There are certain situations where consumers will want to take their time when making an important purchase and enjoy the whole buying experience – when searching for a brand-new car, for example. However, on a day-to-day basis, when buying petrol, groceries or even clothes, most want the transaction to go through as quickly as possible.
With each week comes a new story on the sorry state of the instore retail market, from the mass closures of big high street names such as Homebase, Carphone Warehouse and Toys R US to a reduction in high-street footfall. Meanwhile, according to the Capgemini IMRG eRetail Sales Index, online retail grew by 16.8 per cent in the first half of 2018. All signs point to the high street needing a big shake up to fall more closely in line with the online shopping experience and remove some of the hurdles between the customer and the PoS.
For many consumers, the worst things about the instore shopping experience are the crowds and queues and spotting a queue at the till means they may well decide to go elsewhere. Waiting to pay creates what the retail experts call ‘friction’ in the sales process – something to be avoided at all costs if traditional retailers want to compete with the convenience of online shopping.
Consequently, some of today’s most forward-looking retailers are finding radical ways to eliminate the need for tills, check-outs and everything to do with traditional point of sale (PoS) stations. Customers in Apple stores can scan their purchases on their phone within the store, paying directly through Apple Pay without even having to speak to anyone – and in some Nike shops staff roam the store taking payments on a mobile device to ‘bust’ the queues. Even though, as yet, petrol is one commodity unavailable online, recognising the need for convenience BP has thrown down the gauntlet with its BPme app, “for those who need to save a few precious minutes at the pump – avoiding the queues of people buying other items in the garage.”
How to eliminate PoS
It's not just multinational retailers looking to capitalise on alternative methods of payment with the UK’s biggest retailer, Tesco, currently trialling new “shop and go” technology. The technology allows customers to scan and pay for groceries using a smartphone app, all without visiting a till. While currently only being trialled by staff at its Welwyn Garden City headquarters, it clear that Tesco is looking to change the way its customers shop in the long-term.
Tesco isn’t the only grocery store investing in new technology for its bricks-and-mortar stores. Inspired by Amazon opening an automated convenience store in the US in January, the Co-op and Sainsbury’s are also battling it out to become the first UK retailer to roll out the technology across stores nationwide in an attempt to appeal to time-pressed shoppers, looking for a ‘frictionless’ buying experience. In January, the Co-op announced it would be trialling a pay-in-aisle app, which, if successful, it hopes to roll out across its more than 2,500 stores in the UK. Meanwhile, Sainsbury’s is the latest UK grocery store to trial its first “till-free” store, with shoppers at one of the retailers’ London stores now able to use the Sainsbury’s SmartShop app to scan and pay for items.
Today, online retailers have eliminated many of the glitches experienced in the early days of ecommerce. As a result, instore shoppers are looking for a similar, seamless process, to help save those “precious minutes”. Imagine if there was a more seamless way to speed up this process, for example if payment could be taken from a mobile device in a changing room, so that the purchased clothes could be bagged and ready-to-go by the time the customer had put their current clothes back on or even worn straight out of the shop.
At the moment, retailers are trying out multiple methods of eliminating PoS. Scanning is a popular solution, however at some point Radio-Frequency Identification (RFID) tags and cameras could take over. Imagine automatically logging in as you walk into a next generation shop and RFID and cameras track what you buy and then charge you as you leave – a totally frictionless experience. It’s likely that customers will need to log onto an app as they enter a store – with individual store apps eventually merging into one system such as Apple Pay. The good thing about using customers’ mobile phones as a facilitating device is that it’s a two-way device and retailers can send them targeted special offers and discounts according to their instore browsing.
Enhancing the instore experience
Although at this time it is predominately grocery stores looking to implement alternative PoS technology, there is no reason why further down the line it can’t be adopted by all kinds of retailers. In the short term all the technology needed is available; mobile phones, RFID tags, high-definition cameras for tracking – it just needs to all be brought together. It’s likely that retailers will select best-of-breed solutions to create their own personalised system.
Without their large PoS stations, shops will have far more space to enhance the instore experience. This could be used for live demonstrations or furnished with easy chairs and used as an area for giving advice and discussing products. The apps will be able to track a customer’s journey around the store and so provide useful intelligence on ‘hot spots’ and browsing history.
Looking back on how the shopping experience has changed over the past few years with the introduction of self-checkout lines and self-scanning in supermarkets, it is clear that the next decade will bring about further change. While currently only used in supermarket and drugstores, self-service checkouts were the first step in what looks set to become a major technical revolution in the way we shop and pay in stores. With the likes of Amazon, Tesco and Nike paving the way for non-traditional PoS, and smaller retailers such as The Co-op trialling new technology, it seems like it’s only a matter of time before queueing at a till becomes a thing of the past.
It’s been shown that retailers upgrade or change their PoS systems every seven years – there are even some with systems implemented almost a decade ago – with many looking to replace these devices this year or next to keep up with the latest technologies. This could be the drive that brings about a radical rethink – leading to the end of PoS as we know it.
Mike Callender, Executive Chairman, REPL Group
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