According to a recent PYMNTS survey, most U.S. and U.K. retailers believe that their ability to replicate the frictionless shopping and payment experience of eCommerce in-store is critical for maintaining customer loyalty and engagement.
The report, “Big Retail’s Innovation Mandate: Convenience and Personalization,” a PYMNTS and ACI Worldwide collaboration, revealed that 87.2% of U.K. retailers think that consumers would be very or extremely likely to switch merchants if barcode or QR code scanner apps, for example, were not provided. Asked about the ability to scan products and pay without standing in line, 36.9% said consumers would switch if that feature were not provided.
Get the Report: Big Retail’s Innovation Mandate: Convenience And Personalization
The latter is telling because frictionless checkout solutions that allow customers to scan items as they shop and pay upon leaving are on the rise globally and no less in the U.K.
For example, London-based online payments company Checkout.com recently announced that it had entered into a partnership to develop till-free mobile checkout technology with Sainsbury’s, the U.K.’s second-largest grocer by market share.
Related news: Sainsbury’s Taps Checkout.com for Mobile Checkout
As well as allowing shoppers to scan items as they add them to their cart and pay with their mobile wallet, the new app, known as SmartShop, connects to Sainsbury’s Nectar loyalty scheme.
Self-scan-based supermarket tech has a significant advantage over other frictionless checkout solutions that follow the Amazon ‘Just Walk Out’ model requiring each store to be kitted out with an array of cameras and sensors. This scan-as-you-shop technology works alongside till-based checkouts without needing expensive refits or store closures to implement.
Like several of the U.K.’s leading grocery chains, Sainsbury’s already has a device-based self-scan system up and running in most of its larger branches. And by introducing a new version of SmartScan that works on a mobile app, the retailer joins Waitrose, another major U.K. supermarket chain, in facilitating more convenient, smartphone-based in-store shopping.
But while Waitrose’s Quick Check app still requires customers to visit a self-checkout kiosk where they scan a barcode on their phone to make payment, Sainsbury’s new solution creates a more connected shopping experience by enabling on-device payment, eliminating the need to queue.
While grocery stores in the U.K. are embracing more and more digital tools, PYMNTS’ research suggests the country still lags behind the U.S.
American retailers used an average of 5.3 digital tools, whereas U.K. retailers used an average of 4.7. Retailers in the U.S. also reported a higher rate of satisfaction with the digital tools they use and their customer experiences than their U.K. counterparts — 56.3% and 43% respectively.
While the U.K. falls slightly behind the U.S. in terms of adoption, British retailers still show a decent appetite for innovation. Over 70% of those surveyed reported that they are currently innovating in the payment methods they offer, while over half said they are innovating in the area of data analytics.
Related: 3 Ways Retailers Just Proved That Innovation and Change Are Still Alive
Ultimately, it’s in data that the true value of checkout solutions like SmartScan lie.
Sainsbury’s has been doubling down on its efforts to make the Nectar loyalty program more personalized, with rewards and tailored offers based on individual consumers’ spending habits. Users of the new app must link it to their Nectar to sign up, making the collection of purchase data automatic.
This removes the additional step of presenting a separate loyalty card or app, which has been a limitation on retailers’ efforts to amass the comprehensive user datasets needed to create the most accurate customer profiles.
Loyalty schemes are key because they are how retailers identify each unique customer, even as they shop across online and offline channels and pay with multiple methods. The challenge for merchants is to connect information from across different payment systems without interrupting a seamless checkout experience.
Like Sainsbury’s and other British retailers looking to develop new checkout solutions, partnering with payment technology firms like Checkout.com appears to be a popular option. A PYMNTS’ survey found that 63% of U.K. retailers plan to completely outsource payment method innovations.
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