NATIONAL REPORT — How consumers can pay — and want to pay — for their purchases has changed dramatically, partially driven by the COVID-19 pandemic and partially driven by consumers' quick adoption of new technologies. Retailers are eager to meet today’s high expectations.
Take Amazon, for example. The traditional e-commerce retailer entered the brick-and-mortar space and debuted its "Just Walk Out" technology at its first Amazon Go store in early 2018. The Amazon Go concept relies on cameras and sensors to track what shoppers remove from shelves and what they put back. Customers are billed after leaving the store using credit cards on file.
Convenience store retailers initially were nervous about Amazon Go, but then began rolling out similar contactless checkout options at their stores. However now, just as the convenience channel catches up on frictionless systems, Amazon is at it again. This spring, the company began rolling out Amazon One to select Whole Foods Market stores. This new contactless technology allows customers to shop and pay using just their palm.
Is it just a matter of time before the convenience channel follows suit? The answer is: maybe.
"I think it is our duty as retailers, particularly as convenience retailers, to bring our customers what they want. That means giving the customer what they want in payment options, product mix, and in removing friction and ensuring their transaction experience with us is as convenient as possible," said Jeremie Myhren, chief information officer at Road Ranger LLC, a Schaumburg, Ill.-based chain of travel centers, truck stops and convenience stores primarily in the Midwest.
When considering which payment options to offer, he believes c-store operators must stop and remind themselves of this ethos, and ask questions such as: Is this what the customer wants? Will this give the customer a more convenient experience?
The key priority for c-stores, according to Nick East, CEO and co-founder of Zynstra, an NCR company, is to deliver a better customer experience at a lower cost.
"While biometric checkout helps to replace forgettable passwords and makes payments potentially faster and more convenient, c-stores have to have the right infrastructure to deliver this type of offering quickly, and payments are only part of the value chain," East explained.
"We are seeing significant adoption of self-serve and assisted checkout technologies coupled with a variety of payment methods, such as digital wallets and c-stores’ own mobile app payments, for rapid checkout," he continued. "Although device-based, these forms of payment have been very successful and have accelerated rapidly in c-stores since the pandemic."
He points to mobile app payment; buy online, pick up curbside; buy online, pick up in-store; self-checkout; and assisted checkout as options that are proving very successful already.
"The absolute key is not to alienate sections of your existing customer base. All new checkout technologies currently have to co-exist alongside traditional point-of-sale; thus, a variety of checkout options is best," East advised.
Striking a Balance
Retailers must know their customer base, and recognize that geographic location can make a big difference in technology adoption rates.
For instance, Omaha, Neb.-based Cubby's operates 36 convenience stores in Iowa, Nebraska and South Dakota — mostly in rural areas where customers will likely not be so willing to adopt out-of-the-box contactless experiences like pay-by-palm technology, according to Mike Wilson, chief operating officer.
"If implemented throughout the country, it will probably have a better usage rate in large urban cities, but it will be extremely difficult to implement in many suburbs and rural areas," he said. “Most of our stores are in rural areas and the customer base would revolt."
Road Ranger’s Myhren is a proponent of striking a balance.
"While I tend to agree with some of the criticism lobbed on our industry as being slow to innovate in the past, I think we need to strike a balance between the upside of innovative curiosity and the downside of jeopardizing our core customer value proposition and promise: convenience," he said.
The ideal place for a c-store retailer to be, he maintains, is having a culture and platform in place that enables the operator to be a fast follower.
"Our customer doesn't look to us to show them the future, so long as we keep convenience at the center of our offer and we don't lag too far behind," the technology veteran said. "So, with all that in mind, let Amazon test the market appetite for biometric payment and identification, and let's watch very closely. If it becomes apparent this is indeed what the customer wants, I think we need to honor that and get to work on it."