The COVID-19 pandemic has challenged grocery stores, which must now find ways to serve high consumer demand while maintaining safe retail environments for customers and employees. Determining how to increase convenience and speed up checkout lines has been their goal long before the crisis, however.
Many innovation-focused players believe faster and more streamlined payments will be key to the future of shopping. Checkout line lengths often negatively influence consumers’ decisions to shop. Payment solutions providers have been seeking to evolve commerce by reducing those lines with faster transactions, according to Andrew Radlow, chief business officer for checkout-free shopping technology provider Grabango. The startup’s offering enables customers to pick items off the shelves and walk through supermarket and convenience store checkouts without stopping, charging purchases automatically to app-based accounts.
The solution is in its early days, Radlow explained in a recent interview with Fintech Zoom, with just three grocery brands testing the technology in select stores during 2019. Many considerations went into the offering’s design, however, as there were plenty of potential difficulties to overcome when implementing grab-and-go shopping.
Fighting Lines With Faster Checkout
Grocery store customers can be especially sensitive to the inconvenience of long checkout experiences, Radlow said. He believes reducing cash usage and removing the need to swipe or insert cards or tally items at checkout can present the time-saving opportunities customers demand. The average grocery shopping trip is 25 minutes, he said, and customers seem to have little appetite for making their journeys last longer.
“The No. 1 objection is lines at checkout,” Radlow explained. “During the peak hour of every week, a grocery [store] experiences 11 percent abandonment. That’s mainly people coming in the front door, seeing the long lines and turning back around and leaving — not necessarily those who fill up a shopping cart and leave, although there is some of that as well.”
Grabango utilized a computer visioning-based system that uses cameras to detect and identify items customers pick up and put in their shopping bags. Consumers can skip handing payments to cashiers or unpacking their selections at self-serve checkout kiosks, as the system automatically charges them for items not returned to shelves.
Customers must sign up and link payment methods into Grabango’s app — or those of retailers that have integrated the solution — to participate. The company had to ensure that its offering did not produce additional friction, such as the system mistakenly charging consumers for items they did not intend to buy. One way around this was to only apply charges and generate receipts when customers neared cashier stations, Radlow said. Customers do not need to interact with traditional cashiers, but they still need to go through the line.
“The cashier station [also] has to be active, otherwise [the purchase] doesn’t go through,” he noted. “Our system intelligently determines if [that station is] active. Part of that is determining that it has a cashier present, which is [visually] detected by the system.”
The grab-and-go payment system was designed with the assumption that cashiers will still be staffed, partly because generating payment solution uptake relies on meeting consumers where they are rather than jumping into full adoption. Shoppers who do not wish to register payment credentials in the app can still use the service to record the items they have purchased and obviate the need to scan the goods at checkout, for example. Their item selections are instead transmitted to the cashiers’ point-of-sale (POS) systems when customers approach, reducing the interaction to only the payment portion.
Creating a solution that worked with existing POS setups was also important, ensuring that Grabango’s product could support returns and refunds through those same POS systems without requiring retailers to adopt additional software.
Selecting Payment Methods to Encourage Adoption
Meeting customers where they are also requires addressing their differing payment concerns. Consumers who want to use automatic payments must register and prove their identities, which prevents fraudsters from uploading stolen debit cards into the app. Some consumers prefer to remain anonymous and elect to only use the goods tracking part of the service, while others don’t mind the system knowing their identities.
Serving that latter group also means empowering them to pay with the instruments they prefer. Radlow said his company started by accepting the digital payment classics — debit and credit cards — but is working to determine whether shoppers may want to pay with other options. He noted that the company could add features that enable shoppers to load cash into their accounts or pay with government assistance like Electronic Benefit Transfer (EBT), the Supplemental Nutrition Assistance Program (SNAP) or the Special Supplemental Nutrition Program for Women, Infants and Children (WIC). Radlow also envisions that P2P payment services might someday be offered in the app.
Grocery stores and the payments providers that serve them are continuously looking for new ways to improve customer experiences and advance more convenient forms of shopping. Making these trips as quick and painless as possible may require introducing new payment options, however. Those that ensure these future checkout methods offer compelling levels of speed and easy adoption will be well-positioned to drive this change forward.