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The Spoon

Daily news and analysis about the food tech revolution

cashless stores

7-Eleven Is Piloting a Cashierless Store Concept in Texas

7-Eleven announced today it is piloting a cashierless scan-and-go store concept in its hometown of Irving, TX. 

The test store is currently available to 7-Eleven employees and functions much like an Amazon Go store. Users sign into the 7-Eleven app, check into the store, shop, and leave. The store’s system, which 7-Eleven says was built in-house and runs on algorithms and predictive analytics, monitors which items customers take and emails them a detailed receipt after they exit the store.

Items for sale at the concept store currently include a mix of groceries, OTC drugs, snacks, and some non-food items. So basically what you’d find in any other 7-Eleven, minus the hot food items.

Finding ways to create a faster, more frictionless convenience store experience has been a priority of 7-Eleven’s for some time. The chain has its own loyalty program, and in 2019 it launched its 7NOW app to enable delivery of items from the convenience store to non-traditional locations like parks and beaches.

It also launched a Scan & Pay pilot program in 2018 that lets customers scan items with their own mobile phones for faster checkout. At the time, my colleague Chris Albrecht pointed out the highly manual aspect of this pilot program, and noted that Amazon was “light years ahead of its competition” in terms of cashierless checkout that requires nothing more from a user than making sure they’re signed into the app.

This new store pilot, which eliminates the need for users and cashiers to scan items manually, is clearly an effort on 7-Eleven’s part to close some of that technological gap between its own stores and those of Amazon.

7-Eleven hasn’t yet given details on when or where a wider rollout of this store concept will happen. According to the press release, the company is currently taking feedback from employees using the pilot store in Texas, and will iterate and adjust based on that feedback before outfitting other stores, of which there are more than 8,500 in the U.S. alone.

 

Bandit Launches Mobile Order-Only Coffee Shop in NYC

When writing about Bandit, a new coffee shop business that officially opened in New York City today, you have to mention two things. First, that the only way to order your drink from Bandit is through its mobile app. No cash. No card swiping. You pay by app.

This app-only approach then brings up the second thing. Given the current political climate in New York City and other major metropolises against businesses that don’t accept cash, how long can this app-only business model survive?

But before we get bogged down in regulation, let’s talk about what Bandit actually is, because there is something more to it than just the payment system. If all goes according to plan, Bandit will be a chain of coffee shops that use mobile ordering and payment to get you your coffee fast.

Max Crowley, Co-Founder & CEO, Bandit told me that his company mobile-first method was inspired by China’s Luckin Coffee. “We took some core learnings that we saw from them and over the last couple months, we tested and iterated on them,” Crowley told me by phone last week, adding that Bandit customers can get their drinks in as little time as 40 seconds.

On its face, mobile ordering and payment isn’t that innovative; I mean, Starbucks already offers it. But just like its coffee service, Bandit aims to be fast at opening up it stores. Bandit coffee shops are actually self-contained, pre-fab modular components that slot together to create an 11 ft. by 11 ft. store within just about any vacant space. Crowley said that once it has all the components, Bandit can open up a location in a matter of hours.

This standalone store-within-a-store approach should be a boon for Bandit, which doesn’t need to spend a lot of time scouting specific locations or doing buildouts. The whole concept is designed around speed so the company doesn’t have to create comfortable destinations where people hang out. Instead, it can carve out small footprints in high-traffic spaces.

The issue, though, is that even in these high-traffic areas, only people with the Bandit app can partake in its coffee. If you don’t have a mobile phone and a credit card, you’re out of luck.

Going cashless right now seems like a risky move for Bandit. New York City, Philadelphia and San Francisco are among cities that are pushing back against cashless operations that cut out the poor and the underbanked. Even the mighty Amazon relented with its cashierless Go stores and added the ability to accept greenbacks. Sweetgreen backtracked on its no-cash policy as well.

Crowley is aware of the potential issues, but isn’t daunted by them. “Cashless is not the law yet in NY. We’re going to continue to look at that,” he said, “We’ll comply with whatever laws and we certainly want to serve all customers.”

Customers in New York certainly have their fill of innovative options when it comes to getting their morning java. In addition to Bandit’s app-only ordering, Truebird is deploying five robot baristas across Gotham, and GOffee just equity crowdfunded more than a million dollars for latte delivery to your desk in downtown NYC.

Bandit’s first location is located at 466 Lexington Ave, New York. The company is privately funded and plans to open more locations in Q1 of 2020.

Why Philadelphia’s Ban on Cashless Business Is a Good Thing

Philadelphia, PA yesterday became the first major U.S. city to ban cashless stores, The Wall Street Journal reports. A new law will “require most retail stores to accept cash” and goes into effect in July 2019.

The law would not include parking garages, stores like Costco (which require membership) or hotels, according to the WSJ. But it will affect restaurants, grocery stores, and other food retailers, including Amazon Go stores.

Amazon had asked for an exemption for the new law but was told by Philly lawmakers that in order to get one, Amazon Go stores would have to require membership a la Costco. Currently, Amazon’s cashless grab ’n’ go stores are not restricted to Amazon Prime members, as they would have to be if Amazon were to go for an exemption from the new law in Philadelphia.

It’s the latest move in a series of pushbacks over the last several months around businesses going cashless. In NYC, councilman Ritchie J. Torres introduced legislation last November that would require restaurants and retailers to accept cash. New Jersey has passed a bill banning cashless stores earlier this year. Massachusetts has been legally requiring stores to accept cash since the 1970s.

Massachusetts wasn’t concerned about Amazon swallowing up the world when it passed its law over 40 years ago, but the more recent efforts are most certainly in response to the growing number of establishments trying to go cashless. In the food world that includes Sweetgreen, Tender Greens, the Milk Bar, and Dig Inn. And, of course, Amazon, who currently has Go stores in Seattle, Chicago, and San Francisco. Some industry heavyweights have defended the movement towards cashless business, with Union Square Hospitality’s Danny Meyer citing safety as one of the biggest reasons. Meyer also said that “with the growing ubiquity of plastic and mobile payment, many businesses are choosing to eliminate cash from their operation entirely.”

The thing is, mobile payments aren’t ubiquitous yet, and nor are credit and debit cards. Those who are against cashless businesses argue that restaurants and stores only accepting those payment forms exclude poorer communities and those for whom credit cards might not be an option. Councilman Torres went as far as to say that “insidious racism” underlies the cashless model.

According to a survey by Gallup, most Americans “see the death of cash in their lifetimes.” Countries like Sweden are already well on their way to dumping cash, with IKEA even testing a cashless location in Gavle (north of Stockholm). But even a forward-thinking nation like Sweden is dealing with pushback, with some claiming cashless businesses discriminate against the poor, those with disabilities, and newly arrived refugees.

There may be middle ground, and some folks are working to find it. For instance, a company called All_ebt uses a combination of Facebook Messenger and virtual Visa cards to let those on SNAP assistance shop online and even at Amazon Go stores. It’s not a magical fix that will solve all the issues surrounding the cashless model. But if we are in fact headed towards a cashless future, we need more companies and organizations like All_ebt who are willing to use tech to find a way to include everyone in this new movement. Until we get more of those efforts to find middle ground, a citywide ban on cashless business is probably a good call.