How the U.K.'s Marks & Spencer is refining cashierless checkout

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Marks & Spencer is the first major U.K. retailer to launch a mobile scanning and payment app in its stores. Several U.K. supermarket chains have launched pilots of cashierless and checkout-free mobile shopping, but have yet to roll out services.

Unlike those retailers — Sainsbury’s, Tesco and the Co-op — M&S isn’t a supermarket chain, although it sells prepared food and meals along with products such as clothes and furniture.

Designed with busy London customers in mind, particularly during the lunch-hour, the M&S Mobile, Pay, Go checkout-free mobile shopping app allows customers to purchase lunch (sandwich, crisps and a drink) in under 40 seconds for purchases up to the value of £30.

“With its packaged food, M&S is a really good place to adopt mobile scan, pay and go,” said Thad Peterson, a senior analyst with Aite Group. “(Sandwich shop chain) Pret a Manger would also be a good place for this app.”

M&S has introduced its app in two London stores, M&S Edgware Road and Waterside Simply Food, which is situated at its London corporate headquarters. The app enables customers to scan products on their smartphone as they go, and check out with Apple Pay or the card saved in their M&S.com e-shopping account. They earn rewards from Marks & Spencer’s Sparks loyalty program when using the app.

In August, Sainsbury’s launched a trial of cashierless mobile shopping in one of its busy London stores. Tesco and the Co-op are also piloting checkout-free mobile scanning and payments.

Lessons from the pilot
M&S will roll out the app at a further four London stores in the weeks running up to Christmas, said M&S spokeswoman Sophie Kaitcer.

M&S will collect customer feedback and adapt Mobile, Pay, Go before rolling out to more stores early next year. “It’s too early to confirm if we’ll roll out the app to all our U.K. stores,” Kaitcer said.

Prior to the commercial launch, M&S ran a trial of Mobile, Pay, Go at the Waterside Simply Food store, which opened its doors in June 2018. “Waterside Simply Food now sees 20 percent of its sales from Mobile, Pay, Go, with an average of 170 items being purchased through the app every hour,” Kaitcer said.

Lauren Stratton, foods manager at Waterside Simply Foods, wrote in an August blog post that 60 percent of mobile payment transactions in the store take place between 12 pm and 2 pm. “We’ve seen a lot of customers wanting to scan after they’ve collected all their products rather than as they go, so we’ve installed a packing bench,” Stratton wrote.

Between June and the end of September, over 1,500 people used Mobile, Pay, Go at the Waterside store, with a third of active users making five or more transactions a week.

M&S offers two other self-service options: its M&S.com e-commerce site, which is available both for PCs and mobile devices; and self-scanning and payment terminals. The retailer is looking to expand its online presence, and has a five-year ambition for 33 percent of its clothing and home sales to be online.

“Technology is speeding up the whole process of shopping,” said U.K. retail analyst Richard Hyman. “Mobile scanning and payments offer material benefits for both customers and retailers. Lunchtimes are peak, and if customers’ time in store can be cut, that will be an attraction. For retailers, mobile shopping’s potential to cut labor costs from transactions is a huge benefit.”

However, the competitive advantage in technology is generally short-lived, said Hyman.

“Technology can easily be copied and there are costs involved in being a pioneer,” he said. “So, while there might be a short-term benefit to M&S here, most technology advances soon turn into zero sum games.”

Aite Group’s Peterson said that the huge success of contactless card payments in the U.K. may diminish the appeal of the mobile scan, pay and go model.

“But, having said that, anything that helps you avoid standing in line in London stores at lunch time is beneficial,” he said. “The challenge is that you have to download the M&S app to your phone and then have the app open to make it work. So which has more friction? Using a contactless card and standing in line at checkout, or opening the app and scanning your purchases?”

Peterson argued that the only way mobile scanning works is if only a very limited inventory is available, and customers are willing to trade time spent doing their own scanning for the convenience of getting in and out in a hurry.

“The problem is that contactless cards are very convenient and don’t require any major customer behavior changes,” he said. “In the U.S., there have been experiments with mobile scan, pay and go, but these haven’t been very successful. This is because having to do their own scanning means customers are doing the clerk’s work and don’t see an improvement in perceived convenience.”

What do customers want?
U.K. retail consultancy IGD’s ShopperVista survey of 1,934 British grocery shoppers in March 2018 found a high usage of mainstream technology in-store. According to IGD, 57 percent of British shoppers surveyed had used a self-service till when grocery shopping in the past month. Also, 52 percent had used contactless cards to pay for their groceries at some point in the past month.

When asked about their current level of usage of newer in-store technology, 16 percent of British grocery shoppers surveyed said they had used their smartphone in the last month to redeem coupons on their phone. Also, 12 percent said they had used scan and go, while 7 percent claimed to have used their phone to pay for their groceries and 7 percent to have used a digital loyalty card in the last month.

Around 85 percent of U.K. shoppers are open to using some type of technology to help them with their food and grocery shopping, according to IGD’s December 2017 ShopperVista survey of 1,721 British shoppers . The most popular reasons for using in-store technology are to speed up the checkout process (40 percent), find out about offers (39 percent), locate products in-store (37 percent) and compare prices with other stores (33 percent).

IGD’s December 2017 survey found that 59 percent of U.K. shoppers enjoy food and grocery shopping, and 37 percent dislike it. Technology needs to play a role in supporting shoppers in both these camps.

“Retailers should think about how technology can create a more engaging shopping experience for shoppers who like shopping and are happy to browse more in shops,” said Vanessa Henry, shopper insight manager at IGD. “This could be through introducing touchscreens in-store that have more product information. For shoppers who don’t enjoy the shopping experience, technologies that would probably appeal are those speeding up the shopping process and making it more efficient."

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