Why Don’t More Grocers Start Offering Smart Carts

This article is brought to you by Retail Technology Review: Why Don’t More Grocers Start Offering Smart Carts.

By Ted Phillips, freelance writer.

Smart carts were first introduced years ago but have yet to become a staple at local supermarkets. Today, it seems that smart carts are finally on the cusp of going mainstream, as various leading startups operating in the space tackle the key roadblocks to adoption.

When smart carts were first introduced, it seemed like a no-brainer for grocery stores to adopt them. Surely, customers would love the idea of being able to walk out of the store without needing to wait in queues to pay.

Yet here we are, a few years later, and adoption has only just started to accelerate. While the pandemic might have been the perfect opportunity for larger grocers to introduce smart carts to reduce contact between shoppers and employees, the truth is that most tech adoption since Covid lockdowns started being instituted in early 2020 has focused on ecommerce and delivery automation. Innovation with in-person retail is only now regaining the momentum it had late in the previous decade.

There are several reasons why smart carts haven’t become a common sight and several startups and industry experts are working on ways to change this.

High upfront investment

Like many other new technologies, smart carts are expensive because suppliers must try to recoup their vast R&D spending and fund their growth.

Smart carts cost between $5000 and 10000 each, which is 50-100x the cost of a typical metal cart. It’s not a decision the grocers will make lightly if they need at least a few dozen to ensure all customers are covered in busy periods.

Hesitation is understandable in these circumstances especially when the evidence supporting a return on investment was still early. Now there are more studies proving smart cart effectiveness such as a Stripe study of Veeve’s smart cart. The payment processing infrastructure tech company found the average basket size increased by 70% once smart carts were introduced, which gives grocers numbers they can make a business case with.

As more of these case studies emerge, more grocers will be willing to invest.

The need for indoor storage space

Metal shopping carts have stood the test of time because they are so resilient. There’s no issue with leaving them outside in any weather conditions. If a grocer loses a few to vandals, the replacement cost means it’s only an inconvenience.

Most smart carts are far more susceptible to weather damage, though, and they need to be kept locked away because of their high value. This creates a problem for grocery stores, where floor space needs to be dedicated to smart carts. This directly impacts the number and variety of products they can sell.

The latest version of Amazon Dash Carts is more weather-resistant than previous generations, but this feature is still only designed to allow shoppers to take the carts to their cars for easier unloading – not for overnight outdoor storage.

Shopic solves this problem by providing a clip-on device, which essentially upgrades a typical analogue shopping cart to a smart one. Grocers can store their cheaper and more durable carts outside and have a small dedicated charger wall space inside, where shoppers can pick up the clip-on, which comes equipped with computer vision cameras and a touchscreen. Technology like this removes a major barrier to wider smart cart adoption.

People want people to solve their issues

While on paper, disruptive technology might sound like an obvious solution, sometimes the reality is more complicated. Self-checkout machines were supposed to bring an end to cashiers, but the amount of friction they cause has made them a common source of frustration.

Self-checkout machines are hated because of how much user experience friction is involved – some 67% of shoppers say that they’ve experienced failures with self-checkout stations.

Grocers are weary of implementing more complex “computer vision”-based solutions, in case there’s a similar backlash. Even if they are convinced of the mathematical return on investment, they also need to think about the logistical issues. While all smart cart companies would hope to have a perfectly running system, the reality is, it can take time to get there.

When something does go wrong in a self-checkout system, grocers have learned the importance of having a member of staff nearby to help out. When rolling out smart cart systems, grocers will need a wider plan, including training their staff on how to deal with any issues. In the long run, as the technology improves and customers become savvier, fewer staff will be needed.

Competing technologies

The final major reason why more grocers don’t use smart carts is that it’s not been clear what the future of retail will look like. While the smart cart technology is impressive, there are also cashierless solutions like Trigo.

The “just walk out” approach uses cameras around the store to detect what people take off the shelves rather than what they put into their carts. Grocers could be forgiven for believing customers would prefer this and want to wait until the providers had matured their offers. When grocers are unsure what technology will become the new standard, it makes sense for them to delay making a decision.

Yet the reality is, this approach might be too much of a leap to take at once. Setting up cameras around a store can be highly expensive and also trigger privacy concerns. While customers like the idea of just walking out, they aren’t necessarily fans of surveillance capitalism.

There is significant innovation within the smart cart sector itself too. Even if a grocer believes these are the future, they must decide which type of smart cart to go for. Different grocers are now adopting tech of different types. Only time will tell what deployments will be the most successful. Other grocers will be watching closely, though.

Final thoughts

Smart cart technology arrived with a lot of hype, but this died down not long after. Today, as the tech and business models for these solutions have matured, grocers have greater choice. Shopic for example tackles the issue of the need for indoor storage space. Other options, like Trigo, now appear further behind the smart cart space.

Critically, the risk some grocers have taken with being first movers with the technology will help provide data. This allows grocers to build business cases and best practices for implementation, making the prospect less scary. The high upfront cost is still a problem for many, but if the increase in basket sizes is reliable then grocers may feel the investment is worth it, and subscription-based “smart carts as a service” models can help alleviate the burden.

We are likely to find smart carts far more commonplace in grocery stores in the not too distant future.