Zippin powers a drink market at Empower Field at Mile High in Denver, home to the NFL Broncos. (Courtesy Zippin)

Cashierless concessions firm Zippin wants to expand to more venues

Given the narrow peak sales intervals typical at stadiums and arenas, such venues are perfect test cases for checkout-free concessions technology, and so far, the verdict has been positive, according to the CEO of Zippin, the 6-year-old company that’s seeking to expand broadly into major league facilities.

Krishna Motukuri

With installations at Golden 1 Center, home of the NBA’s Sacramento Kings; Empower Field at Mile High, home of the NFL’s Denver Broncos; and AT&T Center in San Antonio, home of the NBA’s Spurs, Zippin’s competition in the cashierless space comes from a number companies, including e-commerce behemoth Amazon, which was on the verge of a checkout-free installation at Chicago’s United Center before the coronavirus pandemic struck.

In fact, Zippin founder and CEO Krishna Motukuri, whose background is in e-commerce and retail, started his career at Amazon in the 1990s. The company’s founders also hail from SRI, formerly the Stanford Research Institute, in Palo Alto, California.

Cashierless concessions work by allowing fans to scan credit cards or phone apps then select the pre-packaged items they want and simply leave the outlet, with the charge showing up their monthly bill.

“Stadiums are a perfect first-use case for us because the return on investment is almost exponentially higher than even in the case of grocery stores because it’s a very short period of time that a lot of people want to transact and within that short period of time there are even shorter spikes in demand like halftime or the end of the first quarter,” Motukuri said. “These spikes actually create enormous challenges for operators. No matter who the operator is, they just can’t get those lines down. The only way … is through automation.”

The advantages of such systems extend beyond eliminating friction and offering the relative safety of briefer, contact-free transactions. Systems like Zippin’s allow for real time inventory management and the error rate is exceedingly low, with an accuracy rate of 99.87%, and employ an artificial intelligence component that allows the system to learn as it goes, Motukuri says. Advanced analytics allow operators to track the shopping behavior of individual customers within the store.

“We can tell what products they considered and what they finally walked out with,” Motukuri said.

Savings from not having to staff outlets with cashiers can be used to improve the customer experience and merchandising within the store, which typically increases sales per square foot, he said.

The company is in discussions with other teams and venues and expects to sign two additional deals, if not more, in the first quarter of 2021, he said.

Zippin partners with venue concessionaires to stand up and operate the cashierless stores. The installations typically take less than a week, but can be done more quickly using a modular approach. One in Brazil was stood up in a day, Motukuri said.

In most cases, there’s an initial charge for hardware and then the software is provided through a monthly subscription model. In some cases, there is a transaction fee as well. Motukuri called it “practically (a) white label solution,” powered by Zippin, but branded as the client sees fit.

The exact details of each installation vary from partner to partner and each specific store, he said.

“We (supply third-party) hardware and guidance in terms of how to install the tech and then … the actual software (produced by Zippin and which runs in the cloud) is fairly automated,” he said.

The response has been positive, with sales in an Empower Field drink market 30% higher than a comparable venue outlet with cashiers and customers spending an average of just 45 seconds in the market from the time they scan at the entrance, he said.

“When you remove the bottlenecks, then more customers are willing to actually walk in and get that second beer or make a purchase in general,” Motukuri said. “It’s like having a personal refrigerator.”

Editor’s Note: This article has been updated.