Ex-Walmart exec says theft helped kill Walmart's cashierless checkout technology

Walmart

Theft was a major problem with Walmart's Scan & Go app.

• A former Walmart executive said shopper theft was a major reason why the company killed Scan & Go, a cashierless checkout technology, several months after expanding it to more than 100 stores.
• "You think that the theft is bad on self-checkouts? Wait until you try Scan & Go, where nobody is watching the customers out in the aisles," said Joel Larson, who was Walmart's head of checkout innovation until October.
• A customer tried to leave a Walmart store with a cart of about 100 items, only 40 of which were scanned with Scan & Go, Larson said.
• Walmart recently rolled out a new mobile checkout program called Check Out With Me that enables roaming Walmart employees to process customers' payments using handheld devices made by the San Francisco company Innowi, which Larson joined after leaving Walmart.

A former Walmart executive said shopper theft was a major reason why the company killed Scan & Go, a cashierless checkout technology, several months after expanding it to more than 100 stores.

"You think that the theft is bad on self-checkouts? Wait until you try Scan & Go, where nobody is watching the customers out in the aisles," said Joel Larson, who led Scan & Go as the head of checkout innovation at Walmart, before leaving the company in October.

Walmart representatives have previously discussed the decision to end the program and cited problems such as low customer adoption rates and various errors.

"We found too many errors in the process ... making sure people were scanning things right, multiple quantities, that sort of thing," Walmart CTO Jeremy King said during a conference last month.

In one case during the Scan & Go rollout, a customer tried to leave a Walmart store with a cart of about 100 items, only 40 of which he had scanned, Larson said.

Read more: Walmart just abandoned cashierless checkout, and it reveals a huge challenge in its battle with Amazon

Larson recalled a Walmart executive joking about issues with Scan & Go at a company town hall meeting last summer.

"We're just going to call the program 'Go' because the customers can't seem to 'Scan' anything,'" the executive said, according to Larson's recollection.

Walmart declined to comment on this story.

Jeff Greenberg / Contributor / Getty Images

Walmart has rolled out a new mobile checkout program to all its US stores called Check Out With Me.

Walmart rolled out another mobile checkout program to all its US stores late last year called Check Out With Me.

Check Out With Me enables roaming Walmart employees to process customers' payments using handheld devices made by the San Francisco company Innowi, which Larson joined after leaving Walmart.

If the program sounds familiar, that's because it is: Apple pioneered this checkout concept in its stores in 2006.

More than 10 years later, the concept has made its way to the world's largest retailer. Larson is betting that it will continue to grow in popularity until it's used by all major retailers. (Of course, he would benefit if this happened, given his position at Innowi).

Read more: Walmart is eliminating the most dreaded part of holiday shopping

Here's why he thinks the concept will succeed:

Check Out With Me theft rates, which the retail industry calls shrink, are lower than at self-checkout registers or Scan & Go, he said.

A popular tactic that thieves use at self-checkout registers is called "ticket-switching." This is when people discretely cover the barcode of an item, like a $30 rib-eye steak, with the barcode of a cheaper product, like a packet of Koolaid, when using the self-checkout scanner.

"Now they just got rib-eye steaks for $0.99," Larson said.

Walmart

Check Out With Me enables roaming Walmart employees to process customers' payments using handheld devices made by the San Francisco company Innowi.

Potential thieves don't have this option with Check Out With Me, since scanning is executed by a store employee.

Mobile checkout concepts like Check Out With Me also tend to be faster than self-checkout. Self-checkout transactions can take two-to-three times longer than transactions at registers manned by employees, Larson said.

The concept helps alleviate lines of customers at the front of stores, as well, which is a primary goal of Walmart's checkout innovation team, he said.

"Now your customers can check out with any employee, with the one stocking the shelves, literally anywhere in the store, and you really take a lot of that pressure off the lines in the front of the store and move it elsewhere with people that you trust, with your own employees," he said.

And finally, the concept is relatively easy to scale, especially compared to technology that relies on dozens of cameras like Amazon Go's computer vision, he said.

"I think not just Walmart, but every retailer will test-fail-learn with all these different [checkout] methods, and eventually land on what Apple has been doing all along," he said.