While it is easy to imagine the path of progress is ever forward, often in the innovation game it is a bit more like the Paula Abdul hit song from the late ’80s — two steps forward, one step back.
That was on display this week in payments and commerce, as cashless jumped forward in Atlanta with a big partnership, only to get the cold shoulder in Philadelphia where it is now banned by law. Amazon’s expansion into physical commerce was a similarly non-linear progression: news that the retail giant was expanding its grocery efforts beyond Whole Foods came right before the firm announced plans to scale back its pop-up shops.
So where were those moves, and where did everyone end up?
Cashless Coup
Digital payments primacy got a boost this week with the announcement that Mercedes-Benz Stadium in Atlanta is about to become cashless. In an attempt to lower prices and boost convenience, as of this week the stadium will only take credit cards, debit cards and mobile payments.
“There is a significant amount of effort and cost that goes into the handling and accountability around cash that will get completely removed from the equation,” Steve Cannon, chief executive of Falcons’ owner AMB Group, said. Apart from lowering cost, AMB also noted the move would make transaction times quicker and provide more flexibility for price changes.
To serve the “underbanked,” the stadium will have roughly 10 machines that will let users exchange cash (ranging from $10 to $1,000) for a prepaid Visa debit card.
“If we have to make any adjustments or pivots, we will be able to do that before [the] Falcons’ season begins,” Cannon further said, noting the goal is to make the stadium environment inclusive and welcoming to all fans.
But is cashless inherently unwelcoming to the unbanked?
The city of Philadelphia certainly worried it is …
The City Of Brotherly Love Does Not Love Cashless
Lawmakers in Philadelphia have formally said no to cashless payments, passing a ban on stores and establishments that do not accept cash. The ban goes into effect in July, and will require that shops take physical currency. A similar law recently passed in New Jersey, and it seems New York is on the way to following suit. Massachusetts already has a law requiring cash acceptance.
Philadelphia City Councilman William Greenlee, who introduced the bill, said he thinks the general move toward a cashless city is discriminatory toward lower income individuals and other marginalized populations.
“Most of the people who don’t have credit tend to be lower income, minority, immigrants. It just seemed to me, if not intentional, at least a form of discrimination,” he said. Now stores will be required “to do what businesses have been doing since Ben Franklin was walking the streets of Philadelphia,” he said.
Businesses argue that going cashless improves efficiency and safety, taking away the need to count large amounts of cash or carry big envelopes of money to the bank at night.
The Philadelphia measure does have some exceptions. The law doesn’t apply to garages or lots, Costco, rental-cars or hotels. The law also attempts to appease Amazon with a provision for Go stores by exempting “transactions at retail stores selling consumer goods exclusively through a membership model that requires payment by means of an affiliated mobile device application.”
In other words, because Prime membership is required to use and Amazon Go store, it is exempt from the law. So too, is Costco. Whether other cities will offer similar Amazon Go carve-outs remains to be seen.
Yet another thing Amazon can add to its physical retail dance card — which this week was filling up rapidly.
Amazon Says Yes To Grocery, And No Right Now To Pop-Ups
Amazon is pressing the pause button on its pop-up efforts — it will be shutting down all 87 of its pop-up stores in the U.S. by the end of next month. That means mall kiosks, Kohl’s and Whole Foods’ nooks will all be shuttering.
“After much review, we came to the decision to discontinue our pop-up kiosk program,” an Amazon spokeswoman said.
Kohl’s has confirmed it will be relocating its Amazon merchandise throughout the store, and killing the store-within-a-store concept.
Pop-ups aside, it seems Amazon is not slowing down its retail efforts in the real world. The company has announced plans to expand both its bookstores and its 4-star stores, where Amazon sells high-rated items that people order online.
Amazon’s announcement that its pop-ups are deflating came immediately after news that its grocery ambitions are growing larger.
Recent reports indicate that the eCommerce retailer is looking to launch grocery stores in multiple big U.S. cities — with an LA location reportedly on track to open by the end of this year.
Unnamed sources claim that leases have already been inked for a minimum of two more locations, scheduled for the beginning of 2020.
While it was not specified whether the stores would be branded with Amazon’s name, they will reportedly diverge from the company’s Whole Foods Market brand. The two brands reportedly not compete, and will offer differently priced selections
Amazon is also expanding Whole Foods, though that footprint growth is mostly slated for suburban areas.
The Whole Paycheck war heats up, it seems — and on more fronts.
So what did we learn this week?
The march of progress is ever forward. Until it isn’t — and it goes sideways or (if you are in Philly) back to the days of Ben Franklin.
Until next week!
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