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Will Australian businesses ditch the checkout?

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Australians have become well familiar with self-checkout systems since both major supermarkets introduced them a few years ago, but is the country ready for the entire retail industry to start adopting them?

And if that’s the way things are headed, what should retailers start doing to prepare for an environment where shoppers expect a seamless, cardless and cashless transition?

“Online retailers have known for quite some time that the checkout is the most sensitive part of the conversion process,” says Paul Greenberg, founder and executive director of the National Online Retailers Association.

“The checkout is where people jump…and I think there’s a big conversation for room for improvement within retail for that frictionless checkout.”

Checkouts becoming less static is a trend that’s been happening in Australia for years. Along with the supermarkets, retailers including Apple and Country Road have experimented with allowing customers to buy products from wherever they are in the store.

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This trend isn’t going away, either. McKinsey partner Michael Chui said recently that when the seamless checkout works well, “it will feel like stealing”. And as MIT points out, seamless checkouts are already underway in China. Amazon’s “Go” stores in the United States (currently in pilot stage) will have no more than 10 people per shop.

It’s clear this trend is trickling down from the top. But should traditional retailers be preparing?

Paul Greenberg says yes. He points to the rise of cardless conversion in apps like Uber, which he says will have an impact on how customers will carry over their service expectations from one vertical to another.

“In many ways I think we owe Uber a debt of gratitude for that,”’ says Greenberg. “You go to an offline store, and watch what the store assistant has to go through – it’s like a tango on the screen.”

“POS is one of the many legacy issues in retail, and they’re still behind.”

Greenberg says retailers first need to understand that people will come to expect frictionless checkouts as they use more apps that allow them to do so – even if they’re comparing online and offline stores.

Secondly, he says, businesses need to start thinking about the types of technology they can start integrating in their stores that will allow them to experiment, or at the very least, see where things might work in the future.

“RFID (radio-frequency identification) is coming and dropping in price, augmented reality and 360-degree scanning of shopping baskets are all a heartbeat away,” says Greenberg.

Greenberg also makes a clear distinction for retailers: they need to be able to discern when a frictionless checkout is simply making the customer do extra work, as opposed to a checkout system that could offer them more options.

The supermarkets, Greenberg says, are moving work from the company to the consumer by having them bag their own groceries. Without enough staff to supervise and make sure things are going well, that can easily lead to a negative reaction.

Getting that balance right is crucial, he says. SMEs need to start thinking more about what actions they can assume, and what actions they can ask their customers to do for them.

“It just has to be smooth, and it has to be frictionless.”

Mastercard

Mastercard seeks to help as many Australian retailers as possible, to grow their businesses by embracing all forms of payment to provide customers the choice to make transactions whichever way they want to, with no restrictions.