January 30, 2018 | Written by: Lindsay Herbert
Categorized: Cognitive Retail
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Self-checkouts are supposed to save customers time, but the dreaded warning message ‘unexpected item in the bagging area’ can quickly turn a shopping trip into an extreme test of patience. And for retailers, testing customers’ patience can mean lost revenue with a study by Omnico finding that the average time UK shoppers, for example, wait until they abandon their shopping cart is a measly 5 minutes 54 seconds.
Bottle of Coke with RFID tag.
Fortunately for shoppers and retailers alike, IBM has partnered with a series of specialist companies to develop a breakthrough invention for instant checkout and the connected store.
During a six-week field test at a Shell store and service station in the UK, roughly 140 consumers trialled the new instant checkout and most were delighted by its speed. It takes only five seconds for the instant checkout to complete a transaction for any number of items. When limited to only 10 items, the instant checkout still performed 15 times faster than a traditional self-checkout, and seven times faster than a cashier.
Consumers in the Shell trial were also impressed by the invention’s extra security. Its payment process utilizes an app and a patent pending bluetooth enabled reader. Unlike traditional card and NFC alternatives, this new reader does not collect nor send any customer or payment data. Instead, it sends a unique code to the customer’s app to be matched and routed via the cloud, enabling a secure and seamless transaction that can work with any smart device.
To use the instant checkout, shoppers download an app to their smart device and then once in-store, they can take their baskets or bags to a nearby instant checkout. Every item is automatically detected and appears instantly on the screen for them to verify. When they’re ready to pay, it’s a simple tap to the reader with the app on their smart device, and the receipt appears instantly. From beginning to end in five seconds flat, they’ve scanned and paid and are ready to head to the next shop.
The instant checkout capability is facilitated through breakthrough new ‘universal tags’ that employ RFID (Radio Frequency Identification) technology. Unlike RFID tags of the past, the small universal tags are discreet and can be attached to any product type regardless of material or composition. The RFID technology can even be embedded directly into product packaging and garment labels.
This eliminates the need for retailers to apply separate tags, allowing rich information from product manufacturers and retailers to be stored about each product via its unique ID number. Channelling data via the app means that retailers can glean insight not only into customer behavior for personalized marketing purposes, but also for real-time inventory monitoring for merchandising, creating a truly connected store.
This new system can also fundamentally transform a retailer’s value chain to be more streamlined and offerings more personalized. Customer data combined with external data feeds can reveal important insights into behaviors, and likely, shopping habits. With this insight, retailers can reduce waste, and better tailor their offers, merchandise, and communications.
Unlike other futurist concept stores where the goal is to eliminate the need for shop staff completely, the invention means that retail staff can spend their time engaging with customers and enhancing the in-store experience, rather than facilitating transactions and fixing self-checkout bedlam.
Retailers are aware the traditional store needs to exceed consumer expectations by combining digital and physical channels. With digital at the core of this experience, the first step is to give customers the fastest and easiest way to checkout.
This innovation is also set to transform operations beyond the transaction and into consumer behavior. With insight and visibility extending across the supply chain, retailers and consumers can combine efforts to reduce global waste and empower ethical consumerism.