USAT: Bridging The ‘Consumer Gap’ In Unattended Retail

Mind the gap, as the saying goes. In this case, it’s the gap between interest and intent, the chasm that lies between consumer awareness of unattended retail and actually taking the plunge in buying at the kiosk and vending machine.

In an interview with Karen Webster, Maeve McKenna Duska, EVP at USA Technologies, said that ambitious retailers have an opportunity to seize valuable market share within a relatively underdeveloped channel of commerce.

At a high level, according to PYMNTS data, unattended retail is reaching only one-tenth of its potential. As much as 20 percent of the consumers surveyed said they harbored an interest in buying a wide variety of offerings through unattended settings, yet only 6.9 percent of the population has bought anything through that channel in the last three months. Overall, according to the study, about 49 million consumers want to transact through unattended channels, but only 14 million have done so.

As McKenna Duska told Webster, “If I am a retailer, and I look at those statistics, for me, that translates into an opportunity gap.”

Part of the problem is that retailers have been tentative in trialing kiosks and vending machines in field locations, so to speak, well beyond the self-checkout locations in-store.

The lack of ubiquity for unattended shopping experiences is proving a drag on potential, said McKenna Duska. Consumers have shown that they enjoy the experience (the speed and convenience of it all), and they want to buy what might be thought of as “non-traditional” items at the machines, too, ranging from books to clothes to electronics.

There are a few success stories to emulate. Consider the airport, she noted, where everything from earbuds to cosmetics are offered to satisfy last-minute impulse buys from travelers.

Hurdles For Larger Merchants

Generally speaking, though, “I think the disconnect is in the mind of the retailer and their business model,” McKenna Duska said of the opportunity gap, adding that it may be more acute for larger retailers.

As she noted, the bigger the ship, the harder it is to change course. She pointed to the fact that big-box stores are essentially in “an experimental mode right now, but haven’t really gotten their arms around the changes they need to make to really scale an unattended retail-type kiosk or experience for consumers.”

For these traditional retailers, the natural extension into unattended retail has been to have self-checkout lanes and kiosks. There’s always the safety net, however, of having inventory on hand to satisfy demand that materializes, as well as staff roaming the store to answer questions or address issues at those self-service locations.

The path has been a bit smoother for smaller, more entrepreneurial companies that don’t have to shift business models, but can make the leap right into unattended retail.

Whether large or small, there’s incentive for companies to add unattended retail as a dedicated channel — particularly since the data found that individuals with the highest incomes were most interested in trying unattended shopping experiences. McKenna Duska mused that these consumers are looking for a quick in-and-out experience, know exactly what they want or are pressed for time.

Across demographics, she said, “gone are the days of looking for a very high-touch retail buying experience.” Consumers are doing research, getting ads and participating in comparison shopping across their hand-held devices. They have been reconditioned by constant interactions with technology — and are, thus, more comfortable transacting across hardware and software.

The Payments Part Of The Puzzle

That familiarity with tech also touches on the subject of transacting digitally — across mobile wallets, for example. With a nod to the study’s findings that 78 percent of digital wallet users want to make non-traditional unattended retail purchases, McKenna Duska said that digital payments will gain ground with younger consumers, especially Gen Z and millennials.

For now, Google Pay and Apple Pay may have overestimated the consumer response to those digital payments’ uptake, she noted, so more education is warranted. There may be some tailwind, though, as an increasing number of kiosks now only accept digital payments — so visits to the post office to get stamps may see rummaging through pockets for coins and bills as a thing of the past.

McKenna Duska noted, too, that the data showed consumers who use digital wallets in a self-service setting tend to spend more than if they used cash — and higher spend is something that every retailer wants.

The Roadmap

To capitalize on the potential, and fill the unattended retail gap, McKenna Duska recommended that merchants partner with technology providers that can help achieve scale, as well as manage the tasks of keeping machines stocked and serviced.

“It takes new resources. It takes a different kind of employee base, and it takes somebody who’s going to oversee all of this to make sure that it’s successful,” she told Webster. Done effectively, kiosks and vending machines act as “giant billboards” for a merchant.

“It isn’t just about the quantifiable sales. … It’s also reminding customers that their brand is ‘there,’ and there is brand affinity. … The retailer needs to determine how [it] can build this path forward to unattended retail,” she said, “so [it] can make this part of the business model of the future.”