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IRUK Top500 Strategy and Innovation Report: 2018

IRUK Top500 Strategy and Innovation Report: 2018

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Tesco joins growing number of checkout-less shopping trials – but do consumers want it?

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Whoosh! Tesco joins the growing number of retailers looking to expedite checkout with mobile
Whoosh! Tesco joins the growing number of retailers looking to expedite checkout with mobile
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Tesco trials checkout-free shopping – but do consumers want it?

Tesco is trialling ’scan and go’ technology to enable customers to pay for groceries via the retailer’s Scan Pay Go smartphone app.

 

Tesco’s Amazon Go-like move is live in its Express convenience store at its own Welwyn Garden City HQ. The retailer is using 100 staff members to test the app’s utility in the purpose-built brick-and-mortar store. The Top500 Elite retailer’s employees are able to pay for the supermarket’s items by scanning the barcode of a product, which is then added into a digital basket and automatically processed as a payment.

 

Tesco says that the Express store is also being used to examine shoppers’ reaction to the cashless world.

 

The Tesco chief executive, Dave Lewis says that the new technology is a quantum leap that could be launched across the retailer’s chain. However, there are some technical issues to consider, not least whether people would simply leave the store without paying for an item.

 

“The technology exists to do it, but does the customer behaviour support it?" says Lewis. "If the margin is 2-3%, you don’t need to lose very much to make it unprofitable. In our stores in central London, Manchester and Birmingham, lunchtime queues are a problem. Anything we can do to speed that up will be a benefit for customers.”

 

The move marks a continuation of the checkout-less trend that was initially introduced by Amazon Go store in Seattle. Sainsbury’s, Co-op, and Budgens in the UK and MediaMarktSaturn in Austria have also jumped on this bandwagon as they attempt to engage customers with new tech and deliver faster shopping experiences.

 

But, what do consumer actually think about this sort of change in retail ettiquette?

 

In an attempt to examine customers views on checkout-less shopping, Paysafe surveyed 5,056 consumers in UK, US, Canada, Germany, and Austria.

 

The study paints a mixed picture, with 56% of global respondents saying that the concept of a checkout-free store sounded "too risky" to use, or that they would need to know a lot more about it before feeling comfortable using it. On the other hand, only 11% report that they "would definitely" shop this way if local stores offered it.


“Tesco’s trial of “shop and go” technology is a perfect example of the evolution of traditional bricks and mortar stores towards a new era of convenient shopping," comments Patrick Munden, global head of retail at global ecommerce consultancy Salmon, a Wunderman Commerce Company.

 

"Regardless of whether the purchase is made in-store, or online, consumers are demanding speed, convenience and a user-friendly experience – this new technology is a direct reflection of this shift in consumer behaviour."

He adds:“We have already seen this technology with the likes of Amazon Go, and while the online giant has employed an “aggressive horizontality” approach – dipping its toes in TV, grocery, etc. – in a bid to grow in each and every industry, Amazon is increasingly finding pushback against some of its initiatives. For instance, BBC, ITV and Channel 4 are all launching their own streaming service to combat Prime Video, Marks & Spencer trialled its own 1-hour delivery service and, of course, Tesco is now taking on Amazon with its checkout-less technology in response to Amazon Go."

Munden concludes:“In addition to the physical element of “shop and go”, it demonstrates how fresh and innovative thinking can address historic friction points. For all retailers in every industry and every channel, this is a wake-up call to start offering customers a better, frictionless experience that puts the consumer in charge. Amazon is already leading the way in this technology, but other retailers need to seriously play catch-up or risk being left behind in this retail rat race.”

 

David Nicholls, retail chief technology officer at Fujitsu UK & Ireland, comments on the news: “The checkout process continues to evolve to meet the changing demands of the consumer, with advances in technology more and more retailers are trialling new payment processes such as ‘shop and go’, the days of queuing and tilling as we know it are numbered, and Tesco is the latest retailer to throw its hat into the ring. This mobile shop and go set up is an example of how retailers can harness technology and embrace innovation in their physical stores to create that invaluable seamless customer journey."

He continues: “We have seen a steady increase in online shopping in recent years. As this need for convenience grows amongst consumers, so will the need to improve customers check out process, which can be the deciding factor at times as to whether a customer stays to pay or leaves their items behind. Technology can be a fantastic enabler in bridging the gap between online and physical stores which more consumers are looking to retailers to do – but only if it is used in the right way. We’ve found that 8-in-10 consumers would actually spend more with retailers that have a better technology offering, emphasising the opportunity it holds for retailers to improve and grow their customer loyalty base."

Nicholls concludes: “’Shop and go’ technology is only the beginning of the evolution of the checkout process. As consumers expect more personalised experience, a one-size fits all approach will no longer suffice. Retailers would do well to look ahead and already find what the next generation of the checkout process will be so they can continue to meet the demands of their customers and provide them with a happy and satisfying journey.”

 

Image credit: Tesco

 

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