Can a grocery store operate with no cashiers?
The concept isn't completely outlandish — many stores already have a few self-checkout lanes, and the Amazon Go concept demonstrates how to operate a whole store this way — but grocery stores serve a wide range of consumers who are very much set in their habits. This means balancing the needs of traditional, check-writing shoppers with those of impatient, digitally savvy customers.
Many retailers are watching Amazon Go as a test case for their own innovations. But from the perspective of Kroger payments chief Kathy Hanna, it's Amazon that can learn from her.
"It's a very interesting idea," said Hanna, senior director of Enterprise Payments & Store Support for the Cincinnati-based grocery chain and one of PaymentsSource's 2017 Most Influential Women in Payments. "They're all trying to do what we are already doing, which is using digital to make it faster and easier to shop. They're just taking a different approach."
Kroger's been adding online tools at a rapid pace over the past year. The company's Kroger ClickList enables people to order groceries online, choose a pickup time and retrieve items at the store. But it's not skimping on the personal touch. A store employee greets the shopper and helps load the groceries.
"ClickList makes it easier for customers to engage with us," Hanna said. "They are extremely busy and have children and parents, jobs, etc. The digital platform helps make the grocery experience a lot easier."
Consumers pay at the point of pickup, though Hanna said Kroger is developing an online payment option, which is already active in a few stores. ClickList is live at more than 300 stores, with more expansion coming each week and expected throughout the next year. "We want to make that smooth as it ties to our loyalty program," Hanna said.
And there you have it: The cashier-free grocery shopping experience.
The process gives Kroger an e-commerce feel at a time when grocery stores are accelerating their move online. The bigger threat from Amazon isn't Amazon Go but AmazonFresh, the e-commerce giant's online grocery service. AmazonFresh launched near Seattle in 2007 and has been picking up steam, adding Boston, Northern Virginia, Baltimore, Chicago, Dallas and London in the past year. It's also available in Los Angeles, San Francisco, San Diego, New York, Philadelphia and Sacramento.
Other online grocers are encroaching on the traditional market, including FreshDirect, a New York-area online supermarket that last year partnered with Samsung to embed grocery shopping into the tech company's web-connected Family Hub line of refrigerators. ShopRite, another traditional supermarket chain, is also embedding online ordering into Samsung's refrigerators. Samsung has additionally signed Mastercard to power payments for its web refrigerators.
The hook of most of these initiatives is the repeat order and memory. Consumers tend to order many of the same items each week, so the online order is saved and can also be paired with coupons or suggestions for other purchases.
As payments and grocery shopping give way to omnichannel order memory, the pressure's on for Kroger to stay ahead of the pace of innovation.
"Kroger is following what its competitors are doing," said David Livingston, a supermarket industry analyst. "With such a large market share in the U.S. they can't afford to fall behind too long."
Kroger's online service also stores and tracks orders to make repeat shopping easier and embeds with marketing programs for expanded sales and service, making it a dynamic app, according to Hanna.
"It's still early on with ordering groceries from web connected appliances to know how that's going to turn out," Hanna said of how Kroger will ultimately mix with 'Internet of Things' initiatives. "We've seen washers and dryers and now refrigerators, we're not sure what's going to take hold."
Hanna's ties to Kroger couldn't be deeper. She's been in her current job for seven years, but that's just part of her story. Hanna worked in accounting and treasury posts for years, and has held other jobs at Kroger dating to the early 1980s.
These experiences have given her a deep history and knowledge of all things Kroger, a knowledge fed by “The Kroger Story,” a book about the life of Barney Kroger, the chain's founder. Kroger's "humble beginnings" are an inspiration for Hanna.
"I spent five years in the stores, when I first started my career at Kroger," said Hanna, who graduated from Tennessee Technological University in 1986 with a degree in business and accounting. She also holds a Doctorate of Jurisprudence, Law from the Nashville School of Law. "I worked as a bagger [and] a cashier, learning the operations of the store. Then I spent many years in the accounting department."
At each stop, there were professionals who mentored her and put her in position to help Kroger meet the challenge she faces today as the grocery industry and Kroger embrace the change brought about by mobile apps, digital payments and omnichannel shopping. And leading her staff through the changes as well.
"The pace of change is sometimes too fast and other times too slow," Hanna said, adding either way can lead to unexpected consequences that can negatively affect customers’ experience or associates’ work. "My younger colleagues have an aptitude for change and even a desire for rapid change at times that far exceeds our more established teammates. While I think that is normal, I’ve found that it helps me as a leader to encourage my organization to move more quickly to meet their needs."