Heather Altepeter is the Chief Executive Officer (CEO), Founder and Owner of National Merchants Association (NMA).
The retail space is undergoing a technological transformation in the face of labor shortages and changing customer demand. A recent study shows that 66% of in-store shoppers desire a nontraditional checkout experience, enabling them to shop at their own pace. Forward-thinking retail environments must pay close attention to unattended payment options to sustain their business models.
Types Of Self-Service
Self-service and digital payment options saw a steep rise in the wake of the pandemic, where limiting payment touchpoints equated to a reduction in potential infection. Now, in an environment characterized by inflation and a lack of workers, I notice that companies are further heightening their ability to provide self-service experiences.
Options include:
• Self-service kiosks like self-checkout machines, which allow for faster transaction times through increased network connectivity, digital wallet options and insightful display features.
• Scan-and-go technology which tracks items in real time and allows customers to pay on their phone as they leave the store.
• Unattended environments such as vending machines, laundry services and public transportation kiosks, which give individuals the ability to complete a transaction without any employees onsite.
• Autonomous stores which provide 100% contactless shopping and a frictionless checkout experience.
Regardless of which option a company chooses to incorporate, it is important to ensure you have the right payment software solutions and technology in place to support the experience.
The Evolution Of Unattended Payment Options
Previous iterations of unattended payment options, like vending machines, have had to support a range of legacy payment options. I have seen acceptance of cash or the need for a printed receipt cause continual friction.
Today’s automated digital environment is enabling a new age of payment processing options in the unattended retail space. Contactless payments account for eight in 10 consumer interactions, and the ease of use for digital wallets is why nearly half the world’s population is estimated to use them by 2024.
Companies need to ensure they have the software to handle these opportunities, including:
• Point-of-sale (POS) terminals equipped with EMV chip technology for contactless payments.
• Mobile POS options which allow payments to be collected via mobile devices paired with a card reader.
• Tap-to-phone mobile POS options, which eliminated the card reader terminal and instead transacted directly between a customer’s mobile device and the store’s.
• Security protocols to help protect card-not-present transactions.
By incorporating digital solutions into payment processing, retailers can conduct business transactions seamlessly and with long-term benefits.
The Impact Of Unattended Payment Options
Accepting electronic payments has been connected to a rise in customer satisfaction. A study by PYMNTS noted that 77% of shoppers are more willing to patronize retailers with scan-and-go payment options.
Self-service options also enable limited employee involvement, resulting in labor cost savings and increased operational efficiencies. For instance, fast food restaurants have installed self-ordering spots inside restaurants, allowing their employees to focus on food service and preparation rather than taking customer orders.
Another area that retail vendors often grapple with is how to utilize their space effectively from storefront to warehouse. Unattended environments have a minimal footprint, so companies can adjust their space for better product flow and sale potential. These are just a few of the ways unattended payment technology can benefit a retail environment. But what could it look like in action? Take a look at robot servers and food runners equipped with AI camera technology to avoid obstacles and move around objects. Over time, the benefit could really add up.
Challenges Retailers Face When Implementing Self-Service Payment Options
While providing a self-service payment experience is aligned with consumer needs, there are a number of challenges facing retailers. Customers believe self-service options are impactful when the experience is seamless. However, 67% of shoppers say they’ve experienced a failure in the self-checkout lane. The reality is most self-checkout stations are not truly autonomous. And while they do lead to a decrease in the number of traditional retail roles, like cashiers, today’s self-checkout options still require staff supervision.
Another challenge is the high startup cost, as the machines are often expensive to install, making it almost impossible for smaller merchants to modernize at the same rate as retail giants like Walmart, Target and more.
However, not all installations of modern payment systems need to be strenuous or costly. At a minimum, retailers should consider implementing contactless options like Apple Pay. The more seamless and frictionless you can make checkout and the user experience, the better. Customers will enjoy the fast, secure and accessible transactions, and you might even have success converting one-time customers to regular shoppers. In addition, smaller merchants can research contactless kiosks that offer no up-front costs.
The reality is companies are operating in an ever-changing business climate where modernization and automation will be critical to success. And with over 60% of retailers investing more into expanded payment options for customers, creating an innovative retail experience will be necessary for the stores of the future.
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