturers were all light “bending metal” operations, and the main motivation of the space was offering consumers something fast and functional.

“The whole sector was very low innovation and had very little invested in it. But retailers really began to see it when they started asking themselves if unattended retail can solve their problems,” Clarke said. “And now there is a massive investment driven by changing consumer demands.”

Consumers, increasingly confronted with improved opportunities in the space, are looking for a lot of different things, Clarke said, but at base their concern is always the same: how to get what they want, when they want it, while having to lease out the minimal amount of mental real estate to get it done.

The Two Paths of Unattended Retail – and Its Potential

Unattended retail, Clarke noted, has gone from being a conversation about one thing – mostly vending machines – to a conversation about a whole range of offerings, all under the single heading. Broadly, however, the sector can be broken down into two large subheadings, he noted.

The first is unattended retail shops of the Amazon Go variety, which blend a traditional in-store shopping experience wedded to automated authentication and tracking – such that the customer can walk in and out without making a layover at the checkout station.

The second is the “intelligent cabinets” model, which superficially resembles the vending machine experience of the past, though radically redesigned. The interior contents could be candy, but could also be $200 dollar speakers, or jewelry, or cupcakes. The applications, Clarke said, aren’t quite infinite – but they are vast.

“There are many flavors being tried to see what works best in a specific environment,” he noted. “But as for what’s possible, it is really anything you can think of where there is an opportunity to expand your business model by picking the appropriate unattended retail solution.”

The appropriate solutions, Clarke said, can be tricky to hit upon. Cannabis, for example, is more than a payment challenge when it comes to unattended retail, because there are other factors like age verification that have to be layered on. That’s why stories about innovative unattended retail solutions also often focus on successful integrations and partnerships that allow businesses to unlock greater, safer functionality, he noted.

There’s also a design element that has never really been part of the equation before, Clarke added. When unattended retail meant a vending machine that would live in a corner basement, there wasn’t a lot of consideration about what it looked like, other than that it needed to be clearly identifiable. Today, he said, intelligent cabinets are high-design, meant to live in places like the middle of showroom floors and intended to visually draw users to them.

And, Clarke said, over the next half decade and beyond, many more users will be drawn in.

What’s Next

Toward the end of the interview, Clarke said he loves being asked about predicting the future – because, he joked, it is so easy to get right.

But there are things on the horizon that are pretty visible, even from a few years out. The two big families of unattended retail – the Amazon Go-type stores and the smart cabinets – are pretty well-established and are likely to spread. That doesn’t mean every variation will be a winner, he said, because as is the case with all innovations, some will soar like eagles and some will sink like rocks.

“I’ve seen some things that don’t work as well as others,” Clarke said. “There are some flavors that are too clunky to really catch on.”

The overriding, guiding factor, he said, is the consumer – and the reality that consumers don’t want to think about it, fight with it or figure it out when they are trying to purchase something: They just want to get what they want and then be on their way. And businesses will do a lot of experimenting in the near future to figure out how to best enable that, Clarke pointed out – and the answers will change depending on where you are.

But given the way things are growing, it seems increasingly certain that no matter the specific flavors, unattended retail is going to be on the menu a lot more often, Clarke said.

“In the future, I think we will see every retailer with an unattended retail arm as part of their offering to consumers.”

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