Cashierless Retail Store Operations and Its Impact on Consumer Consumption Demand

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. This study investigates the impact of JWO technology on consumer demand. The anticipation of no checkout queues, facilitated by this technology, has the potential to alter consumer purchasing patterns. Utilizing a novel dataset that captures consumer behavior before and after the introduction of JWO technology at a major U.S. university, this paper examines its effects on students' consumption patterns. The study is conducted across five convenience stores within the campus, with only three implementing the JWO technology. The findings indicate a significant increase in peak throughput for the convenience stores equipped with JWO. Additionally, the timing of consumer demand shifts noticeably, with students frequenting the stores more often before and in-between classes rather than post-class. The introduction of cashierless technology also influences what items students choose to buy, with an increased purchase proportions of energy and protein bars, and candy — items suitable for quick consumption before or between classes. There is no consistent decrease in any particular product category within students' purchase baskets. These results suggest that managers adopting cashierless technology should consider not only its operational benefits for retail staffing but also its potential to influence consumer behavior and demand patterns.

Keywords: Cashierless Retail, Amazon Just Walk Out, Retail Operations, Basket Composition, Convenience Stores