Automated Retail’s ‘Fast And Frictionless’ Ambitions

Automation comes to almost every sector of business, sparking visions (and perhaps fears) of robots sweeping floors, flipping burgers and maintaining inventory in the stock room.

However, automated retail is shaded with nuance beyond the confines of science fiction and futurism. The aim is for retailers to become more efficient and responsive to consumers’ needs in real time, allowing them to bring the eCommerce speed of bits and clicks to the world of mortar and bricks.

What’s Changing

In an interview with John Clarke, chief innovation officer and co-founder at Worldnet Payments, it is not technology that is changing consumer behavior. Rather, consumer behavior has already changed, with expectations for the ease of eCommerce to transition to the tangible realm.

As he told PYMNTS, consumers have “already adapted and adopted their shopping behaviors, based on the experiences they have online. Now, they’re looking for retailers to replicate those online experiences in the physical environment.”

Fortunately for retailers, there are techniques and technologies that can be adopted to help them offer that frictionless experience in the physical world. Automated retail, he added, has been able to take some cues from the unattended retail experience, as has been seen at kiosks, the pump, vending machines and other similar environments where consumers navigate product or service selection and payments. Unattended retail has, in some ways, set the stage for automated retail.

So, too, has technology, such as tokenization and registering individuals’ details at the mobile point of sale (mPOS), Clarke illustrated. Retailers have taken app-based mPOS technology, improved security measures and put them all together into “intelligent retail solutions that have had automation at the core,” he said.

The Path To Not Take — And A Roadmap, Too

However, Clarke said, “when retailers get together to put in technology for technology’s sake, and hope that consumers will [adapt] to it, well, that’s quite a risky path to take. When the consumer is already ahead of you, and you’re trying to catch up with them, that’s [a] much more defined goal.”

Against this backdrop, he noted, retailers can set out to find technologies and techniques that allow them to address and satisfy that preference. That’s much easier than putting new technologies in place, and hoping they will take off with the public at large.

One firm that has done a lot to establish a roadmap for retailers is Uber (pun intended). As retailers move toward embracing automated retail, said Clarke, “it’s obvious they’ve been extremely successful in the transport segment.” Other roadmaps and examples can be found in the quick-service restaurant (QSR) sector, where smart kiosks are spurring higher turnover (of orders) and consumer spend as well.

“Every industry is looking at automated opportunities, and saying, ‘How can I benefit from the Uberization of my industry?’” Clarke said.

There’s a ripple effect of such Uberization, said the executive. He noted that more people are employed in the transport industry than had been seen before, so automating certain segments of the economy may, in fact, “open up” and expand verticals.

The Rise Of The Robots?

The jobs themselves may be a bit different from what dominated retail in the past. As Clarke told PYMNTS, the conventional wisdom may be that automation will replace and displace workers. To at least some extent, there will be a sea change felt at the register or in the aisles.

However, Clarke said, “if you note the fact that consumers are voting with their feet on this, they prefer automated retail solutions. This is something that’s going to happen, and, if you have a successful automated retail strategy, it should be to increase the overall size of the retail pie.”

As is germane to human resources (i.e., employees), the entire value chain of the retail employment landscape will shift — toward what he said would be a more vibrant retail sector, marked by specialized skill sets (that can transfer between retail sectors) and higher pay.

“If it is done correctly,” said Clarke, “automated retail’s benefits, in terms of additional opportunity, should outweigh any negatives.”

The Technology Element

To get there, though, requires a blend of technologies, fully embraced by retailers, said Clarke. Drilling down a bit, the elements necessary to satisfy consumers’ need for a seamless payment experience include three separate, but interrelated, technologies: artificial intelligence (AI), Internet of Things (IoT) and contactless payments.

When using AI specific to a retail environment, he said an overriding concept governing its use and deployment includes the mantra “don’t make me think.” Here, too, AI can be used to ensure that transactions are done speedily and safely. “If you don’t want to think in the retail environment,” he said of the consumer who wants the Uber experience replicated across any number of other interactions, “somebody has to do the thinking for you, and that’s where AI comes in.”

The frictionless flow would, of course, be aided by IoT, where a mobile device, home speaker or even a car can be the conduit of commerce in the physical world.

As for the third piece of the puzzle (needed for an eCommerce setting that is as fluid in the tangible realm as it is online), Clarke said there’s a consumer hunger for contactless payments, as evidenced in the embrace of such use cases in mass transit.

“There’s no real need to make a case for contactless where it’s available,” he told PYMNTS. “Consumers use it for a majority of payments [where they can]. So, what we’re seeing in the North American market with the rollout of contactless cards this year” is solution providers scrambling to catch up with consumer preference.

Ultimately, and ideally, he noted, there will be no need to present credentials for all contactless payments. He said mobile devices will become part of consumers’ IDs, which tie in with automated retail, driven by thumbprint authentication or facial recognition (biometrics).

Authentication need be done only of something goes wrong. The initial consumer authentication would be the first step along a string of transactions, “and the security will then travel down through a string of subsequent transactions,” he said. “We’d call it ‘the fast and the frictionless.’”