How is Amazon Go shaping the future of payments?
Amazon Go has captured the imagination of retailers and consumers alike; businesses are being challenged to reimagine the shopping experience as something that was unthinkable a decade ago.
With the recent launch in January, Amazon Go has captured the imagination of retailers and consumers alike. Businesses are being challenged to reimagine the shopping experience and allow for behaviors that were almost unthinkable 10 years ago. What could the future of shopping look like? Does the consumer-controlled checkout Amazon Go offers hold potential, or is it a temporary trend for something hotter to come along?
Checkout-free shopping has strong, disruptive implications on retailers. It’s no secret that consumers have gravitated towards convenience when it comes to making purchases in-store or online. By removing all unnecessary steps, Amazon Go has made it faster and more convenient to just pick up an item and go, no physical payment required. The lack of friction is the future of the customer experience, including the payment process.
Is the convenience of Amazon Go the catalyst that changes the retail customer experience and consumers’ payment preferences as we know them?
We’ve certainly come a long way, but shows that consumers may not be ready for a complete overhaul of an established shopping experience just yet. Our Lost in Transaction report demonstrates 59 percent of US consumers use their mobile phone to shop around for better deals elsewhere while they’re in a store, but that 94 percent of Americans prefer to buy their groceries in person and 63 percent say that they worry about how secure contactless payments.
The data from our latest research report demonstrates that a fundamental shift to a cashier-less checkout won’t happen overnight. Retailers will need to look at Amazon Go as a long-term industry evolution rather than short-term consumer trend. As only five percent of consumers who purchase their groceries in store prefer to pay for them using contactless payments, and 32 percent still prefer to pay with cash, retailers will need to adapt to customer expectations, both traditional and emerging checkout preferences.
It's no question that sensor technology, which requires no scanning, is the future of checkout. Scanning is time consuming and annoying, creates the conditions for checkout queues and is one of the least enjoyable parts of in-store shopping. This new business model has made it so that there is no longer the need to queue, reducing drop out and increasing margins. But the jury is still out on whether the Amazon Go model is the answer.
While retailers may not be willing to invest in an unproven checkout model, or able to change course and offer their customers a checkout-free experience in the immediate future, savvy merchants will need to evolve alongside this innovation by continuing to streamline the checkout process and enabling customers to easily pay in the ways that suit them best – whether it’s with physical currencies, debit cards or contactless payments.
Is there a sweet spot between cash and alternative payment methods in an industry that constantly evolves?
The answer for retailers is clear. It is important for them to find ways to implement new technology to meet consumers’ growing needs for frictionless in-store experiences, or else they risk getting left behind.