After resisting the world of mobile payments for what seems like an age, Apple Pay is finally here, launching in the UK last month.
Following a somewhat stilted start in the US, all the evidence suggests it will be significantly more successful here. And, if this turns out to be true, it won’t just change the way shoppers pay for goods and services – wide-scale use of mobile payment technologies like Apple Pay promise to revolutionise the way we shop entirely.
So why will Apple Pay be more successful in the UK, and why will it have such an effect on the way consumers shop? First and foremost, Apple has already announced availability in a raft of popular UK outlets like Waitrose and Marks and Spencer – compare this to the US where the firm has struggled to secure these types of retailer partnerships and is still to strike deals with big brands like Wal-Mart and Home Depot.
What’s more, shoppers in the UK are far more open to, and in a better position to adapt to new ways of paying. This is a result of proportionally higher smartphone ownership and the fact we’ve had greater exposure to new payment technologies – Chip and Pin is still years behind in the US, for example, and the country’s retailers have also been slower to take up contactless payments.
If shoppers and retail brands do embrace this kind of technology, the resulting changes will be significant, stretching beyond the checkout across the entire in-store environment. On the payments side, it could herald the emergence of more pay on delivery/pay on collection style services that are popular on the mainland Europe. A more drastic change may involve the checkout desk itself becoming obsolete, enabling customers to do a wireless bulk-scan to pay and de-securitise their merchandise.
Another way this kind of till-free shopping may occur is through the introduction of sales assistant operated shop floor iPads loaded with software allowing them to process transactions. These types of developments are likely to be part of broader ‘webification’ initiatives.
Where once retailer websites would try to replicate in-store shopping, webification refers to the growing trend for brands to integrate online features with real world stores. Recent news about the launch of Facebook Beacons – transmitters that can identify and communicate with smartphones, tablets and other devices – is another example of the way that this trend is progressing and also shows the method by which brands can track in-store activity and activate digital elements at appropriate times. An example of this in action could see you walk past a digital display, which is activated by an item you are holding, prompting it to suggest complementary products on-screen.
Alternatively, brands may ask you to allow them to use Beacons and your mobile phone to recognise you and your presence via your online customer account. While associated privacy concerns may worry some, the syncing of online and in-store shopping data will allow those who opt in to benefit from improved levels of customer service.
Other webification features include online-style inventory browsing and personalised recommendations, both delivered via the previously mentioned sales assistant iPads. Again, by opting to link up your online and in-store shopping, we can look forward to the day when sales assistants have the tools and knowledge required to provide customer service that is both informed and truly tailored to individual shoppers.
Combining the power of ecommerce recommendation with human intelligence, retailers will also be able to prevent online shopping annoyances like when you are repeatedly recommended products you have long lost interest in on the basis of you having viewed it one occasion.
However, while webification promises a lot, we shouldn’t expect it deliver perfect retail experiences right away. This is a new world for customers and retailers alike, one in which brands will need to experiment to get things right, but will more than likely get a few things wrong in the process.
Putting tablets into the hands of a shop assistant may actually make them seem more intimidating to customers so investment in staff and customer education will be required to ensure this is not the case. In addition, while contactless payments trebled in 2014, reaching a sum of £2.32 billion, there are still segments of society which are resistant. Retailers focusing on contactless checkouts will need to be careful they do not to alienate those who still prefer cash or Chip and PIN.
And of course, the user experience must be as smooth as seamless as a typical web transaction – scenarios like the dreaded "unexpected item in the bagging area" must be consigned to history. This can be achieved relatively easily by using truly customer-centric design principles, and through smarter application of wireless technologies, like radio tags and Near Field Communication (NFC).
There are lots of examples of retailers doing innovative things in store – and it’s not just the big brands either. Independent toy shop The Entertainer, for instance, has sales assistant iPads in-store to deal with shop floor enquiries, improve its click and collect service, and provide better sales advice. You should keep an eye out for businesses doing similarly exciting things in this area and give them a try.
After a difficult time in the retail industry, brands are now kicking on to try and surprise and delight potential customers. While some of their initiatives may be in the experimental stages, taking the time to check them out will give you a glimpse into the future of retail and help stores to modernise the way we shop.
By Joe Ballard, director of business consulting, hybris and SAP Customer Engagement and Commerce