Nearly 40 percent of smart phone carrying shoppers abandon their in-store purchases due to long lines. Another 21 percent will bail on buying if there are no registers open.*
As retailers work to embrace consumer technology solutions, will we see a day where the long checkout line is non-existent?
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Connected Futures recently sat down with Lisa Fretwell, managing director of retail, Cisco Consulting Services, and Leslie Hand, vice president of IDC Retail Insights, and had a great conversation that revolved around that exact question. They also talked about how retailers are leveraging the power of the Internet of Everything to transform traditional brick-and-mortar stores into a high-octane digital experience.
Here is an excerpt from their conversation.
Connected Futures: What will be required to make the last checkout line possible?
Lisa Fretwell: Checkout lines are a significant issue. Research shows that customers get very frustrated and they will leave if they wait for two-and-a-half minutes with no apparent progress. Here in the UK, some interesting research suggests long checkout queues are costing retailers a billion dollars a year.
It’s the nirvana of walking into a store and walking out with what you like, and not having to check out at all. It’s something that’s automatic, something that processes what you’ve purchased and then allows you to pay for it. And that’s the kind of nirvana that we’re heading towards. From a retailer’s perspective, it’s around innovating and using some of the technologies that exist today to make a big impact.
Leslie Hand: The convergence of digital and physical retail actually creates this customer experience that never before had been possible.
Fretwell: When we look at new technologies such as sensing analytics, we can sense someone moving around the store, where they’re going, how fast they’re going. We can even sense their mood and collate that with what they’re doing on their mobile device or using video analytics to see what’s going on with that consumer and then be able to predict what they need. It’s about giving a shopper exactly what they need, where and when they want it without being intrusive.
Hand: We see great examples of retailers that have enabled scan-and-go technology. Stop and Shop has a mobile app that lets you check out inside the store, from your mobile phone. Basically you scan your items as you go through the store and then just speed through the self-checkout lane. They haven’t quite integrated the payment capability yet, but that’s the next step.
Retailers want to grow sales and customer loyalty. And seamless checkout helps them reach those goals. It allows customers to put more in their basket, and the mantra from the retailer has always been ‘get the customer to add one more item to the basket,’ because that translates to hundreds of millions of dollars for major retailers.
Fretwell: And if retailers integrate payment in a much smarter way, that makes an even more pleasant, relevant, and helpful experience. Retailers can innovate with technology to provide a range of solutions depending on the mission of the shopper. For example, the convenience store: we see that scan-and-go on your mobile where you pay automatically when you walk out is something that consumers are very happy to engage with.
One of the things, Leslie, I’d be interested to get your thoughts on is some of the risks and issues in this area. What’s your experience of how retailers overcome challenges?
Hand: A lot of the earlier studies coming out of Europe and the UK show that there was not as much risk as the retailer might assume there would be in shoplifting, because the consumer is being trusted, and trust is a two-way street, right?
One of my favorite demonstrations is from the Rebecca Minkoff store. It was completely sensor-enabled, where the consumer brought items into the dressing room and other products that complement what consumer brought into the dressing room were displayed on the large mirrored screen. The customer could easily request them to be brought to them, or they could change sizes and colors of things that they wanted brought to them in the fitting room.
Enabling the product to inform better decisions, but there’s a lot that a retailer needs to do. We’re talking about significantly greater magnitudes of data, data management and data analysis. And then of course the most critical thing related to all of this. It is driving better decisions and processes by utilizing the data better.
Fretwell: I experienced the Rebecca Minkoff application and I was very engaged with it. But at the very end I was very disappointed with the payment process. In context to the last checkout line -- the payment took about 15 minutes for the sales clerk to package my goods and take my payment. And it destroyed the experience. Retailers need to look at things end-to-end so that they manage customer’s expectation all the way through.
Another very innovative experience is Hointer Jeans. This is where you’re able to select your jeans and they’re delivered in a chute to your changing room. You then try them on, and you can return the ones that don’t fit back in the chute. And it automatically takes payment. And again, you can see how technology can make that all happen.
The challenge in that type of experience is the technology is there, but the price point is not there at the moment. I think other challenges can definitely be overcome.
Hand: I think you hit on that challenge of process getting in the way of that good consumer experience. Do you remember when grocers made you walk through the entrance, and forced you to go down a certain aisle, because it was the seasonal product, and they wanted you to buy the seasonal product. This doesn’t exist anymore, because the consumer didn’t like it. And if the consumer doesn’t like it, then we have to change in order to adapt to what they want to do today. That’s some of the challenges -- how do I balance leveraging data, automating more of my processes, enabling higher level of digital service. How do I leverage that to differentiate my brand? But then how do I also make sure that I’m doing that in consort with what the consumer wants? That’s ultimately the biggest challenge.
Connected Futures: Can you can share some advice for retailers as they prepare for this future environment? What specific approaches can leading retailers take to move towards the Last Checkout Line?
Fretwell: The most important thing is to listen to shoppers and be on pulse of what they want, particularly the millennials. One of the biggest learnings we’ve had is around talking to millennials about the types of experiences they want. And particularly, in checkout, they’ve got some very different views of the world than perhaps the older generations. And it’s around segmenting your solutions and capabilities depending on your customers’ mission. Do they want to dwell and have a gentle experience in store, or do they want to get out of the store very quickly? It’s really important that retailers keep innovating with the solutions available today to create experiences that are scalable and offer what their consumers want. All these technologies, be they analytics, be they sensing, be they automation, they all provide new ways of automating processes, which takes a significant cost out of the retail store, and that’s one of the key things that most of our retailers are faced with today, and it’s the key area to apply it and that is the checkout line.
Hand: Ultimately, it’s all about embedding more automation to drive down the costs but increase service at same time. It’s doing both at once.
*Source: A recent survey by AisleBuyer, an in-store mobile commerce provider.