Mobile in Retail and Dining: An Enhanced Purchasing Process

Let’s get this out on the table: your physical wallet isn’t turning fully digital anytime soon. The idea that mobile will supplant your card at the Shell station, cash on the train and check to your babysitter by next month is not practical. The reality is that we’re not very far along in the evolution of mobile pay (mPay) and, as of now, paying utility bills from our phones is about all that we can hang our hats on. It’s time to identify opportunities that pair mobile payments with other activities at the point-of-sale.

The answer lies in Starbucks’ pioneering of proximity payments, which are known to the gurus as payments that take place at the physical point-of-sale (as opposed to the purchase of a jacket from the Amazon app on your smartphone). With their service-oriented buying experience, retail and dining are two attractive industries to pilot mobile solutions. As you may have guessed, half of mobile’s value in this space isn’t even directly related to payments, but rather the customer’s interaction with the merchant.

We may not openly complain about the sluggish search and checkout process at retailers but the opportunity to make it better is certainly there. Nothing is more aggravating than the individual at the cash register searching for the right change or card to make a purchase – or, digging through his wallet for the correct receipt to return a good. Likewise, the time spent waiting on your server to grab the check or run your card at a local pub can be frustrating if you’re in a hurry. Customers with tight schedules are sure to give their loyalty to businesses that are known for efficiently cycling guests through checkout. (Jimmy John’s knows that many of its customers are willing to forego a toasted sandwich in exchange for prompt food preparation.)

And while there is surely potential for a speedier checkout, the most compelling use case for mobile at the physical point-of-sale revolves around simplicity and adding convenience to the consumer’s shopping experience. By leveraging a mobile wallet, all cards and coupons are in one place, eliminating the need to search for the right ones at checkout. This all-in-one feature comes into play shortly after making the back-to-school shopping run at Target that is sure to result in the return of multiple goods. With a smartphone in hand, paying at the register is as simple as a tap and returning a good just means pulling up the appropriate digital receipt from your phone.

starbucks-mobile-payIn the situation of needing in-store assistance at a large discount outlet like Wal-Mart, the tap of a button can be used to flag down a nearby store associate or display a map of the store. With these on-spot capabilities, searching for your mother’s special brand of skin lotion could take less than three minutes, versus the usual 10. Of course, it would be nice if the time saved searching for your good wasn’t rendered useless by having to stand in the checkout line for 20 minutes. A slightly faster checkout time for each incremental shopper can dramatically reduce the cycle time for a long line at some retailers. While the tap or scan of a smartphone may not ultimately save you time versus a credit card swipe when waiting on your clothes to be folded at Nordstrom’s, it’s certainly a time-saver when checking out at pay-and-go outlets like CVS.

The distaste for long lines and tedious payment procedures is shared equally amongst customers and retailers. Waiting in line can be avoided entirely by placing orders with a smartphone in the store (prior to checkout) or even before arrival. With especially high volume of guests during peak meal hours, the dining industry (and fast food in particular) is one that could take advantage of a pre-ordering feature in smartphones. In this day and age, high-quality service is a minimum expectation at restaurants, with diners especially sensitive to poor turnaround time on food preparation. Sandwich shops known for oven-toasted subs are sure to take advantage of opportunities where customers give notice of their order before arrival.

ChowNow-Mobile-Ordering-FormPre-ordering seems like an obvious solution to delays at checkout but the feature is a double-edged sword for some merchants. Many retailers would prefer for its guests to browse the aisles of their store in hope of other products catching their eyes. In these cases, it would be ideal for retailers to have the option of disabling a pre-ordering feature or limit it to in-store use. However, it’s important to note that a good portion of those who utilize pre-ordering are the same customers that are exceptionally bothered by long lines and chatty salespeople, reducing the value in promotional displays and cross-selling attempts.

Pre-ordering is actually a seasoned business offering today but typically only in the form of carry-out at restaurants, which isn’t regularly burdened by long lines. Rolling out the functionality to select outlets like pharmacies and other discount shops could change in-store marketing strategies. During a 30-minute lunch break, a physician might use his mobile wallet to ensure that his sandwich is toasted prior to his arrival at Subway; he then may pre-order a bouquet for his wife at a flower shop for immediate pickup, all before returning to the office in time for a 1:00 meeting. In this situation, every party involved wins and it’s all made possible by a smartphone.

With many elements to the purchasing process at a retailer or restaurant, payments are just a layer of the total value that a smartphone can deliver at the physical point-of-sale. If it receives adequate buy-in from consumers and merchants alike, mobile has the potential to redesign checkout procedures, in-store customer service, and in the case of restaurants, order placement. After seeing the success that Starbucks has had employing mobile in its stores, the concept should be a no-brainer for similar retail and dining establishments.

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