When Apple rolled out Apple Pay 3-1/2 years ago, a great wave of excitement went through the payments and commerce segment, as many touted the beginning of a new era of payments for customers.
Of course, with the benefit of hindsight, we know how that story played out: Apple Pay and the wave of other Pays it touched off (Android Pay/Google Wallets, Samsung Pay, Walmart Pay, Chase Pay, Kohl’s Pay…) generated a lot of buzz, but not a lot of traction. In almost four years, only Walmart Pay has managed to cross the 5 percent regular usage mark – and Walmart made it just barely over that line, with 6 percent of customers having used it on their last eligible transaction, according to the latest edition of the PYMNTS/InfoScout mobile wallet adoption figures.
And, other than Walmart, mobile wallets across the board have failed on the whole to crack the 15 percent mark when it comes to how many of their customers have even tried out their mobile payments platform.
While the introduction of mobile wallets gave customers a new form factor to pay with, they didn’t much change how those consumers paid. Shoppers still lined up in front of cash registers at the front of stores, waiting their turn to pay at the point of sale. At the end of the transaction, they could take out a card and swipe/dip it, they could tap their phone or (in the case of Walmart) could scan a QR code – but 99 percent of the transaction process remained pretty much identical to what it had always been.
Digging a bit deeper into the data, consumers generally reported favorably on the experience of using mobile wallet products, but weren’t so overwhelmingly charmed that it caused much of a shift in habits. They often reported forgetting about mobile wallet options, preferring their cards or being unsure of whether they were able to use a mobile wallet where they were currently shopping.
The form factor change wasn’t enough to replace a process and a product – cards – that were already working well for most users.
But consumers did begin to reset their habits around the phone and commerce, just not around branded mobile wallets. As upgrades to the payment process and more single-tap options began to emerge, customers started using their phones to blur the lines between “real world” and “digital retail.”
And thus began the era of mobile phone as retail line-buster. Customers were able to order and pay for their goods digitally, and then quickly grab their goods in the real world of shopping – sometimes curbside, sometimes at a pick-up area, but always faster than gathering goods and waiting in line.
And the next evolution of that, according to California-based high-end sock retailer Stance, is to allow for instant digital purchases while actively shopping in the store. Consumers with smartphones don’t need to go to the POS, because their phone is the POS.
“Our goal is to offer a hassle-free self-checkout experience in our stores, because that is what we hear over and over again that our customers want,” Paul Zaengle, executive vice president of direct-to-consumer at Stance.
Making it work, however, is a delicate balance, because consumers aren’t just looking to skip the line – they are looking to preserve and prioritize the real estate on their phone. Whereas a few years ago, Zaengle noted, you could fairly easily push a consumer toward downloading and test-driving a new retail app, as of 2018, only the most regular, loyal customers want a store’s app.
So instead of an app-centric interface, Stance provides customers with a URL they can visit while shopping in the store. From there, they can use their phone’s camera to scan the barcodes on product tags. Once they’ve filled their cart, customers can check out via one of several mobile wallet options, or with a credit card (which can be stored).
The web interface acts nearly identically to an app interface, but it’s designed to actually draw in customers. Consumers don’t mind navigating to a variety of sites, as that is already embedded behavior, and they greatly enjoy skipping the line. But they don’t particularly like downloading processes, even if they theoretically like the idea of scanning and skipping items as they go.
There are challenges with this model, notably security. The U.S. retail industry loses over $30 billion a year to “shrinkage,” or the involuntary loss of inventory due to shoplifting, employee theft and administrative errors. The security advantage of the traditional cashier checkout is that it provides a necessary bottleneck that makes it harder to walk out of a store with ill-gotten goods.
According to Stance, implementing their mobile checkout was a relatively straightforward process, technologically speaking, because they were able to easily plug into partner Moltin’s APIs.
But adapting to the challenges of ensuring that customers are scanning and paying for their goods before walking out could prove to be somewhat more complicated.
And customers don’t always love this technology. While Walmart has enjoyed great success with the product at its Sam’s Club locations, it has shelved plans to roll out the technology in Walmart stores, because customers on the whole found that the entirely self-directed checkout process was more of a hassle than a benefit. They actually preferred to have help with bagging and weighing grocery items.
And while apparel shopping at Stance is somewhat different than grocery shopping at Walmart, it remains to be seen if their customers like scanning as they go, and whether there is a secure yet smooth way to offer the service.