CASHIERLESS STORES FOR WALMART1

Cashierless stores for Walmart

Michelle G. Ramirez
ORGL 63CS - MSODL Capstone
University of the Incarnate Word
Dr. Mary Ann Reyes
April 2, 2022
CASHIERLESS STORES FOR WALMART2

Abstract

Over the years, new technologies have focused on improving efficiency in production,

operations, and customer service. One way to create value in the retail industry using technology

is findings ways to reduce the time it takes to checkout of retail stores. People have over the

years become time-sensitive, and they want to spend their time in more meaningful use than

waiting in long queues to be served. Regardless of the checkout lines that have been established

in brick and mortar stores, it is still challenging to ensure swift movement in and out of such

stores. As such, many customers end up spending a lot of time in the store.

Introduction

According to a study conducted by Business Wire (2019), a business-based media

company, 92% of Americans experience frustration when shopping from brick and mortar stores.

Reports indicate that Walmart customers wait in line for extended periods to be served,

especially during special seasons or holidays, thus impacting the quality of the company’s

customer service adversely. Such frustrations stem from various issues, including waiting in line

for extended periods to be served or making transactions for the selected goods. However, digital

technology offers opportunities for retail firms to operate cashierless stores and improve

throughput. Cashierless stores operate through cameras and IoT sensors that automatically detect

the items picked from retail shelves and automatically compile their prices. The technology

exploits deep learning and computer vision to improve customers’ experiences with cashierless

stores. However, customer must have their smartphones to facilitate cashierless shopping and

pay for goods selected from the shelves. In most cases, customers’ credit cards are linked to the

system such that deductions are automatically made and digital receipts are provided as
CASHIERLESS STORES FOR WALMART3

customers exit the store. Therefore, this technology can improve time efficiency in the shopping

process by reducing the time it takes for Walmart customers to pick items from the shelves and

walk out of the stores.

Description of the Problem

The project proposes a solution to address the long waiting lines in Walmart stores, which

impacts customers’ experiences negatively. Reports indicate that 92% of customers develop

frustration when shopping in brick and mortar stores. Multiple reports indicate that Walmart

customers tend to wait for extended periods in line to be served, thus leading to time wastage in

such stores. This problem primarily stems from the extended periods that customers have to wait

to be served or their goods processed at the cashier. As a result, there are often many people in a

store within a given period because the process is slow. This occurrence promotes chaos within

such stores, making it challenging for customer service providers to focus on customers. This

occurrence impacts customers’ experiences negatively while compromising the company’s

brand. As such, it compromises the ability of Walmart to compete effectively. While assessing

the company’s competitive environment, it emerged that competitive rivalry was a strong threat

to the company. The company experiences stiff competition from Amazon, Costco, Rakuten,

Sears Holding Corporation, and Target among others. It also faces stiff international competition

from firms such as Tesco and Marks and Spencer. The high competition gives customers more

bargaining power than the company by making it possible for them to switch from Walmart to

other retailers. To compete effectively, Walmart needs to improve its customer service.

Cashierless stores provide an opportunity for the company to improve customers’ shopping

experiences. Therefore, cashierless stores will improve customers’ experiences by reducing the
CASHIERLESS STORES FOR WALMART4

time they spend in Walmart stores. This value will be a strong point of differentiation between

Walmart and its competitors.

Literature Review

Reports indicate that customers wait in line for longer periods in Walmart to be served

due to an inefficient checkout process. While assessing problems at Walmart, Reich (2017)

observed, “In the aggregate, the price of waiting certainly adds up: some estimate that Americans

spend 37 billion hours waiting in line every year, or 115 hours per person” (p.75). It means that

the company’s customer service and checkout process are compromised by the reliance on

traditional processes. The traditional process is inefficient as it holds customers in line for

extended periods, thus leading to a wastage of time in the line. While interviewing Walmart’s

CEO in 2017, Doug McMillon, Harvard Business Review (2017) Harvrevealed that customers

spend a lot of time in stores, and that impacts their experiences negatively. The CEO

acknowledged that customers want to save time or spend less time in Walmart’s stores. While

assessing Walmart’s poor fiscal first-quarter earnings in 2015, CNBC (2015) attributed this poor

result to negative customer experience among other issues. It was noted that customers wait in

line for extended periods, thus impacting their experiences adversely while compromising the

company’s productivity. To date, the company is yet to address this problem.

Cashierless stores hold the potential to address this problem effectively. While assessing

cashierless store as an innovation, Gazzola et al. (2022) observed that such stores reduces human

contact as much as possible and allows customers to enter and exit stores as quickly as possible.

By reducing human contact, such stores use efficient automated processes to address customers’

needs, thus resulting in time efficiency. Schögel and Lienhard (2020) observed that one of the

major sources of frustration for customers when shopping from brick and mortar stores is the
CASHIERLESS STORES FOR WALMART5

long checkout experiences. Customers spend a lot of time in queues waiting to be served. The

study indicated that chashierless stores streamline the shopping and checkout experiences. As

such, it ensures that customers as minimal time in the store as possible. This technology gives

retail stores greater control over the flow of customers than before. Reports indicate that Amazon

has already implemented this technology. Amazon’s stores with this technology are called

Amazon Go to differentiate them from traditional stores (Ives, Cossick & Adams, 2019). While

evaluating Amazon Go, Polacco and Backes (2018) revealed that many customers who had

shopped in such stores perceived cashierless technology as time-saving. As it limits human

contact, processes are automated, meaning that they are fast and efficient. Because chashierless

store is a relatively new technology and experience, few studies have examined it exhaustively.

As such, the information provided in the literature is not enough to make an informed decision.

Description of the Project

A hybrid research design incorporating qualitative and quantitative design will be used to

study cashierless store innovation and its suitability in addressing Walmart’s customer experience

problem. This hybrid syste will promote flexibility in the choice of data collection instruments.

Subsequently, interviews, surveys, and content analysis will be used to collect data on the study.

Thirdly, content analysis will be used to analyze the collected data. This method works by

grouping pieces of information thematically. The proposal will be presented to the ethical review

committee to obtain permission to collect data through interviews and surveys. To assess the

outcome of the project, the study will be subjected to peer review to determine the quality of the

process and findings, as well as assess whether objectivity was held. The following Gantt chart

explains the timeline of the project.

References

Business Wire. (2019). Omnico: 92% of U.S. Consumers Frustrated When Shopping in Store.

https://www.businesswire.com/news/home/20190808005419/en/Omnico-92-of-U.S.-

Consumers-Frustrated-When-Shopping-in-Store

CNBC. (2015). Walmart knows it has problems; how it plans to fix them.

https://www.cnbc.com/2015/05/19/wal-mart-knows-it-has-problems-how-it-plans-to-fix-

them.html

Gazzola, P., Grechi, D., Martinelli, I., & Pezzetti, R. (2022). The Innovation of the Cashierless

Store: A Preliminary Analysis in Italy. Sustainability, 14(4), 1-16.

Harvard Business Review. (2017). “We Need People to Lean into the Future.”

https://hbr.org/2017/03/we-need-people-to-lean-into-the-future

Ives, B., Cossick, K., & Adams, D. (2019). Amazon Go: disrupting retail?. Journal of

Information Technology Teaching Cases, 9(1), 2-12.

Polacco, A., & Backes, K. (2018). The amazon go concept: Implications, applications, and

sustainability. Journal of Business and Management, 24(1), 79-92.

Reich, A. (2016). Walmart’s consumer redlining. Contexts, 15(4), 74-77.

https://journals.sagepub.com/doi/pdf/10.1177/1536504216685128

Schögel, M., & Lienhard, S. D. (2020). Cashierless stores–the new way to the

customer?. Marketing Review St. Gallen, 1-5.