Is Self-Checkout the Next Big Thing In Cannabis Retail?
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How much easier would self-checkout at grocery stores be if the entire shopping experience took place at a kiosk that takes the order and payment and then an employee handed over a cart full of groceries?
That is essentially what AUSA Corporation’s new Cocoon kiosks do for customers looking for an expedited shopping experience.
The kiosks are not a replacement for an existing point-of sales (POS) system, and they are definitely not vending machines. Instead, they function as an additional sales associate for customers who are in a hurry or simply already know what they want. The kiosks also provide contactless transactions, preventing numerous customers and employees from handling the same cash inside the store.
“The No. 1 benefit of our system is self-checkout,” says AUSA chief marketing officer Max Aceituno. “It’s a benefit for the manager, the staff and the customer. You can be in and out in five minutes.”
The machines seamlessly integrate with a retailer’s POS system and while they are still very much in their pilot phase, they are already available to retailers using Flowhub, Greenbits, Dauntless and other POS systems. But new technology always raises questions. Aceituno agreed to give some answers.
Max Aceituno: It is a self-checkout solution. The main benefactors of that solution would be the loyal, repeat customers who come to your dispensary all the time and know what they are looking for. It provides an expedited experience for them, no different than what you would see at the supermarket or McDonald’s. If they are looking for the quick experience, the Cocoon platform was born to answer that.
At certain dispensaries, the wait can be a long time. It can be 15 minutes or more in order to interact with a sales associate. Our product was built to address that market.
It’s a little different, too, from what’s currently out there. Using a kiosk to place an order is not anything new in the cannabis space, but we facilitate the whole transaction, from selecting the product to actually paying for that product. Not many can do that and because we facilitate the whole transaction, we are able to cut down on the wait times significantly.
MV: The kiosks let customers place an order, but how much of the transaction is the machine taking responsibility for?
MA: Our kiosk in outfitted with an ID scanner. We use this to age-verify the individual making a purchase, but we also use this to verify that the individual making the purchase is the same individual receiving the product, and to ensure that there are no misconceptions or mistakes there.
When a customer makes a purchase, they receive a receipt.
The Cocoon receipt has the name of the individual and the retail associate can take a look at the person’s ID, make sure it matches the receipt, hand the product to the customer and then they are done.
MV: Security is a primary concern for retailers. What keeps these kiosks safe from tampering or being outright stolen?
MA: The kiosks are heavy-duty, no different than what you would find at a bank or a casino. It’s under lock and key. It is bolted into the ground with six-inch bolts.
With our solution, the staff is 100 percent managing the cash. It’s important to note that, at the moment, our solution is a cash-only solution. It’s meant for cash-only businesses with your managers overseeing daily cash counts — no different than how you would reconcile a cashier drawer at the end of the day.
MV: Can any retailer get these kiosks installed or are they restricted to certain markets?
MA: We just launched our pilot here in Las Vegas. It’s a product that we intend to roll out nationwide.
We integrate directly into the POS system that a dispensary or cannabis retailer is using. One way to look at that would be to think of Cocoon as an extension to your cash registers. It’s basically a giant cash register. It acts as an employee that never sleeps, never has a day off and is always available. The kiosk is basically a really advanced ATM with our custom software that interacts with the retailer’s POS solution.
In terms of the national outreach, our only limitation is dependent on who we are integrated with. Right now, we have integration with Flowhub, and we are in discussion with a couple of different companies.
MV: What is the initial cost for a retailer to get one of these kiosks installed and integrated with their inventory management system? Is it a purchase or ongoing service?
MA: We have a couple of different pricing models. Depending on the customer, we offer purchase, lease and finance options. There’s an installation fee and a shipping fee.
Our kiosk is $13,000. Our installation is in the $1,000 range, depending on where you are in the country. Because it is an ATM, it is bolted into the ground. We send out a professional team to get that installed on location.
There is also a monthly maintenance fee. It is about $100 to $120 a month. It covers all incidental maintenance, upgrades, basically the wear and tear that comes from a kiosk like this. A location would be responsible for receipt paper and that’s about it.
MV: If customers are familiar with the kiosk and know what they want, how fast can they get in and out with a completed purchase?
MA: We’ve seen customers place orders anywhere from 2.5 to 5 minutes from the time they scan their ID to the time they receive their product.
MV: How does the technology integrate with pre-existing inventory management systems and order fulfillment platforms? Does it replace the pre-existing technology?
MA: No, it does not. We purposely built it this way so that it sits on top of this technology and enables us to stay out of compliance altogether. We are not a seed-to-sale kind of service, we don’t manage cash registers and employees, taxes or inventory or any of that. What we are doing is basically giving access to their inventory to display it on the kiosk and, depending on the solution, we submit the order to that service.
MV: What is the bottom-line savings for retailers?
MA: The locations that receive the most benefits are the ones that have overflow issues — the ones that are popular, busy and have peak periods where wait times exceed 15 minutes. Customers leave when they are not happy with that type of in-store experience.
The representation of our kiosks is equal to two employees at minimum. It’s always on. It’s always there and it solely takes orders. If you consider the cost savings of what our kiosks might provide versus the cost of a day- and night-shift employee, with the possibility of increased wages over time, the savings become readily apparent.
This interview was edited for length and clarity.