October 24, 2021

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The Future of Checkout: How Retailers are Innovating the Payment Experience

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Chances are you’ve gone through a self-checkout line in a store at some point. You scan each of your items, bag them, and pay without the assistance of a cashier. A pretty straightforward concept, right?

As it turns out, self-checkout lines were just the first step in what has become a major technology-based revolution in the way shoppers pay in brick-and-mortar retail environments. But self-checkout is just one evolution in the payment process. There’s no shortage of new tech solutions working to make the retail checkout experience as painless as possible.

It’s no wonder retailers are attempting to innovate the retail checkout process—customers consistently report that making a purchase is the most painful part of the shopping experience.

Although 61% of shoppers would rather shop with brands that also have a physical location over brands that are online only, more than 70% of surveyed consumers said the checkout experience is their biggest pain point.

Long lines and lengthy wait times at checkout are major reasons that some customers have turned to online shopping.

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But some brands are taking a crack at making the in-store checkout process less painful. From self-checkout kiosks to mobile point-of-sale systems to getting rid of checkout altogether, these retailers are hustling to keep customers happy and encourage more sales in-store.

Why is it so important to get the retail checkout process right? 

Aside from being the biggest pain point while shopping in-store, the retail checkout experience is also the last touchpoint a shopper has with your retail store before they leave. 

Giving customers a great last impression is crucial to gaining loyal customers who come back again and again. 

Providing more checkout options can boost customer satisfaction and reduce wait time. In turn, you’ll complete more checkouts, make more sales, and increase customer lifetime value (CLV). CLV is the total amount of money a shopper spends with you during their entire lifetime as a customer. 

Happy customers lead to higher CLV, and this is important because, generally, 80% of your business comes from 20% of your customers

What do customers look for in the retail check out process today? 

Depending on the size of the retail business and its target audience, the retail checkout processes can look different. But convenience, safety, and technology are all essential to any retail checkout experience. 

Innovative technology 

We’re all familiar with Apple’s mobile checkout strategy. You might wait for a member of the sales staff to become available and assist you, but you never have to wait in line to pay. Each store associate is equipped with a mobile checkout device so you can check out with the same person who helped you. 

As a technology company, you’d expect Apple to have an advanced retail checkout experience. Smaller retailers or boutiques might not have the same capabilities, but there are still many ways to innovate the checkout experience. We’ll tell you more about these later in this article. 

Health and safety 

During the pandemic, I’ve seen many brick-and-mortar retail establishments implement QR codes as a way to offer contactless payments. QR codes are displayed in store windows to encourage customers to shop online first and then click and collect. Click and collect lets customers buy online and then collect their order in-store, similar to buy now, pay later (BNPL). 

Advancements in credit card reader technology allow most retailers (big or small) to accept contactless payments. This form of payment is safer and reduces checkout time. Customers simply wave or tap their card over a magstripe or contactless card reader, and they’re done. 

Self-checkout requires less interaction between sales staff and customers. These days, you see this form of checkout in most grocery stores, and also big stores like Target and Walmart.

Speed and convenience

The ultimate level of speed and convenience is eliminating the checkout process entirely. For those who don’t find biometrics creepy, Amazon Go is the perfect example of this. Once you’ve created an account in the Amazon Go app, it’s linked to your Amazon account for billing. 

All you have to do is enter one of the Amazon Go stores, take the products you want, and walk out. The technology used can detect what products are taken from and returned to the shelf and adds them to your virtual shopping cart.

Adapting your retail checkout to changes in consumer behavior

While some of the most tech-heavy options might not be right for every merchant, there are simple ways retailers can incorporate tech solutions and join the revolution to kill the checkout line. Implementing contactless payments, going paperless, and floating POS systems are great starting points for any business.

Retail apps 

Fifty-one per cent of smartphone users are more likely to use a company’s or brand’s mobile app when browsing or shopping on a smartphone because they can get rewards or points.

While creating a custom retail app might be too large an investment for smaller retailers, large chains like Starbucks and Walmart are using them to major success. These apps combine features of in-store navigation (where applicable), ease of purchase, a decrease in waiting times, and customer loyalty rewards all in one app.

Walmart’s mobile scan & go lets customers ring in items via the company’s app while they shop in-store. So by the time they’re done putting everything in their cart, all they have to do is press Pay and head home with their merchandise.

Self-checkout kiosks 

In February 2020, PYMNTS reported that consumers prefer unattended retail channels because they like shopping at their own pace—49.4% use self-checkout because it’s faster, and 34.7% prefer the shorter lines. 

Restaurants have their own technology that cuts down on customer wait times. Fast food vendors like McDonald’s give customers the option of ordering the old-fashioned way or through large self-serve touch screen kiosks located near their traditional checkout lines.

But smaller restaurants that don’t have the capacity to install their own touch screen system can still find ways to integrate customer-controlled tech into their ordering process. Services like MenuPad offer restaurants a way to streamline their ordering and payment process without taking away the human touch that diners have come to expect. Staff is still there to greet customers, answer questions, and bring food out from the kitchen, but tablets at each table allow customers to enter their orders and payments themselves.

Restaurants that cater to the corporate lunchtime and takeout crowds can also make use of services like Ritual, which allow customers to order from the office and come by to grab their lunch once it’s ready. When employees are crunched for time on their lunch breaks, anything that cuts down on wait times is going to give a lunch spot an edge over its competitors. After all, lunch breaks are finite, and the quicker customers can start eating their meal, the happier they’ll be.

Apps like Ritual move the customer-facing checkout process to the third-party app—which can be faster for both retailers and customers alike, especially during lunch and dinner rushes.

Mobile checkout

With the proliferation of mobile-based point-of-sale systems like Shopify POS, it’s now possible to arm every retail employee with the power to check out customers anywhere in your store. Mobile software can transform smartphones and tablets into a POS, which means there’s no need for a stationary checkout area.

Not only does this system disperse lineups by stationing mobile POS systems throughout your store, it also helps employees offer a more informed customer experience. With information about product specs and current stock at their fingertips, employees are better equipped to answer any customer questions at checkout time. And without the added burden of a long line of impatient customers, staff can take the time to thoughtfully talk customers through their purchases.

Apple is perhaps the company best known for using this approach. Staff are equipped with an iPad and check on orders for customers, book them appointments at the Genius Bar, view the status of items under repair, and take payment for purchases. They can also bring up each customer’s entire purchase history.

So, instead of the customer waiting in multiple lines around the store or seeking out different staff to find an item or check on their appointment status, the dispersed POS approach allows one staff member to take customers through their entire retail journey. As a happy side effect, they’re also avoiding the frantic energy associated with long lineups concentrated in one area of the store.

Email carts 

The Shopify POS Email cart is a great way to merge online and offline shopping. Use it to create a cart and send it to your in-store customer to complete checkout online. This way, they don’t have to wait in line to complete their purchase. 

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The customer will receive a receipt via email and the completed order will appear on your Orders page in Shopify. 

Showrooming model

Another trend that’s merging the brick-and-mortar experience with the convenience of online shopping is “showrooming” (also known as low or no inventory stores). Essentially, customers come to a store to check out merchandise and get a feel for it offline, then place an order for it online.

While this is a trend that’s worried some physical retailers, showrooming can benefit both customers and brands. It’s the perfect blend of the online and offline shopping worlds.

Warby Parker is a great example of a major brand that brought its online product into the offline world with a showroom model. While the brand began selling glasses entirely online, eventually it made sense to open brick-and-mortar locations in selected cities to offer customers the chance to try on frames in person. At these retail locations, customers touch, feel, and try on frames, then order their glasses through Warby Parker’s website, with either the assistance of a staff member or on their own.

This showrooming model helps retailers that can’t afford to rent out a huge space to accommodate a full store’s worth of inventory. This way, they can show off their goods in a small space, take full advantage of foot traffic, and still garner the sales benefits of a full-sized brick-and-mortar retail operation. And showrooming allows customers to have an immersive shopping experience and have products shipped straight to their doorstep.

Buy online, pick up in-store (BOPIS)

Buy online, pick up in-store (BOPIS) is an omnichannel retail strategy that’s gained momentum during the pandemic, but it’s here to stay. Also referred to as click and collect or curbside pickup, BOPIS lets customers pay online and pick up their order in-store or at a designated pickup point.

BOPIS has many benefits, including increased store traffic and sales and improved inventory management. Customers enjoy not paying for shipping plus speedy service. An order that they’d usually have to wait three days for is ready for pickup in a few hours or less. 

Alternative payment methods 

Credit cards and cash are no longer the go-to payment methods for most shoppers. In fact, credit cards will fall to second place in 2022 (27%), after digital wallets (33%). 

Alternative payment methods include any form of payment that’s not cash or a credit card from a major bank. A few examples of alternative payment methods include digital wallets like Apple Pay,Google Pay, and Amazon Pay.

Accepting many forms of payment, including alternative payment methods, can help reduce lines and speed up the retail checkout process.

Improve customer experience by accommodating more payment options. 

Contactless payments

Tap-and-pay technology lets retailers accept contactless payments in-store. These types of payments are faster than pin and chip transactions and are a popular payment choice for in-store shoppers. 

FUTURE OF RETAIL IN 2021: The future of retail is contactless—and we have statistics to prove it. 62% of buyers prefer making in-store purchases with digital or contactless payments. Get more data in Shopify’s Future of Retail in 2021 report!

QR codes 

The use of QR codes makes the retail checkout disappear completely.

With QR codes, mobile shopping is even easier. Shoppers can use their smartphone to scan a code and complete their purchase online via their mobile devices. Shopcodes (Shopify’s QR code app) lets you generate QR codes within your Shopify store.

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Use Shopcodes in the following ways: 

  • Add them to your product packaging.
  • Post them in your retail store or at events and pop-ups.
  • Include them in package inserts.

Do I even need to improve my checkout experience?

Customers looking for the checkout counter are close to the end of the buying journey and are ready to pay you. But when they see a long line they may put the products down and leave. These types of barriers result in lost sales and dips in sales revenue. 

Set benchmarks you can review at the end of each day or week to determine whether your checkout process needs improvement. 

For example, during peak times, how many customers completed checkout in an hour? Set a goal, and if you’re able to reach that goal, you may not need to improve your checkout. 

Look at what other retailers are doing. We don’t expect you to compete with major retailers if you’re a small boutique. But no matter the size of your business, there’s technology you can use to speed up your checkout process. 

A few signs that you need to improve your retail checkout experience could be: 

  • Customers dropping merchandise and leaving once they see the line
  • A decline in sales revenue 
  • Customer complaints
  • Average basket size decreases (people want to pay as quickly as possible, so they buy less) 

How to speed up your checkout experience

The main objective of improving your retail checkout experience is to provide a faster, more convenient, more enjoyable experience. 

Here are a few tips to help reduce customer wait time and keep shoppers coming back for more:

Determine staff schedules based on traffic peaks

Over-staffing can impact your profits, and understaffing can leave you with dissatisfied customers.

Keep track of when your store is busiest and make sure more staff are on the sales floor during those times. This way the ratio of customers to staff reduces waiting time and speeds up the checkout process.

This can also help you with budgeting for staff, as you’ll know when fewer sales associates are needed.

Offer more flexibility during peak times 

Reduce checkout bottlenecks by opening more checkouts during peak business hours. If you have a mobile checkout system, make sure you have enough devices to enable more sales staff to process payments on the go. 

Embrace new checkout technology

Being open to new retail checkout technology will help you stay competitive and delight customers. If most retailers are offering mobile checkouts, contactless payments, or BOPIS options and your customers still have to queue, you run the risk of losing a handful of customers to your competition. 

Make the checkout process as frictionless as possible 

The more you speed up the checkout process the less time customers will have to reconsider their purchase or get distracted. Don’t lose sales by making the checkout process complicated. The fewer steps a shopper takes, the more likely they are to convert to paying customers. 

Train and motivate sales people 

Involve your sales staff in your strategy to improve the checkout experience at your retail store. 

You can gamify the process and set goals for the number of checkouts to be completed during a set period of time.

For example, if you know your store is busiest from 6 pm to 8 pm on Thursday night, and the checkout process has slowed, set a goal of 25 checkouts per hour. If a sales associate reaches the goal, reward them with a commission on sales made during that hour. 

Delight customers with these retail checkout counter tips

If you’re not able to implement mobile checkout or self-checkout kiosks, that’s OK. There are many ways to improve customer experience at your checkout counter.

Here are a few retail checkout counter ideas to consider:

Pick the right location

Choose the ideal location for your checkout counter. Is it dark and dingy or bright and welcoming?

Does it obstruct the traffic flow while customers are browsing products in your store? Make sure it’s easy to find, but not the main focal point of your retail store. 

Have fun with the design 

If customers have to wait in line, they’re more likely to stick it out if there’s something nice to look at. This is an opportunity to make a memorable (and shareable) statement with word art, inspiring messages, plants, or other decorative items. 

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Spending time on your checkout counter design can help you: 

  • Make customers feel more connected to your brand 
  • Emphasize what makes your products unique
  • Show off your brand identity
  • Upgrade the appearance of your checkout space 

Boost the look and feel of your checkout counter and maybe a customer in the queue will even take a picture and post it on Instagram. 

Add decorative lighting

Invest in lighting that’s decorative and functional. Eye-catching fixtures above or near your checkout counter can bring attention to it while also complementing your in-store design. 

Spark ideas and impulse buys 

The checkout counter is a great place to encourage customers to increase their basket size with impulse purchases. This survey confirms that 79% of respondents made most of their impulse purchases in-store, while only 6% made spontaneous buys on a smartphone or tablet.

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A customer who’s made it to the checkout counter is ready to buy. The following merchandise makes for great impulse purchases: 

  • Accessories that add to the main purchase
  • Gift cards
  • Travel-size products 
  • Seasonal items
  • Chapstick or hand lotion
  • Socks
  • Hair accessories 

It’s key to make sure the impulse items are on brand. For example, if you sell shoes, place socks, laces, and shoe cleaner at the checkout counter. 

Increase sales by dedicating space at your checkout counter for items shoppers can quickly grab on their way out.

Highlight your brand story 

Your checkout space is a great place to share more information about your business and your story. Hang a poster or use word stickers to explain your mission, values, and unique selling point. If you have press mentions or awards, the wall behind or next to your checkout counter is the perfect place to display them. 

Letting customers know what you stand for makes them feel connected to your business and makes the in-store experience more memorable. 

Prioritize health and safety 

We’re hopeful that vaccines will let us return to some level of normalcy soon. But keeping your staff and customers safe from COVID-19 continues to be a major priority. 

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Depending on your retail store, the health and safety measures you take at your checkout counter could include: 

  • Placing hand sanitizer on the counter for customers to use
  • Leaving hand sanitizer behind the counter for staff to use 
  • Hanging Plexiglas to create a physical barrier between your staff and customers 
  • Cleaning the counter and credit card reader regularly
  • Putting a sign up to remind customers to adhere to social distancing rules 

Boost the appearance of your checkout counter with an advanced POS system 

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Without a point-of-sale system (POS), you won’t be able to process payments at checkout. Your POS is a crucial element of the retail checkout experience, and not only for speed. The appearance of your POS can also enhance the checkout counter. 

Using an advanced POS system that works on a computer, tablet, or smartphone not only looks better and saves space, it functions better, so you can speed up the checkout process. 

Use Shopify POS and hardware to unify your online and offline business. 

Join the future of retail by improving your checkout process

The key to a great retail checkout is convenience, speed, and an overall positive and memorable experience for customers. But it’s impossible to test all these techniques at once. Try a few, gauge customer reactions, study the results, and then improve as you go. 

Use technology to adapt to consumer behavior and improve the checkout experience so your customers stay happy and return to buy more. 

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