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Riding the wave of ‘check-out free’ stores

Riding the wave of
 ‘check-out free’ stores

James Stark

Account Director NER, GSV @ Worldline

Checkout-free stores - sound good in principle, but will they work? Following the news in October that Tesco, the UK’s biggest grocery retailer, will be trialling this system in one of their London stores, you would be forgiven for wondering whether they will work in practice or even improve the shopping experience for the customer.

Entirely frictionless grocery retail stores in the UK have entered the market but so far, the response from consumers has been a little underwhelming. Amazon Fresh stores were launched in 2018 and, with under ten stores opened nationwide, are yet to fully take off. However, the advantages are clear. Across the pond the US equivalent, Amazon Go stores, comparatively are more widespread and number nearly 30, making further analysis of what this system will entail for UK customers and merchants in the retail sector and beyond even more important.

 

The (tech) concept

Hassle-free shopping experiences are often few and far between. But, through the latest payments technology, they should become the norm for your average grocery shop. The technology will enable customers to walk into a shop and out again with your groceries without having to go via a till or self-service checkout. This minimises friction and drives convenience for the customer, allowing them to get on with their personal and business lives without any hold up.

People do not want to queue and have become used to making more digitalised and contactless payments, thus speeding up the shopping experience by limiting touchpoints, since the start of the pandemic.

This has been due, in part, to the implementation of social distancing / public health rules to limit the contact between staff and the customer and decrease the risk of virus transmission. But arguably, Covid-19 only served to accelerate a pre-existing trend of merchants streamlining their systems to improve efficiency and increase growth.

 

How it all ‘Appens

In order for it to work, customers will need to download an app and enter their information, such as bank details, before they are able to walk past payment-facilitated sensors and complete their shop.

This is also to the benefit of the merchant. Non-sensitive information gathered through the app, such email addresses, allows retailers to see where customers are shopping, how much they are spending, and what they tend to buy on a given day of the week. For example, if red wine purchases spike on a Friday, merchants may offer a discount on a bottle of Malbec and have it placed near the shop entrance throughout the day.

Consumers are not just a number on a till, rather they are offered a bespoke service as a result of Worldline’s solution. And the offer of a more personalised experience only serves to boost the prospect of customer retention and, in turn, revenue.

 

The need for payments resilience

Check-out free stores of course rely on payment systems working at all times of the day. Unlike a traditional checkout – where, in many cases, if a till ceases to function the customer can use an alternative payment method - sensors must be very resilient as they are at the heart of the store revenue.

At Worldline, nonetheless, we will offer the customer a unique experience through our retail solution and one that will provide payment resilience – our bread and butter – particularly at peak shopping times during the day or holiday season, such as at Christmas.

When major companies have down times it can end up on the news and damage the brand’s image, and so the payments element of the shop, which is the silent part in the background, is key - a sign of a good payments infrastructure and a good gateway is therefore simply one that works the whole time without fail.

 

Old habits die hard

If this type of store does become more popular on our high streets in the coming years, consumers will have to adapt their shopping habits and shift from the more traditional till service, or even the more recent self- service checkout, to a checkout-free experience which is entirely frictionless.

This may be difficult from a behavioural point of view - as the customer, we are used to the concept of going into a shop, picking up a basket, getting our items and having a physical checkout of some sort.

As a result, the rollout of this new system may be a slow burner, particularly for the older generations, who are still getting used to contactless payments, chip and pin and the move away from cash and cheques.

So there is an educational element to it which would best suit the digitally savvy younger generations, but risks marginalising certain demographics.

 

It’s an exciting time for retail with checkout-free stores potentially on the horizon, trial dependent. Their arrival will hasten shopping experiences to the benefit of both the merchant and the consumer and will be underpinned by the payments infrastructure offered by Worldline.

Nonetheless, it will pose obstacles for both - the latter will have to significantly adapt its shopping mindset, while the former will have to provide a working payment gateway and a system that upholds the law to ensure unaccompanied under-18s are unable to pick up a bottle of wine and walk through the sensors. But as technology improves, the advantages should far outweigh the disadvantages.

 

Find out more about Worldline’s Retail solution here: Retail (worldline.com)