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Next in Line: Can Mobile Technologies Transform the In-store Checkout Process?

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Smartphones and other mobile technologies are already transforming many aspects of the in-store shopping experience. Is mobile-enabled checkout an idea whose time has come?

For retailers working to implement an effective mobile strategy, the potential impact of mobile technologies is so vast that it can be hard to know where to begin. One option is to start at the end by using mobile technologies to help reinvent the checkout process. For example, one consumer electronics retailer designed their stores without traditional point-of-sale registers and queues; instead they equipped their associates with mobile devices designed to process checkout, accept payments and email electronic receipts to customers, right there on the sales floor.

In another example, a fast food chain has created a mobile app that allows customers to place an order and pay with a credit card while standing in line, or before even arriving at the restaurant.

In addition, several retailers and restaurant chains have already equipped their stores with near field communications (NFC) terminals, which allow customers to pay by simply waving their credit card in front of the device. With the advent of NFC-enabled phones, this technology could have the potential to change the checkout process as we know it.

Does mobile checkout present a real opportunity for retailers to save money and keep up with changing customer expectations? Or is it too early to tell whether the benefits will outweigh the risks? 

Here’s the debate:

Save big money.
The traditional checkout process can be labor-intensive and takes up a lot of space. Mobile technologies could help you to reduce costs and reallocate staff and floor space to increase service levels and sell more products.
Cut your losses.
A new approach to checkout might increase the risk of payment fraud and theft. Will the savings outweigh the risks?
Give customers what they want.
Customers accustomed to one-click checkout at their favorite online stores are becoming less and less willing to wait in line at a traditional cash register. Convenient checkout can make people more likely to buy – and less likely to take their business elsewhere.
Resist change.
High-tech checkout might appeal to young people and early adopters; but many customers are fine with the traditional approach and may not want to change. Also, customers without smartphones might feel discriminated against.
Kick the credit card habit.
Transforming the checkout process may create an opportunity to introduce new forms of electronic payment – helping to reduce the big bite that the credit card companies take.
Mobile-based payments? Don’t count on it.
Creating a viable alternative to credit cards can be a major challenge with a lot of moving parts. For the foreseeable future, the checkout process will likely still revolve around customers paying with cash, checks and credit cards.
Work backwards.
The trick to solving a complex maze is to start at the end and work backwards. When reinventing the in-store shopping experience, it may be smart to begin with the checkout process, which is well understood and can offer immediate and compelling benefits.
Follow fast.
Mobile technologies and the shopping experience of the future are unfolding at a dizzying pace. Instead of investing a lot of time and money trying to hit a fast-moving target, it might make sense to consider waiting for things to slow down.

My Take

Kasey Lobaugh, Principal, Deloitte Consulting LLP
Direct to Consumer and Multichannel Retail Leader

There’s a saying that people tend to overestimate the effects of technology in the short run, but underestimate them in the long run.1

Mobile technology is already changing the way people shop at retail stores and the race is just getting started. In my view, companies with a physical retail presence should start looking for new and innovative ways to exploit mobile technology in an effort to improve the checkout process and the overall customer experience.

If associates and customers can process checkout from mobile devices, the implications for the checkout process as we know it could be enormous. By forgoing the traditional process, retailers could potentially realize significant labor savings, reallocate valuable square footage and even capture savings from credit card interchange fees.

Mobile technology can decrease costs by reducing the need for dedicated clerks and checkout lines. At the same time, it can boost sales by allowing stores to reallocate staff and floor space to value-added selling – and by helping to deliver an improved customer experience. Even a small shift away from the traditional process could have significant benefits.

But thinking about the opportunities in vague, abstract terms may not be enough. In order to capture the benefits and stay ahead of the pack, companies should consider establishing dedicated teams that are explicitly responsible for helping to deliver innovations that make sense for the business. People, processes and technology should be aligned to make the transition to mobile-enabled checkout as smooth as possible. And to make mobile transactions easier, retailers should consider installing or enhancing Wi-Fi to provide customers and associates with better connectivity within the store’s four walls.

Given the pace of change in this space, it might be tempting to adopt a wait-and-see attitude. However, companies that wait for things to slow down may find themselves waiting forever as their competitors – and their customers’ expectations – rapidly vanish over the horizon.

A perspective from the Telecom sector

Philip L. Asmundson, Vice Chairman and U.S. Media & Entertainment and Telecom Leader, Deloitte LLP

Mobile payments are ripe with potential to offer convenience to consumers, new growth avenues to mobile carriers, differentiation to financial institutions and loyal customers to retailers. However, the mobile payment ecosystem in the United States will likely remain underdeveloped for the foreseeable future. Developing a vibrant mobile payments ecosystem that lets consumers use their mobile devices to pay for goods and services is no easy task. Industry players are upbeat, but the challenges are daunting.

Senior executives from across the mobile payment value chain—including retailers, application providers, wireless carriers, telecom equipment providers and financial institutions—are optimistic about the growth potential of mobile commerce in the U.S. According to a recent Deloitte survey,2 these executives predict that in 2012, nearly 65 million mobile subscribers will use their devices to pay for a range of retail goods.
With many other countries far ahead of the U.S. in this area, what’s the holdup? The Deloitte survey suggests the challenges include a lack of consumer knowledge, a dearth of demand, competing platforms and the absence of revenue-sharing agreements between critical players in the value chain.

One solution could be an open federation alliance, which would allow players from different industries to rally around a common vision and use mutually beneficial business models to realize the full potential of mobile payments. In this scenario, mobile carriers, financial institutions, retailers, handset makers, chipmakers, application providers and a host of others would come together on a standardized platform. A trusted third-party manager would play the pivotal role of coordinator and integrator.

Can it be done? Building trust, cooperation and a common set of standards will be challenging. But the rewards—to consumers, retailers, telecom companies and associated organizations—may be well worth the struggle.

A perspective from the Consumer Products sector

Pat Conroy, Vice Chairman and U.S. Consumer Products Leader, Deloitte LLP

The in-store checkout process feels like much more than a simple payment transaction from a consumer’s perspective. It is the culmination of dozens of decisions, careful calculations and often impulsive actions. To many shoppers, the checkout represents a report card on their shopping performance: Did they forget anything? What meals will they be able to prepare during the week? How much did they save via coupons, promotions, or their shopper loyalty card? Did they purchase the right mix of products (e.g., small package size vs. bulk, national brands vs. store brands)? And, are they within budget?

While mobile technologies will indubitably play a role in the payment process, the smile, frown, or look of indifference on a shopper’s face during checkout at the register or self-service kiosk is the manifestation of thousands of steps in the store aisles. The checkout transaction is merely one small part of the beginning-to-end shopping process – and its potential to transform the in-store consumer experience with mobile checkout can only be seen in a broader shopping context. Consequently, I see mobile-enabled shopping as an opportunity for consumer product companies and retailers to give consumers what they want at checkout – a smile on their face. To do that, it means focusing on helping consumers along each of those thousand steps before checkout, including meal planning, shopping lists, loyalty program, product and price comparison, coupons and promotions and navigating the store. Think of mobile-enabled shopping as “whispering in the ear of the time-starved consumer” with helpful advice. Retailers (online and traditional), payment companies, third-party application providers and consumer product companies are building out mobile-shopping functionality along each step of the shopping process including payment, but the winners will provide cohesive shopping platforms that support the consumer with pre-store planning, in-store experience and post-purchase interactions. To truly shift the consumer’s mindset on mobile-enabled in-store checkout requires transforming each shopping step before and after checkout.

1 Amara’s Law;
2 Cell me the money: Unlocking the value in the mobile payment ecosystem, Deloitte Research, 2011

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Overview: Direct to Consumer, Retail


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  • Why Wi-Fi?
    In-store engagement with the constantly connected consumer.

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