Rethinking In-Store Tech: Innovations in Retail Payments as Shoppers Return

Amidst the return of shoppers to physical stores, retailers are reassessing their in-store technological strategies, pivoting from an e-commerce focus during the pandemic to enhancing the seamless payment experience in brick-and-mortar locations.

Chief Information Officers (CIOs) in the retail sector are deliberating over technological advancements aimed at simplifying the in-store payment procedures, redirecting attention to an aspect that has historically lagged.

Throughout the pandemic, retailers heavily invested in e-commerce, uncertain about the future of foot traffic in physical stores. Now, two years later, as shoppers gradually return, e-commerce constitutes 16.4% of all retail shopping, a slight decrease from its pandemic peak of 18.8%, as reported by the National Retail Federation.

CIOs underscore the risk of losing clientele due to outdated in-store technology, although the cost remains a significant hurdle to implementing these innovations.

Neil Holden, CIO of Halfords Group PLC, a British retailer, emphasizes the need for modernization, highlighting that failure to adapt could alienate customers.

Companies like Kroger Co., Nordstrom Inc., and Halfords are exploring novel technologies to enhance the payment experience, aiming to replicate the seamless nature of online shopping within physical stores.

For instance, Halfords is exploring a technology that enables payments via sound waves, a concept previously utilized in military contexts. Kroger is testing smart shopping carts equipped with cameras and sensors to automate the checkout process, while also considering aisle-based checkouts for swift transactions.

Yael Cosset, Senior Vice President and CIO at Kroger, envisions a frictionless shopping experience, responding to customer preferences for convenience.

Nordstrom’s Dennis Bauer eyes mobile phone-based payment technologies as a potential game-changer, contemplating a shift from traditional payment terminals.

Nikki Baird, Vice President of Strategy at Aptos, suggests that advancements like near-field communication chips in smartphones could revolutionize payment methods, offering greater flexibility and reducing hardware expenses for retailers.

However, despite the promise of these innovations, CIOs highlight cost considerations as a significant impediment, particularly for large-scale implementations across numerous stores.

Mr. Cosset of Kroger acknowledges the importance of aligning investments with consumer preferences, citing privacy concerns and the impracticality of cashierless stores due to high costs and technological complexities.