“[Advanced payments] is our biggest pain point… This is not only the biggest pain point of Farfetch, but of retail,” said Sandrine Deveaux, managing director of store of the future at Farfetch.
Nearly 70% of affluent shoppers research products online first and roughly 90% of shopping still happens inside stores. The latter number is expected to drop to 75% by 2025. Additionally, about 80% of the shoppers are willing to share their data with companies that they trust.
In-store frictionless payments are going to be vital in the future of retail and an increasing number of companies can be seen investing in retail technologies such as ‘Scan-and-Go’ and ‘Just-Walk-Out’.
Wave 1 – Scan-and-Go
Scan-and-go refers to scanning and paying for products using a mobile device. With regards to this technology, Tom Gehani, director of client strategy and research at L2 said “A lot of conversation has been happening [about how] this will be cost saving because of fewer cashiers. Retailers that will win are going to take labor savings and put that to other store labor, like ensuring security, [that the] shelves are full at all given times and helping customers on the floor.”
However, the scan-and-go model is not one without issues. Concerns like managing security and preventing theft have been detrimental to the implementation of this technology.
Wave 2 – Just-Walk-Out
An alternative to scanning the items and exiting the store is to simply pick up the items and walk out.
In December 2016, Amazon Go decided to test out this technology at its own checkout-free physical store. Even though a tech giant like Amazon is unlikely to scale such a technology in the near future, the world of retail has its eyes on what Amazon will do next.
The ‘Just-Walk-Out’ technology aims to use artificial intelligence, facial recognition and body movements to understand what products are on the shelves and how they move around the store. Given the high cost of implementation, this technology is unlikely to find its way in all stores in the near future.
Wave 3 – Combination of multiple technologies
In the next wave, retailers will use a combination of facial recognition, artificial intelligence and the ability to recommend products.
“As you trust a retailer, imagine walking in and it recognizes [my] face. It knows my loyalty, my offers, my purchase history. I don’t even have my phone on me, it’s in the car. Potentially using voice recognition, an associate could walk up and say Hi Mr. Miller,” said Brandon Miller, a Forrester analyst.
Mobile devices and artificial intelligence are going to become a big part of the checkout process and companies like Walmart, Amazon and Macy’s are working towards integrating these technologies in their businesses. Retailers that think otherwise are failing to understand the changing consumer behaviour and should jump on the bandwagon before it’s too late.
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