COVID-19 has undoubtedly brought a lot of changes into our lives. One of these is the way we shop for products. As innovations such as mobile wallets, QR codes, digital receipts and scan and go emerged and began to reshape the consumer shopping experience, the definition of a frictionless shopping experience has become something beyond just hassle-free shopping experience.
It means greater speed, personalisation, and experiences that delight the customer. I believe there are three innovations that are helping retailers to create a truly frictionless shopping experience for their customer.
QR codes and digital receipts
A Quick Response (QR) code is a two-dimensional code that can be scanned and read by a smartphone camera. The strongest adoption of QR codes for payments has been in Asia, with digital wallets like AliPay and WeChat Pay experiencing rapid growth. The 2020 WorldPay from FIS Global Payments Report found that in 2019, mobile payments using QR codes drove nearly half (48%) of point-of-sale payments in China.
However, the technology saw a resurgence in Australia during the COVID-19 pandemic as businesses and venues widely adopted QR codes to register their customers. In February eftpos announced plans to roll out a QR payments network across Australia, in a move to help lower merchant costs and widen contactless payment options for consumers.
The network will work by generating unique QR codes containing transaction details that customers can capture on their mobile phone to make a digital wallet payment. It’s technology designed to simplify the checkout process even further as debit card holders can make purchases online, via their mobile phone or in-store, without having to manually enter their card details.
An early-stage Australian start-up called TAGR is also hoping to make QR codes a more common feature of the shopping and paying process. The company has created a self-checkout web app, thus making it quick and simple to for customers to scan the product barcode or store QR code. The YouTube video shows that customers pay for the product via their phone and then show the digital receipt to the merchant as proof of purchase.
Like QR codes, digital receipts are also being rolled out in retail stores in Australia in order to make the customer’s shopping experience more seamless. Recently, Chemist warehouse announced they had partnered with Slyp digital receipts, which was a clear indication to the rest of Australia that paper receipts are soon to be a thing of the past.
From last month, Slyp’s digital itemised tax receipts, known as ‘smart receipts’, will now be offered to NAB mobile banking app customers when they make purchases at the Chemist Warehouse. This is made possible through the integration of Slyp with a retailer’s point of sale system to send an itemised receipt to eligible consumers.
Click & Collect
Click & Collect has the potential to remove frictions in the online shopping experience by reducing the cost, uncertainty and time for home delivery. Click & Collect took off at the start of the pandemic as lockdowns virtually transformed the role of online retail overnight.
Furthermore, Click & Collect has evolved to include contactless options such as drive-and collect, in which staff deliver goods directly to a customers’ car. For example, at Dan Murphy’s you can now order online, enter your car number plate, drive to the store and wait for staff to deliver your order direct to your boot.
Similarly, Woolworths’ drive-thru service allows customers to order groceries online and then when customers arrive to collect their shopping, they can alert staff via the Woolworths app or SMS link to notify the store team who will then pack the order directly in the boot.
Scan and Go
Just like the idea of frictionless retail itself, cashierless technology isn’t new. Amazon debuted its Go technology (sometimes referred to as “just walk out”) in 2016. But only recently has this technology reached other retailers and the technology has exploded in 2021, globally.
In the UK for example, Tesco is to open its first checkout-free store with cameras and an app instead of tills. The state-of-the-art innovation will allow customers to pick items off shelves and walk out. The move comes at time when tech giant Amazon is investing in till-free shops, opening five Amazon Fresh convenience stores in London so far in 2021.
There isn’t any sign of these stores coming to Australia anytime soon though. Juniper Research forecasts that retail spend at frictionless payment stores like Amazon Go will grow from an estimated $253 million in 2018 to over $45 billion by 2023. The research company expects most of these transactions to be in convenience and general stores, with an average transaction value around $30 per visit throughout the forecast period.
In Australia, Woolworths Scan and Go have recently announced that they will launch the Scan&Go feature for the first time in South Australia. This means shoppers will soon be able to pay for their shopping via an app. Woolworths Rewards members will soon be able to scan products on their smartphone as they shop, pay in the Woolworths app, and scan a QR code in a dedicated Scan&Go lane to complete their shop.
In the US, Sam’s Club has taken the concept one step further and announced that it is piloting new Scan & Go technology that explores an additional way to seamlessly get merchandise from a club location to a member’s front door.
The pilot program, called Scan & Ship™, is integrated into the retailers popular Scan & Go feature within the Sam’s Club app and will allow members to place direct-to-home orders in the aisle by scanning merchandise included in the program. This new development massively disrupts the warehouse model but the additional convenience that it gives to the consumer adds a new dimension to a customer’s retail experience.
The frictionless retail experience is on the cusp of changing the way customers shop forever. If what we are seeing in the UK and US is anything to go by, more and more stores in Australia will be integrating technologies this year that enable a more frictionless shopping experience for the consumer. Retailers that are not evolving and adapting to this new way of shopping could well and truly be left behind.
Radinck van Vollenhoven is managing director for Australia and New Zealand at Stocard.