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Retail’s ‘frictionless future’

In the perfect retail experience of the near future, less will indeed be more. 

Less barriers. Less steps. Less queues.

Because the more pain points that can be removed in a shopping trip, the more likely it is that a purchase will be made. And the easier and more pleasurable a transaction is, the more a customer will favour a particular store and/or payment system.

That’s why retailers, financial services players, and tech companies are all racing to embrace a frictionless future. It’s the new gold rush in retail, and over the next two years we will see a tectonic shift in how we all transact. Cash desks and checkouts will disappear, smartphones will become wallets and self-scanners, and queues will be a thing of the past.

Of course, like all megatrends, this has been coming for some time. In 2005, Apple introduced a mobile POS payment system into each of their retail stores across the US, which allowed floor staff to operate as roving checkouts. (Fascinatingly, it was based on Windows technology, a decision that must have grated at the time, but Apple proceeded anyway, because it was in the customer’s best interest.)

Meanwhile, UK supermarket chain Waitrose launched QuickCheck scanners in 2004 so that customers could scan groceries as they put them in their trolleys to radically speed up the checkout process.

And Woolworths introduced self-checkout technology into 70 supermarkets in June 2008, after an initial trial by BIG W, back in 2003.

Google Wallet Terminal

Now the technology tipping point has been reached, and change is coming fast. On the Westfield World Retail Study Tour in May this year, I saw many examples of frictionless retail. In the US, latte lovers were paying for their coffees with the Starbucks Mobile App for iPhone. Hardware shoppers were checking out of Home Depot via PayPal. Drug store patrons were whizzing through the checkout at Walgreens using Google Wallet. And in France, Carrefour supermarket shoppers were delightedly scanning as they shopped.

Scan as you go at Carrefours Paris

And this is just the beginning. An innovative US tech company called Square has rolled out a system that allows customers in participating retailers to pay by voice. Just say the word, literally, and your payment is processed. (Square’s trademark, by the way, is a little plastic square that plugs into an iPhone or iPad jack, instantly turning the device into a POS system. My 14-year-old daughter could accept credit card payments on her mobile for baby-sitting.)

Pay Pal at Home Depot

In another glimpse of what’s to come, US department store JC Penney has just announced it is planning to eliminate all checkouts from its 1100 stores by 2014.

Online, as well as offline, the move is on to reduce friction. And just as in the bricks-and-mortar world, to quote William Gibson, “the future is already here… it’s just unevenly distributed”. In fact way back in 1997, Amazon filed a patent application for 1-Click, which lets registered customers buy with just a single click of the mouse. E-tailers everywhere are working to emulate Amazon and take steps out of the checkout stage.

I’m old enough to remember large metal cash registers that went “ka-ching” and credit cards that had to be manually processed with carbon copy slips. I also recall complex online checkout screens where the connection dropped out at the last minute. But these memories are fading fast. The future is frictionless.

Jon Bird is CEO of specialist retail marketing agency IdeaWorks , and Chairman of Octomedia, publisher of Inside Retail. Email . Blog Twitter: @thetweetailer

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