Retail Connections: Contactless shopping

May 3, 2019

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Martin Newman

By Martin Newman

The Consumer Champion

I’m a big fan of retailers being forward-thinking and disruptive. The high street is a cut-throat environment now more than ever, and that’s doubly, triply true for the supermarket sector. Businesses need to think creatively, try out new things, and take risks. As I always say, if you’re 100% sure, you’re 100% late – but the retailer which experiments and gets it right can reap enormous benefits.

So I read with interest that Sainsbury’s are trialling a checkout-free supermarket at their Local branch on Holborn. The idea is simple, but novel: customers will mostly pay for their groceries through the Smartshop app that Sainsbury’s have launched, scanning items as they go and bagging them, then paying through GooglePay or ApplePay when they finish shopping, with a code confirming payment. The checkout area and bank of tills previously dominating the front of the store has been removed (though one helpdesk with a single cashier will remain for those who insist on paying the “old-fashioned” way).

The reason that the Holborn branch was selected for this trial – apart from the fact that it’s across the street from Sainsbury’s head office – is that 80% of sales at Holborn were already cashless, so on the face of it the company is simply going with the existing pattern of customer behaviour, perhaps giving shoppers a gentle nudge.

This kind of idea has been in the air for a little while. In January 2018, Amazon opened its first “shop and go” store in Seattle: cameras monitor shoppers’ acquisition and charge their purchases to a designated card when they leave the store. The rumours circulating are that Amazon will soon be seeking to open Go stores in the UK, and it’s often true in retailing these days that where Amazon goes, others follow. So we shouldn’t be surprised that Tesco, the Co-op and Waitrose have all launched or trialled apps allowing shoppers to pay via their mobile phones.

The intended benefits are pretty obvious. Sainsbury’s can radically cut the numbers of staff required to populate a key store, and, they hope, provide a much swifter and more convenient shopping experience for customers. Everything is about through-flow. At the Holborn branch, they have stopped the sales of alcohol and tobacco, since these entail time-consuming age verification – so you really can shop and go without interacting with another human being at all, and physical cash need never cross your hands.

That, obviously, is an issue which will need careful media handling. Customer convenience is all very well, and clearly gives retailers a competitive edge, but the bottom line, if we’re honest, is cutting costs by reducing the staff you need for each store and pushing shoppers through as quickly as possible in the greatest volume. That leads, inevitably, to overall job losses. The Independent suggested that 200,000 jobs could be lost overall in the sector, while the Office of National Statistics came in with a not-much-more modest estimate of 135,000 jobs. By anyone’s estimation, that is a serious shift in the retail labour market. The big supermarket firms will need to be deft and sensitive to present this as overwhelmingly a boon for consumers.

So, the basic question: is it? Is this a step forward? Well, on the face of it, the answer is a pretty resounding “yes”. Switching substantially to cashless stores in some locations offers greater speed and convenience. In the case of the Holborn store, Sainsbury’s are simply reacting to existing trends in customer behaviour: much less use of case, and an emphasis on “lunchtime” products at the expense of more recherché items like bottles of spirits. Basically shoppers will reduce their time spent in store, without, Sainsbury’s hope, reducing their spend.

In my view, we can give this a cautious welcome. It’s reactive and sympathetic to customer needs for the overwhelming majority of customers; for the die-hard Luddites, it might act as a nudge to get them on to the same page as other shoppers. It’s also gently disruptive, introducing a new way of interacting with a retailer into a very crowded and competitive field.

My words of caution are only these: keep a rigorous focus on customer response. If they don’t like it, don’t do it. And be sensitive to some of the messaging which is going to go along with this if it becomes a widespread development. And one other thing: make sure you don’t lose the personal touch. Human interaction is stil, a key part of the retail experience and people really value it. It can make a genuinely critical difference to people’s decisions about where to shop. Of course reducing overheads is important – we all need to cut our cloth these days – but there’s no substitute for a friendly face and expert advice.

But good luck to Sainsbury’s. In a few months or years, this could be how we’re all shopping.

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