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Beyond Self-Checkout: Mobilizing Mobile Payments

Donna SuttonDonna Sutton

Posted on Friday, October 5th, 2012

Last year, bold projections indicated self-checkout kiosks may become a thing of the past. After a self-service boom, leading grocery retailers announced a shift in their strategies, opting to focus on better customer service. But a year later, it seems that self-checkout, for the most part, has survived – perhaps because shoppers have defined improved service as including convenient checkout alternatives.

It seems self service is here to stay. However, uncooperative touch screen monitors and technology glitches can create long wait times. To ease this frustration, there’s a new mantra for the CPG industry: no lines ever. Leveraging recent advances in mobile technology, retailers are introducing new ways to pay.

In other retail sectors, mobile payment systems are already proving they may eventually eliminate traditional cash registers. At cutting-edge retailers like Apple, customers can walk up to any iPad-clad employee and pay anywhere on the shop floor. Many smaller retailers have adopted Square, a mobile payment service that expects to process $6 billion in payments this year. Starbucks and several apparel retailers are experimenting with similar systems.

The CPG industry is no exception to this modernization game, and has plans to go mobile as well. Walmart is testing a “Scan & Go” program that lets shoppers use their iPhones to scan products as they drop them into their carts. Customers then download their list at a payment kiosk. To expand this process beyond the world’s largest retailer, QThru, a smartphone app that works the same way, is present in Myers Group grocery stores, after a successful pilot program at a supermarket in the Seattle area.

As more shoppers embrace technology, mobile payments may do more than shorten lines. Apps capable of syncing to loyalty card programs and digital coupons may make it easier for customers to save. They could also serve as a differentiator for successful early adopters, and ultimately increase brand loyalty. Many shoppers will view updated technology that shortens lines and turns them on to savings as the ultimate in customer service.

Other shoppers may feel the retailer is fobbing them off to a machine and view mobile payments as yet another technology designed to cut costs by eliminating personal interaction.

Before investing in a mobile checkout system, retailers should evaluate their shopper base to gauge its potential for success. As not all shoppers are equally tech savvy, retailers should decide if a large enough portion of shoppers would prefer mobile payment options. SymphonyIRI’s DigitaLink research segments customers based on their digital habits, attitudes towards technology, and use of mobile devices. Applying DigitaLink or conducting similar segmentation can help make the decision to “mobilize.”

As I discussed in a blog about self-checkouts last year, each shopper has a preference as to how they pay. To prevent shopper confusion, until more shoppers embrace mobile technology, perhaps retailers’ best bet is to provide multiple checkout options.

What do you think?  How do you see this trend at play in retail environments? What is your retail outlet doing to embrace mobile technology?

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4 Responses for "Beyond Self-Checkout: Mobilizing Mobile Payments"

  1. Ronda Sims November 1st, 2012 at 10:59 AM

    As a result of this article, I’m going to download that app. However, I’m hoping that it really does save time. Otherwise, it’ll be as useless or difficult as the self checkout machines that have terrible technical difficulties.

    On the flipside of that, instead of creating a profit as buyers feel compelled to make additional purchases because of the convenience of this shopping program, theft could set in place. To elaborate more of that is to consider, what if buyers forget to scan items and as they exit the buyers, the alarm doesn’t catch the unscanned item. Just something to consider.

    Nevertheless, I think that this is a great tool to put into practice everywhere, especially in large and heavy populated cities. I’m excited to explore the possibilities.

  2. Donna Sutton November 12th, 2012 at 4:01 PM

    I love this idea too and thought about theft, but I am sure the retailers have too. I hope it saves us time and I think in many ways, it makes a one on one connection with the retailer’s customer service personnel.

    Where it could get very interesting is during the holidays when the stores are so packed and just finding the staff and enough of them around when people are a little crazed! Time will tell if this is going to work and is here to stay!

    Thanks for your comments – good luck!

  3. Sangita Ray November 13th, 2012 at 3:00 PM

    Revolutions in the mobile industry definitely have totally re-contoured the marketing industry as well. As far as mobile payments are concerned, I think we might still be 5-7 yrs away from seeing it become the preferred payment option for the masses. However, research studies show that the number of consumers using mobile payment options is growing exponentially. That been said, retailers ignoring mobile payment technology could soon find themselves at a competitive disadvantage.

  4. Mark Eastwood January 8th, 2013 at 9:43 AM

    I’m surprised to hear about the threats to self-check out. I use it regularly at Kroger in Texas specifically because there’s rarely a line and my typical purchases are frequent but generally small. For larger purchases I usually wait in a line for a human, part of the reason is space. The self-check outs appear to be geared to “small” purchases. As a technology professional I’m happy to use the devices and forgo the human interaction for a quick purchase. The generation of my parents is completely the opposite.

    I see retailers such as Target eschewing self-checkout and failing to watch for long lines. That’s a problem when you need one item and just want to get done. Putting the few “express” lanes on one end of the store is also short-sighted because you have to walk to that end and back rather than having a express lane near both of the doors.

    I agree it’s more about efficiently getting what I need and getting out however that’s accomplished. If taking people off the cash register and making them available to help in other ways is the strategy I like it. If we’re losing cashiers and not getting help in other parts of the store, I don’t like it.

    How does this shift towards additional technology affect coupons?

    While I think the Starbucks shift from paper coupons to “digital coupons” inside their phone app was awkward at first, it now works better. Can I “load” coupons into my preferred device (including Catalina) and have them applied based on preferences such as largest value first or closest to expiration? Does my device also hold my loyalty information?

    How about ship to store/store pick up? Where does that fit into the mix? I like the idea of saving on shipping costs by picking up in the store but I’d rather use my phone to have my order located than to need a paper receipt printed at home.