26 Oct 2021
Posted in Thematic Research
Tesco’s late entry into checkout-free race won’t stop it reaping rewards as ‘ambient commerce’ is future trend of in-store retail, says GlobalData
- Tesco’s entry to the UK’s checkout-free retail race, through partnership with disruptive in-store tech provider Trigo, allows it to compete with Amazon, Morrisons, and Aldi to grab a greater share of the UK’s in-store food and grocery retail market, set to be worth $196bn by 2025
- Checkout-free stores are generating a social media buzz – over 1,500 posts on Twitter and Reddit in the past year
- As COVID-19 and flu cases rise over the UK’s winter months, the adoption of checkout-free stores will accelerate, and retailers such as Tesco will reap the rewards, as customers and retailers realize the advantages of contact-free shopping
Tesco’s checkout-free store GetGo is a smart move aimed to allow it to become a leading player in the in-store food and grocery retail market – set to reach £196bn by 2025, according to GlobalData forecasts. The leading data and analytics company notes that, as Tesco is already well equipped to benefit from the popularity of online shopping and is trialling an on-demand service, checkout-free offerings will simply complete the trinity. While it has been slow to enter the checkout-free race, GlobalData notes that the move could be well timed, as the impacts of COVID-19 accelerates the adoption of ‘ambient commerce’.
Jemima Walker, Associate Thematic Analyst at GlobalData, commented: “Checkout-free retail, also referred to as ambient commerce, allows customers to walk straight out with the items they want as a range of technology tracks their movements and automatically charges their accounts. There is a real chance for success in the UK for checkout-free stores, as evidenced by the rapid adoption of self-checkout technology in recent years. Retailers that do not jump on the growing trend may find themselves falling behind, and Tesco has ensured it is not a party to this failure.”
The new GetGo store in the heart of London places Tesco in direct competition with the six Amazon Fresh stores dotted around the capital, Aldi’s Greenwich store and Morrisons’ Bradford store – all using a ‘grab and go’ model.
Walker continues: “Leaders in food and grocery retail are already operating checkout-free stores globally, with the most action in the US and APAC, and these openings are promoting a buzz on social media. According to GlobalData’s social media analytics platform, there were over 1,553 posts across Reddit and Twitter in the last year related to ambient commerce*. We’re seeing global adoption, and continued innovation, with advancements in checkout-free technology being implemented in the smallest to the largest of venues, from a festival pop-up shop to a shopping mall.”
The adoption of checkout-free stores has accelerated since the beginning of the COVID-19 pandemic in the form of contact-free shopping. As the UK enters the winter months, influenza, common cold, and COVID-19 cases are likely to rise, and increase this adoption.
Walker adds: “According to GlobalData forecasts, the UK has seen a 7.1% change increase in the number of COVID-19 cases in the last 15 days – a much higher value than that of the global change of 2.4%.
“As the UK enters yet another winter of pandemic-induced stress, both the consumer and the retailer will acclimatize and realize the benefits of contact-free, frictionless shopping.”
* 18 October, 2020 – 18 October, 2021