Frictionless shopping: How smart retail is reshaping the customer experience

Gavin Allen: What does the future of smart retail look like?

Dr. Stephan Rüschen: In the future, a lot of retail functions will be handled by AI: pricing, marketing, product selection, and even store layout. In-store cameras will analyze customer behavior to optimize how products are displayed. We’re also moving toward automated checkout systems—traditional cashiers are becoming a thing of the past.

Gavin Allen: No more human cashiers?

Dr. Stephan Rüschen: Correct—no staff in the store at all. Customers enter using a credit card or app (for theft prevention), choose their items, pay digitally, and leave.

These unmanned stores are emerging especially in rural areas where there’s no longer a local butcher or bakery. They also allow for 24/7 operations, which benefits customers and boosts retailers’ sales without requiring extra staff.

Gavin Allen: It’s a growing trend in Germany?

Dr. Stephan Rüschen: Yes, it’s expanding quickly. We now have more than 730 of these stores using various technologies, and a new one opens every two days.

In the food sector, RFID is being used in innovative ways. Some butcher shops let customers scan items and pay with an app—there’s no need for physical checkout hardware. This is especially attractive to farmers and small-shop owners looking for affordable solutions.

Gavin Allen: And connectivity is critical to making all this work?

Dr. Stephan Rüschen: Absolutely. Without a reliable connection, an unmanned store can’t function. You need connectivity for transactions, theft prevention, inventory tracking—everything. Cameras must detect whether a customer scanned all items, and if something goes wrong, the system needs to flag it immediately—not hours later, when the customer is long gone.

All systems—from inventory to checkout to surveillance—need to be seamlessly connected and operational 24/7. It’s not enough for the system to work 95% of the time. It has to be 100%.

Gavin Allen: What are the biggest challenges in transitioning from traditional retail systems to smart retail?

Dr. Stephan Rüschen: One major challenge is staffing. It’s becoming harder to find people willing to work in brick-and-mortar retail. At the same time, retailers face fierce competition from online platforms that often deliver a better customer experience.

Another key issue is data quality. If your input data is bad—what we call GIGO, Garbage In, Garbage Out—no AI system can help you. The output is only as good as the input.

There’s also resistance to change, both among employees and customers. Staff may be hesitant to adopt new systems, and customers don’t always welcome innovation, even if we think it’s a good idea.

Gavin Allen: Can you give an example?

Dr. Stephan Rüschen: Take Amazon Go stores. They use AI to let customers just walk out with their items—no checkout, no lines. The first store launched in Seattle in 2016, and the concept came to Europe in 2021.

You scan the app, grab what you want, and walk out. The system automatically charges your account—what they call “Just Walk Out” technology. It’s the ultimate in frictionless shopping.

But some customers felt uneasy. They missed human interaction. Others were uncomfortable not knowing what was on the bill until later. If you find an item in your bag that’s not listed on the invoice, are you going to be accused of theft?

Gavin Allen: Or worse, be charged for something you didn’t buy...

Dr. Stephan Rüschen: Exactly. And that’s easy to fix—you just request a refund. But the concern remains: has the customer lost control?

Also, not everyone wants to download an app. So, the industry had to rethink the experience. In many cases, “Just Walk Out” was replaced with a model where customers use a credit card to enter, select their items, and then view their purchases on a terminal before completing payment. It’s not as seamless as before, but it gives customers more transparency—and they prefer it.

Gavin Allen: How successfully are retailers making the shift to smarter systems?

Dr. Stephan Rüschen: Retailers are practical. Their first question is: “What’s the economic impact?” If the data shows clear benefits, they’ll test it. If it works, they scale up quickly.

That said, implementation takes time. Even once a solution is ready, it typically takes 6–8 months to roll it out, because you have to involve employees and bring them along in the process.

Gavin Allen: What smart retail technologies are still underused or undervalued?

Dr. Stephan Rüschen: One is store ordering. It’s already automated, but AI makes it far more accurate.

Pricing is another area. In food retail, pricing is often dictated by the competition. If Coca-Cola is €0.89 at a nearby store, you have to match it, no matter what your system recommends. So AI’s pricing role is limited in that context.

But assortment planning offers huge potential. Right now, it’s nearly impossible to manually manage 600 stores with 600 different assortments. AI can do that efficiently and profitably, adapting to each store’s unique demands.

Marketing is also ripe for transformation. In Germany, food retailers still send out 29 million printed flyers per week. It’s expensive and outdated. Digital marketing—through Instagram, YouTube, or personalized notifications—is more targeted and cost-effective. But measuring campaign performance across channels is tough. AI can help determine what mix delivers the best results.

Gavin Allen: Beyond marketing, how is AI changing the customer experience?

Dr. Stephan Rüschen: I haven’t seen many VR or AR applications that are widely used, but data already improves the customer experience. It enables better product assortments, more relevant promotions, and smarter pricing. It’s not a dramatic transformation—it’s the small, invisible improvements that make people shop more often and more confidently. That’s a clear win for the retailer.

Gavin Allen: And on the logistics side—how is smart tech improving operations?

Dr. Stephan Rüschen: Again, data is key. Better forecasting means fewer delivery trucks, but fuller ones. Routes can be optimized, reducing fuel use and emissions. The result is greater operational efficiency and a positive environmental impact. It’s a win-win.