7-Eleven tries out an Amazon Go-like store

Discussion
Photo: 7-Eleven, Inc.
Feb 07, 2020
George Anderson

Convenience store giant 7-Eleven has announced it is testing a “cashierless” concept at its corporate headquarters in Irving, TX.

The 700-square-foot, non-traditional store currently stocks some of the chain’s most popular food, drink and non-food products. The pilot program is only open to company employees who use 7-Eleven’s mobile app to check into the store, pay for items and receive their receipts.

“Ultimately, our goal is to exceed consumers’ expectations for faster, easier transactions and a seamless shopping experience,” said Mani Suri, 7-Eleven senior vice president and chief information officer, in a statement. “Introducing new store technology to 7-Eleven employees first has proven to be a very productive way to test and learn before launching to a wider audience. They are honest and candid with their feedback, which enables us to learn and quickly make adjustments to improve the experience.”

The company says it is using proprietary “algorithms and predictive technology” to identify the market baskets of individual customers. 

Mr. Suri sees the development of the cashierless store as part of 7-Eleven’s broader corporate strategic objectives.

“This in-house, custom-built technology by 7-Eleven engineers is designed for our current and future customers,” he said. “We continue to innovate, and coupling fresh, innovative, healthy food options with a frictionless shopping experience could be a game-changer.” 

The pilot store is being held up by 7-Eleven as one of many ways the convenience store brand is innovating. Joe DePinto, president and CEO of 7-Eleven, pointed to the company’s 7Rewards loyalty platform, its 7NOW on-demand delivery and mobile checkout pilot as examples of digital innovations that are transforming the experiences of customers across the U.S. 

The cashierless prototype is not the first for the 7-Eleven brand. The Japanese-owned chain began testing a similar concept in Tokyo in 2018 as a result of a severe labor shortage in the country.

Interest in cashierless technologies, particularly in the convenience channel, has increased since Amazon.com launched its Go convenience store concept to the public in 2018.

DISCUSSION QUESTIONS: Do you think there is a real future for cashierless stores in the convenience store channel? Will 7-Eleven’s commitment to digital technologies be a point of competitive difference for the banner going forward?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"In addition to being the leading innovators in the space, 7-Eleven has the respect and credibility needed to make things happen in this extremely tight knit community."
"Hopefully they went to school on what worked and didn’t work at Amazon Go so they avoid mistakes and improve the experience."
"Cashierless stores will be part of the retail landscape in the future for two reasons – cost of labor and convenience."

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19 Comments on "7-Eleven tries out an Amazon Go-like store"


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Mark Ryski
BrainTrust

Yes, I believe there is a future for cashierless stores in convenience as there will be in other retail segments eventually. While the benefits of cashierless technology are apparent, I’m still not yet convinced that the technology is ready for mass use. The technology is still expensive and is far from foolproof. That said, I do think this is just a matter of time, and I like 7-Eleven’s assertive move into cashierless technology and other digital technologies.

Richard Hernandez
BrainTrust

Ahold and a few others are bringing about the advent of the frictionless store. Most locations are small because the technology is still pretty cost prohibitive for most retailers. As the technology expands to the larger supermarket retailers, I see a mix of scan and go, self checkouts, and manned checkout lanes (I do not see a complete removal of these – too many people like the interaction with people).

Patricia Vekich Waldron
Staff

Given that cashierless (should) equate to (more) convenience, companies like 7-Eleven would be well served to offer this service to customers – provided they get can find cost and capabilities that can scale.

Dave Bruno
BrainTrust

Honestly, I am not convinced that consumers are clamoring for cashierless convenience stores. I have not heard much of an outcry about long wait times for morning coffee and donuts. And beyond reduced wait times, I don’t really see much benefit to the shopper. The question, then, is whether the retailer benefits from detailed basket and shopping behavior analytics justify the big costs. I am not so sure they do in the convenience store, but other commenters here with deeper expertise in the category may disagree.

Art Suriano
Guest

I think there’s a future for cashierless stores everywhere, not just convenience stores. It’s more a matter of when, not if. We have become a very impatient society that demands instant gratification. If I can make the purchase online in a couple of minutes, why can’t I pay for the item in the store as quickly? So the demand is there. Whether in the future it’s an app or some type of tracking system in the store that monitors the purchases supported by a customer’s thumbprint or retina scan is yet to be determined. But in time, there is no doubt that all cash will cease to exist.

Along with that, in time we’ll get tired of carrying a wallet full of credit cards and that too will become a smoother process. So 7-Eleven is wise to test and most likely introduce this new technology, and once perfected I would expect them to roll it out to more stores until they reach the whole chain. Other retailers will follow.

Suresh Chaganti
BrainTrust
Suresh Chaganti
Co-Founder and Executive Partner, VectorScient
9 months 18 days ago

Kudos to 7-Eleven for innovation and not waiting for too long, or for others like Amazon to set the pace. Developing algorithms and technology in-house is even more impressive. That means this technology could be a source of differentiation and points to the fact that they can react quickly to tech disruptions.

Steve Montgomery
BrainTrust

For cashierless checkout to work in a c-store there are legal and other obstacles that will have to be overcome.

One is the question of how to handle age restricted items such as nicotine delivery devices and alcoholic beverages.

Another is all the rules and regulations regarding fueling. Today there are rules in place that require a cashier to have sight lines to the dispensers and access to an emergency shutoff switch. The systems will also have to be able to handle foodservice items. The final consideration is the cost to implement and maintain the technology.

Cathy Hotka
BrainTrust

This pilot should provide 7-Eleven with some valuable learnings, but the price point of the merchandise makes me question whether the infrastructure cost can provide profits.

Ken Cassar
BrainTrust
Ken Cassar
Principal, Cassarco Strategy & Analytic Consultants
9 months 18 days ago

This is a smart move for 7-Eleven. Profits from this store will undoubtedly not cover the tech development costs, but it allows them to hone important AI/Machine Learning/Computer Vision skills, observe consumer response, and create an informed strategy for what’s next. And I do believe that cashierless checkout is the future in the convenience sector.

Bethany Allee
BrainTrust

The c-store channel is near and dear to my heart. It is also antiquated. A commitment to digital technologies is a competitive difference that is currently causing massive disruption in the channel. In addition to being the leading innovators in the space, 7-Eleven has the respect and credibility needed to make things happen in this extremely tight knit community.

Lee Peterson
BrainTrust

Didn’t NYC just pass legislation that stores have to take cash? You can expect more of that in urban settings. So given that, I’d say this is the future of many C-stores, but certainly not all. And personally, I see someone like 7-Eleven rolling out WAY more of these than Amazon. The 900-pound Seattle gorilla likes to dabble and learn, but a massive physical footprint? Not so much, they’re smarter than that.

Harley Feldman
BrainTrust

Cashierless stores will be part of the retail landscape in the future for two reasons – cost of labor and convenience. The demand for cashierless stores will be the highest for everyday items in dense consumer areas. More and more prepared food items will be added to the store inventories.

7-Eleven’s commitment to digital technologies will be a competitive advantage. Some of their ideas are getting to be table stakes in the convenience market — frictionless shopping experience, healthy foods, and predictive analytics.

Richard J. George, Ph.D.
BrainTrust

This concept of a cashierless convenience store is certainly not a new one. The current 7-Eleven test is the latest foray into this space. Recall a few years ago, Kroger offered kiosks that provided customers with the chance to grab and go with many convenience items. In 2017, both China and Japan introduced cashierless stores. In China, the spread of cashier-free shops came in the context of an online retailing boom, while in Japan the industry was seeking ways to cope with a worsening labor shortage. The U.S. experience is all about convenience. It will be interesting to watch if this latest innovation satisfies the convenience quotient.

Brandon Rael
BrainTrust

The convenience store segment is a prime place to experiment with Amazon Go-like stores. While there is significant potential in this space, the cashierless technologies are still relatively in their infancy stages and require a significant upfront investment. There certainly is the “cool factor” of waving your app while you walk in and walking out with the product without having to use your credit card, cash or mobile app to pay.

Key to 7-Eleven’s strategy is to really qualify and quantify the success measures at this innovation testing ground. Are there truly incremental cost savings, gained efficiencies, increased conversion and increased margins that will come out of this experiment? There ultimately has to be a financial benefit to this innovation lab before scaling this model out beyond its headquarters.

Zel Bianco
BrainTrust

Mr. DePinto’s decision to tackle this is a good idea and especially, as other BrainTrust members have pointed out, sooner than other retailers. Hopefully they went to school on what worked and didn’t work at Amazon Go so they avoid mistakes and improve the experience. I worry that the human contact that most of us expect when walking into a store will be missed, especially in rural and suburban areas where it may be one of the few places to have interaction with neighbors. So in other words, it’s a little spooky!

David Naumann
BrainTrust
David Naumann
CEO and President, Cogent Creative Consulting
9 months 18 days ago

Eventually, cashierless convenience stores will be pervasive, but today it is still a novelty and way for companies like Amazon and 7-Eleven to tout their innovation. The economics of cashierless stores are still a challenge. This is likely the reason why Amazon is not on track to open 3,000 Amazon Go stores by 2021 as projected back in September 2018. There are currently 26 Amazon Go stores in four markets.

While a commitment to digital and innovative technologies is a competitive differentiator today, if they are further along the maturity curve when customers begin to expect cashierless stores, it will be competitive advantage.

Gib Bassett
BrainTrust

When you think about a typical convenience store shopping mission, this is brilliant. Last minute, unplanned, and on the go probably describes the common consumer need. Convenience is defined as “the state of being able to proceed with something with little effort or difficulty.” This all being the case, and competition for walletshare only intensifying, removing as much friction and speeding the buying process is arguably imperative:

“Shopping in the new cashierless 7-Eleven store is simple. To test the store, employees download an app, sign up, check in at the store, enter the store, shop and exit. A detailed receipt appears in the app automatically after the customer exits.”

Of course collecting the data for understanding consumer behavior helps tailor other elements of the CX, but the focus here is most clearly on meeting a high value unmet customer needs IMO.

John Karolefski
BrainTrust

If cashierless technology will work anywhere, it will be in convenience stores. 7-Eleven is wise to test the solution before deploying it to real stores. Questions: Will the cost of the technology justify the “convenience” of such a store? Are C-store shoppers asking for such stores? Finally, I do not believe cashierless technology will ever succeed in mainstream supermarkets — too many SKUs, too much bagging by shoppers, too costly for grocers.

Craig Sundstrom
Guest

So much of convenience stores’ sales are tied to age-restricted items (that need a cashier) that I don’t see this as viable … kind of like a dairy that only sold 2% milk. That having been said, management is aware of this, so they must disagree.

wpDiscuz
Braintrust
"In addition to being the leading innovators in the space, 7-Eleven has the respect and credibility needed to make things happen in this extremely tight knit community."
"Hopefully they went to school on what worked and didn’t work at Amazon Go so they avoid mistakes and improve the experience."
"Cashierless stores will be part of the retail landscape in the future for two reasons – cost of labor and convenience."

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