Yahoo Finance Is the Retail Cashier an Endangered Species?
The decline of the cashier began when supermarkets started installing self-scanners at checkout lines. That technology, however, was always aimed at people buying just a few items, not those with full shopping carts.
Going cashier-free (or at least drastically cutting the number of cashiers) has become a growing trend in retail establishments . Amazon (NASDAQ: AMZN) tried to lead the way with its Amazon Go convenience store concept, where customers are automatically charged for their purchases, and don't need to scan anything, nor stop in a checkout line at all. After some technical setbacks, it appears the first couple of stores not on an Amazon campus will soon open in Chicago.
More traditional retailers have not gone anywhere near that far, of course, but the idea cashier-free checkout lines has gained favor with a growing number of chains, including Walmart's (NYSE: WMT) Sam's Club and Dollar General (NYSE: DG). In addition, Microsoft (NASDAQ: MSFT) is developing software that will allow retailers to go cashier-free.
Cashiers are going to become increasingly rarer. Image source: Getty Images.
What's happening in retail?
Reducing the number of cashiers a store needs -- or even eliminating them altogether -- allows retailers both to cut labor costs and to reallocate staff to the task of assisting customers elsewhere in the store. Those are no small matters at a time when many major chains have been raising wages in an effort to find and retain quality staff as low unemployment rates have shrunk their available labor pool.
Amazon's Go is the most hands-off model possible. The Microsoft technology, which the company has discussed with Walmart, would work in a similar manner, according to Reuters.
Walmart is using a scaled-back version of that system at some Sam's Club locations, including a prototype small-format store in Dallas. This technology, embedded in the Sam's Club app, allows customers to scan the barcodes of the items they're buying as they shop. Payment is handled through the app; when they finish shopping, they simply show their e-receipt at the door and leave.
Dollar General is testing similar technology in 10 of its stores. Its DG Go app allows customers to scan items with their phones as they go, then complete their purchases at a self-checkout lane. That test will expand to 100 stores in the second quarter, according to remarks made by CEO Todd Vasos during the chain's Q1 earnings call.
Target (NYSE: TGT) has taken a more measured approach. Thus far, it has only expanded the number of self-checkout lanes at some of its stores.
Walmart, it should be noted, tried Scan & Go at its namesake stores, but has dropped the effort there, Supermarket News reported. Now, the chain is testing "Checkout with Me," which decentralizes the process. Store employees with mobile devices will be able to scan purchases and take digital payments anywhere in the store, according to the trade magazine.
What does this mean?
In 2016, 3.5 million American workers held the job of retail cashier, according to the U.S. Bureau of Labor Statistics. That number has likely fallen given the numerous closures of chains including Toys R Us and H.H. Gregg, and the ongoing shrinkage of others such as Sears and Payless.
The return of a modicum of wage growth and the difficulty of filling openings due to a tighter labor market are giving large retailers strong reasons to pursue this technology. Once it becomes familiar to consumers -- and presumably, popular -- others chains will follow.
Expect it to follow a similar adoption arc to the one mobile ordering has charted in restaurants. Giant Starbucks led the way, others followed, and now offering app-based ordering and payment has become an industry standard.
Cashiers probably won't vanish entirely at most stores, but their numbers will shrink considerably. The advantages of switching to higher-tech solutions in terms of cost and customer convenience simply make it illogical for retailers to keep using people in many of these positions when the resources required -- both human and financial -- could be better deployed elsewhere.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Teresa Kersten is an employee of LinkedIn and is a member of The Motley Fool's board of directors. LinkedIn is owned by Microsoft. Daniel B. Kline owns shares of Microsoft. The Motley Fool owns shares of and recommends Amazon. The Motley Fool has a disclosure policy.
