Just Walk Out, Just in Time: How Cashierless Technology Shifts When and What Customers Buy

Abstract

The proliferation of cashierless retail convenience stores, particularly in high-traffic locations such as airports and sporting events, is becoming increasingly prominent. A notable implementation of this technology is Amazon's Just Walk Out (JWO) system. The anticipation of no checkout waiting time, facilitated by this technology, has the potential to alter consumer purchasing patterns. We utilize a novel dataset of detailed transaction baskets from a major U.S. university, across two academic years before and after the introduction of JWO technology, to examine cashierless technology's effect on student consumption patterns. A unique benefit of this empirical setting is the university follows a standardized class schedule, enabling us to identify effects on customer shopping behavior relative-to-class times. We find that all of the cashierless stores experience a substantial temporal shift in the distribution of demand towards before-class intervals. We estimate a peak relative increase of 13% in the 5-10 minutes before classes start. We also find a corresponding change in the basket composition of this increased before-class demand. Beverages, cafe items, and pantry items like energy and protein bars have increased purchase rates, while the rate of frozen and produce items sold decreases. These increases coincide with items suitable for convenient consumption before classes. Lastly, as a mechanism test to disentangle the dual benefits of cashierless technology of zero checkout times and reduced cashier social interactions, we observe a large increase in sales of sensitive personal items at cashierless stores, such as a 164% increase in condom sales, but these items have no temporal shift in before-class demand. Our findings suggest that cashierless technology not only benefits staffing costs, but also has potential to influence customer shopping behavior. More broadly, our findings shed light on the elasticity of demand with respect to transaction cost reductions introduced by a new digital technology. 

Keywords: cashierless retail, retail technology, basket composition, Just Walk Out, waiting time, sensor and image recognition technology