How mobile threatens self-checkout lanes

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Not long ago, self-checkout lanes were seen as an encroachment on traditional retail sales, depriving shoppers of the personal touch that comes with interacting with a cashier. Today, this model is under attack from mobile devices, which are both more high-tech and more personal.

The personal touch comes from customization, and from the consumer setting the terms by which it interacts with the retailers.

"Today’s consumer wants a convenient, frictionless experience, to be able to do business on their terms. Digital, or the digitization of the restaurant experience is at the broadest level what is going on," said Don Zimmerman, vice president of hospitality solutions at NCR, in an email interview.

Perhaps the most striking example is Starbucks, which recently reported that nearly a third of its transactions used its mobile app and one in ten orders were coming from mobile phones outside the store. Though Starbucks' environment may not be easily replicated by other stores, its mobile app's success seems to be in sharp contrast to the company's culture of having patrons interact with baristas on a first-name basis.

"It's a growth area and there are varying mobile payment types that are advancing, one being mobile and pay ahead," said Raymond Pucci, associate director of research services at Mercator Advisory Group. "And you can add to that list mobile self-checkout."

Amazon and Starbucks are among the companies that have made the most inroads in this migration. Amazon is testing models that remove staff interaction entirely from stores. Sam's Club has a similar expedited checkout that de-emphasizes cashiers in favor of mobile technology. "Sam's Club's tech isn't as advanced as Amazon," Pucci said. "You still have to do checkout by a monitor but there is no checkout line."

The trend is spreading across retail markets, particularly in other parts of food services. NCR recently integrated its technology with Grubhub Hub, allowing the restaurant takeout marketplace to eliminate navigation, devices and channels to smooth out mobile ordering and payments.

The integration is designed for any restaurant or food service provider, including a single site restaurateur that may have a moped outside for deliveries, Zimmerman said.

NCR provides an omnichannel platform APIs that facilitate the integration with NRC's Aloha POS system. Marketplace aggregators such as Grubhub create the connection between their platforms and those APIs.

This eliminates the collection of tablets and printers that today deliver the orders to the restaurant, and the manual step of entering those orders into the POS and kitchen product systems, Zimmerman said.

"It is touching every aspect of how a consumer interacts with their favorite restaurants," Zimmerman said.

The growth of mobile is playing a significant role in getting more customers to pre-order food and drinks, according to Grubhub. The company reports 60% of Grubhub orders are placed via mobile apps.

To respond, Grubhub introduced additional features to expand the service. Patrons can order up to 20 hours in advance, and to change their order up until the time they receive their order confirmation on the day of delivery.

NRC also recently integrated Aloha with DoorDash, a platform that restaurants use to power on-demand delivery business. DoorDash's delivery platform will appear directly in the restaurant's point of sale when a customer places a delivery order.

DoorDash reports about two thirds of its orders come from a mobile device.

"The biggest change ushered in by mobile is the ability to tap into a pool of people who are available to perform the deliveries themselves, and connect them with an opportunity immediately," said Toby Espinosa, head of national partnerships at DoorDash, in an email interview. "This on-demand model for deliveries is more efficient, more cost-effective and is only possible thanks to the power of mobile."

Food service is one of the major categories that are benefitting the most from the migration toward a mobile technology-based mix of ordering, marketing, customer service and payments, Pucci said, noting the other categories are ride hailing apps, groceries and rental services like Airbnb.

"The on-demand service economy is contributing to millions of transactions, and as with mobile order and pay, these are people that would still be taking cabs and ordering meals, but there is an experience improvement," Pucci said.

The appeal is more than just the immediacy for these businesses, Pucci said. "When they tie in the payment, the loyalty, the marketing offers…this engages people; it's almost like a game."

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