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GUEST COMMENT Should we cash out on the PoS?

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Sainsbury's move to cashless, checkout-free stores could be the future – but what are the issues?
Sainsbury's move to cashless, checkout-free stores could be the future – but what are the issues?
Chris Griffiths, Managing Partner for Customer Experience, REPL Group
Chris Griffiths, Managing Partner for Customer Experience, REPL Group

The recent launch of the UK’s first till-free grocery store by Sainsbury’s has stirred up much debate over whether we can expect to see other retailers follow suit. In the current retail climate, with so much competition on both the high street and online, it is vital that retailers explore new opportunities and continuously innovate to give customers a seamless shopping experience.

 

Frequently, waiting to pay at tills can create a friction in the sales process, so removing the hurdles between the customer and the point of sale (PoS) will make queuing a thing of the past and offer a more convenient service for the consumer. However, there are important process and operational considerations that need to be made, such as loss prevention, theft and managing age-restricted items, which may deter more retailers from adopting a till-free approach.

 

Arguably, Sainsbury’s has made a brave move in adopting new technology to trial the removal of tills from its stores, so does this spell the end of the traditional PoS? Or will the till continue to have a place on the high street as retailers find new and exciting ways to innovate?

 

The Sainsbury’s effect

Over the years, as technology has advanced, so too has the way we shop, and for some, a till-free system is a sign of the times and a natural progression. With each development, shopping in bricks-and-mortar stores has become more convenient, with till-free stores making the experience faster and smoother. It also frees up employees to spend more time on the shop floor assisting customers, rather than being tied to a till bank.

 

However, adoption of the app at Sainsbury’s till-free store has been disappointing so far and if they are to become mainstream, a great deal of cultural and societal changes need to be made. Culturally, consumer habits dictate the way in which most of us shop and any deviation from the standard will take some getting used to which isn’t going to happen overnight. But, it’s not just consumers who may be wary of the new technology, with the trend raising a number of issues for retailers.

 

Will till-free stores become the norm?

Moving to a till-free system requires retailers to think about the societal, operational and physical implications of doing so. Removing tills, and for that matter cash, from the store completely isn’t straightforward and retailers must consider operationally how it will work. This has been demonstrated by Sainsbury’s having to remove all age-restricted items from its till-free store, meaning shoppers can’t buy alcohol, cigarettes or medicine, for example.

 

This, therefore, makes the experience much less convenient for those looking to buy restricted items. Similarly, there are concerns over theft and loss prevention. After all, if customers aren’t required to interact with staff members or physical tills, how can you ensure they pay for everything in their basket? The physical security of such stores and how retailers will protect their business, therefore, needs to be thoroughly thought-out.

 

Additionally, not all stores are suited to going till-free, whether due to the nature of their brand, the goods being sold or their demographic. For instance, luxury retailers where part of the appeal is having items packed and wrapped, may not benefit from this technology as it doesn’t fit with the experience the retailer offers and that customers expect.

 

Equally, brands with an older client-base may find that their customers are resistant to change and value the face-to-face interaction of the traditional shopping experience. This is something that we have seen with the rise of self-service checkouts with researchfinding that they deter 24% of older people from shopping.

 

Therefore, removing the till altogether could alienate the older generation even further and, if pensioners are given cause to stay away from the shops, it could impact retailers ability to attract their share of a £4.5bn market segment.

 

Finding alternative ways to innovate

Ultimately, retailers must do what is right for their brand and their customer-base and use technology to offer the best experience – and, while that might not be to remove the till, there are a variety of other ways to innovate. Up and down the high street, we are seeing different technology solutions being used with most stores adopting some level of innovation, from the use of e-receipts to offers being pushed in-store on mobile apps. Some brands, such as Adidas, have even launched superfan apps that act as VIP loyalty schemes and offer special offers to highly engaged customers. In the future, it’s likely we will see the uptake of these types of apps increase, with brands using them to push deals and offers to segments of their customer-base.

 

It’s not just the high street that is using technology to innovate. In fact, Tottenham Hotspur’s new stadium operates a cashless model which has helped to improve the fan experience on match days. The use of cashless systems means fewer and shorter queues and faster service, which is vital to manage the significant peaks on match day. This model has also been adopted by Amazon Go cashless stores, but while they look great and offer a very convenient shopping experience, from a cost point of view, the model isn’t yet scalable.

 

In reality, one solution won’t be right for every store, so it’s about retailers finding out what works for them, with different models being used dependent on the brand and the people they are serving. This is something we have seen with mobile PoS, which just a few years ago was a major talking point within the retail industry and was slated to be the next big thing. However, it didn’t end up being widely adopted. Yes, some retailers are using it and use it well, but it hasn’t been adopted across the board due to the fact that it doesn’t always gel with the experience the retailer wants to offer. In stores that provide assisted selling and talk customers through complex purchases, mobile PoS works well, but much of its hype revolved around its ‘queue-busting’ ability and, in actual fact, we’ve seen very few retailers do this successfully.

 

What does the future hold for the PoS?

The till-free store Sainsbury’s is trialling is a brave but positive move. This experimentation with technology is a welcome addition to the high street, demonstrating how technology can enhance the customer experience, and it could be just what is needed to reinvigorate the high street.

 

That said, its adoption won’t be suited to every store with retailers needing to overcome a huge amount of cultural, physical and operational challenges to do so. There are also a number of other considerations to be made about whether removing the PoS fits the brand, the goods on offer, the experience they want to create and their demographic, which means it won’t be suited to every retailer.

 

So, while the PoS, certainly still has a place on the high street, it doesn’t mean there isn’t still room to innovate, and most retailers are finding ways to adopt technology to offer an improved experience that is best suited to their customer-base.

 

Regardless of what types of technology retailers adopt, they must think through their decisions from a business point of view and not just jump to a technology solution. The more important discussions are really about what business problem the retailer is trying to solve or what experience they want to provide. Once they know that, they can start thinking about how to solve it from either a technology or non-technology standpoint and build from there.

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