For years, there has been speculation that online retail may bring about the demise of brick-and-mortar retail. To paraphrase a legendary Mark Twain quip, reports of traditional retail’s death have been greatly exaggerated. While there’s no doubt about the popularity of online retail, 90% of sales still occur inside physical stores.1
For consumers, however, there remains a primary drawback to the in-store experience — waiting in line to check out. 74% of shoppers say the checkout process is the biggest pain point in their retail experience. Whether instant-gratification culture has reduced our patience, or we’re naturally wired to dislike delay, inconvenient checkout has a serious impact on retailers. A study last year revealed that, over a period of 12 months, 86% of consumers left a store due to long lines — resulting in approximately $37.7 billion lost in potential sales.2
Brick-and-mortar retailers are competing to provide a premier customer experience — one that will help the brands’ reputation and drive more visits, sales and revenue. Given the high stakes of efficient checkout, it’s no wonder that the concept of “frictionless” checkout has gained traction. But is truly “frictionless” checkout possible for most retailers, or purely aspirational? And how should retailers approach implementation?
Years ago, in a first step toward a more efficient checkout experience, retailers introduced self-checkout lines. Today, Amazon Go operates frictionless retail utilizing computer vision, sensor fusion, machine learning and AI along with a purpose-built smartphone application to allow consumers to enter the store, take what they need and leave with little-to-no interruption.
The reality is, the vast majority of retailers operate somewhere between these two levels of checkout efficiency. Not every retailer has the luxury of building custom, small-footprint stores like Amazon Go; nor can they necessarily afford technology or provide the highly skilled personnel to run it.
The good news is that there are many ways that retailers can progress toward a frictionless experience, if they keep in mind the following tips.
- Provide a meaningful and personal shopping experience that meets customer needs. While the Amazon Go model carries a “wow” factor, especially for early adopters, most customers are just looking for a better, more streamlined shopping experience, rather than seeking the latest in high tech. Examples of efficiencies that improve customer experience include the ability to buy online and pick up in the store, order online and return an item in the store or, yes, the now “old fashioned” self-checkout. As for those off-putting checkout lines, technology companies like SKIP (www.getskip.com) and branded retailers like H-E-B with its “GO” app are offering ways for consumers to avoid lines. Walmart and Sam’s Club also have begun implementing this interesting “half step” to pure frictionless checkout by inviting customers to scan the items they’re buying using their own mobile devices. The customer then goes to the checkout counter to confirm the accuracy of the items they scanned that are now in their baskets or carts.
- Any solution is only as good as the network it’s on. Retailers on the path to frictionless checkout must consider network and IT infrastructures. Elements of frictionless checkout — such as customer WiFi, advanced sensing systems, IoT applications, mobile apps, and voice recognition — can strain a network. In addition to anticipating increased demand on bandwidth, the network should address application assurance to make sure critical applications are prioritized properly. Frictionless checkout functions can introduce new security challenges — from bad actors attempting to “game the system” to physical security concerns — including the risk of unpaid merchandise walking out the door. Depending on the technologies used, aretail network for frictionless checkout should expand the point of sale security envelope in POS, hardening it to include EMV, mobile pay and possibly even two-factor authentication.
- Future proof for what’s next. The only thing that’s certain in retail technology is continuous evolution. As retailers aim to implement today’s tech and upgrade the network to accommodate it, they also should be considering how to position themselves for what’s coming. While today’s priority may be a pay-by-app solution, tomorrow could bring RFID-enabled smart bags or baskets, smart shelves and more. AI platforms will become super-efficient and computer vision systems will be more sophisticated. As more businesses adopt new technologies, the costs of implementation may go down, making next-generation tech more accessible. When that happens, retailers won’t want to be burdened with legacy infrastructure ill-prepared to handle the transition.
- Don’t go it alone. An experienced managed services provider can help the retailer determine what solutions are best to meet their goals, and establish the digital infrastructure to ensure peak performance of tools and technologies. A full-service partner will shoulder the responsibility of network design, implementation and technical support as well as provide maintenance and easy-to-use network management tools so that the retailer can focus on its core business. In a world where 76% of consumers will give a brand two or three chances to get things “right” before they stop shopping with them3, it is important to make the right choice in vendors. To support advances in frictionless checkout, retailers should seek true partners with deep expertise who will work with them side-by-side to navigate the transition and beyond.
A consumer survey recently revealed the #1 emerging technology that shoppers want (59%) is cashierless checkout.4 If retailers intent upon offering a frictionless customer experience do not anticipate and address networking issues, their existing wide-area and local area network (WAN/LAN) infrastructure may not support frictionless checkout — resulting in a negative customer experience. Understandably, retailers want to respond to demand. How they go about it could mean the difference between building long-term brand loyalty and revenue, and being left behind.
- IHL Group, “Debunking the Retail Apocalypse,” 2017.
- Chain Store Age, “Study: Long checkout lanes cost retailers billions,” 2018
- Alliance Data: “Rules of NextGen Loyalty,” 2018
- RIS New: Shopper Study Megatrends, 2018
Mike Tippets is Vice President of Marketing and Organizational Development for the enterprise division of Hughes Network Systems. Tippets joined Hughes in February 2008 and is responsible for the creation of brand and product awareness and for the engagement and development of Hughes employees around the world. Tippets is a 30-year veteran of the high-tech industry and brings a dynamic and passionate vision of what digital transformation and digital solutions can provide for businesses in the 21st century.