Is Mobile Self-Checkout Ready for Takeoff?

Is Mobile Self-Checkout Ready for Takeoff?

Is Mobile Self-Checkout Ready for Takeoff?

Charles Keenan

Charles Keenan

Charles Keenan has written about payments since joining the American Banker as a staff reporter in 1997, a time when automated teller machines were appearing just about everywhere but people's living rooms thanks to the relaxation of surcharging rules.

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While mobile self-checkout has had plenty of false starts over time, this year might be different.

In September, Sam's Club rolled out a nationwide app that allows customers to checkout and pay for items without having to go to a register. Dubbed 'Sam's Club Scan & Go,' the app has garnered strong reviews so far, with an average of more than 4 stars as of last month.

Other major retailers are rumored to be laying the groundwork to offer mobile self-checkout, since they can leverage smartphones rather than investing in scanning equipment themselves.

"You can easily roll out a highly personalized solution from one store, to several thousand stores," says Samuel Mueller, chief executive officer of Scandit, a Zurich-based provider of a self-scanning software for mobile devices. "That is a big part of the appeal."

Ubiquitous self-checkout?

The success of mobile checkout at Sam's Club shows the practice might become ubiquitous soon.

Europe has already been leading the way. Scandit's product is currently being used in 1,500 stores worldwide and 20 chains, at grocery store chain owners such as Coop Retail Group in Switzerland and Albert Heijn in The Netherlands. Scandit is working with a handful of U.S. retailers, but declined to say which ones. Yet Scandit's website shows retail logos of clients such as Home Depot, Party City and Sephora on its page for self-checkout products.

"We are definitely seeing in the U.S. an uptick in interest, which is quite pronounced," Mueller says.

Most large retailers that have invested in their apps and see digital as a key strategy are likely considering mobile checkout as an add-on. Digital Retail Apps, a Toronto-based vendor, was in conversations with several large retailers with more than 1,000 stores in mid-September.

Slow progress so far

Until now, vendors of self-checkout apps have faced a hard time getting their product into retailers for a number of reasons. Primarily, retailers have been preoccupied with developing mobile apps themselves. Many big store chains were involved in the now-defunct MCX consortium, whose CurrenC mobile wallet initiative aimed to offer consumers another way to pay. Security concerns of people sneaking out the door — which has been a problem with traditional self-checkout stations — has also caused retailers to proceed slowly.

There's also the issue of the integration of a self-checkout feature with the back end of the retail store. It's a big undertaking to get all consumer endpoints to be linked in real time, requiring either a partial or full adoption of cloud computing, says Wendy MacKinnon Keith, founder and chief executive officer of Digital Retail Apps. The data also must be available across the organization in a form that's consumable by third-party vendors that have software development kits (SDKs) or other software that can enhance the retailer’s shopper-facing functions, she notes.

"To enable shoppers at self-checkout, retailers need to have data that can be shared, especially product and shopper data, regardless of channel," MacKinnon Keith says. "It has to be in a form that's accessible in real time and across multiple kinds of devices. It's a pipe dream without being able to have that."

Yet retailers have all the reason to figure it out, as an increasing part of their revenues are coming from mobile. U.S. mobile commerce sales are expected to reach $98 billion this year, up 29 percent from 2015, according to eMarketer. Mobile sales will account for 25 percent of all e-commerce this year.

Value for retailers

On a smaller scale, mobile checkout has lived quietly in pilots and bite-sized ecosystems. FutureProof Retail has tested its app this year at an independent grocer in California. Digital Retail Apps has been running its SelfPay product at Lux Beauty Boutique, a cosmetics store in Edmonton, Alberta. For Lux's busy shopping days and events, users of the app can check out without having to go to the register. The store can also use SelfPay Staff, an app for employees to monitor and verify purchases, to check out customers when the store is jammed. Since Lux prides itself on the relationship with its customers, the staff version allows for interaction and building rapport, says Jennifer Grimm, founder and owner of Lux.

"Where we as a business have really benefited from SelfPay is particularly on the busy, crazy days," Grimm says. "We are a small space and only have one till. The longer people are waiting in line, the less time they are spending shopping, and it's physically blocking people from entering the store."

Vendors have also worked to assuage retailers on the potential issue of thieves pretending to pay and walking out of the store. Vendors offer apps or SDKs that will allow employees to monitor transactions — something SelfPay Staff already does. Vendors can also have retailers set up self-checkout zones, where the payment is verified at a kiosk with a barcode generated by the app on the customer's phone. Having an employee stationed near kiosks can also help, Mueller adds. "That mere presence seems to be enough of a deterrent," he says.

Given the recent momentum, mobile self-checkout could go mainstream in a short time.

"We're going to soon see an increased proliferation of mobile apps that allow transactions to be completed before consumers get to the checkout line," MacKinnon Keith says.

The statements and opinions of the writer do not necessarily reflect those of TSYS.

Other Articles by Charles

Charles Keenan

Charles Keenan has written about payments since joining the American Banker as a staff reporter in 1997, a time when automated teller machines were appearing just about everywhere but people’s living rooms thanks to the relaxation of surcharging rules.

His work at the American Banker included writing about credit and debit cards, merchant processing, and bank stocks. He later freelanced for the Banker and industry publications such as Banking Strategies, Bank Director, Community Banker, and U.S. Banker. He also writes about investing, insurance and health care, and is based in Los Angeles.

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