As the benefits of electronic point of sale (EPoS) are more widely recognised by retailers, in turn system developers are increasingly looking to push the boundaries. Supporting technology is becoming highly flexible and driving EPoS forward at such a pace that the definition itself is changing in the retail environment.

According to Retail Week’s Innovation Review 2013 there are twenty key technologies sweeping across the retail space at present such as augmented reality, cloud-based communications, facial recognition and queue management systems. Following this, we have focussed on the payment based solutions within that are expected to be most advantageous to retailers – bluetooth beacons, data services, digital wallet, finger printing, rapid scan systems and mobile loyalty schemes.

Bluetooth beacons

This technology works by targeting designated zones within a store with customer specific information in order to improve consumer reach without staff assistance. One store may have several beacons operating at one time, each relaying different content or offers within a given zone. Mobile devices, such as a smart phone or tablet, pick up the information stream that may be generic to all shoppers based on products within the zone. Alternatively, it may be customised to an individual based on their shopping history or how long they’ve been in one place suggesting they need some assistance.

The Bluetooth beacon is transforming how retailers communicate with shoppers. It is an alternative to near-field communications and backed by the likes of Apple and PayPal.

Apple’s iBeacon, for example, is an indoor positioning system that Apple Inc. calls a new class of low-powered, low-cost transmitters, known as Low Energy Bluetooth (BLE), that can notify nearby iOS 7 devices and other devices using an Android operating system of their presence. The iBeacon is location and context aware, and can pinpoint your location in a store. From there iBeacons could send you personal notifications of items around you that are on sale or items you may be looking for. It could enable payments at the point of Sale (POS) such that you don’t need to remove your wallet or card to make a payment.

PayPal is also following this trend with its new Beacon service, due to launch next year. Shoppers will be able to select certain shops where they are automatically checked into, which ones will have automatic payments and which will require approval for payments.

For retailers the iBeacon offers three useful tools: in-store messaging, like sales, specials, and vouchers; indoor positioning to help customers get around a store; and also contactless payment.
“Combining these three uses together, there are some interesting scenarios: Walk into your favourite coffee shop and get a message that says: ‘Welcome back Brendan. The usual?’. Tapping ‘yes’ then lets the user pay for the drink and go straight to the collection point. The customer likes it because they skipped the long queue while still collecting frequent drinker points on their account. And the retailer likes it because they are saving time, effort and money while still collecting that valuable data about the customer and the transaction,” describes Brendan Mislin from Accenture Mobility.

Data Services

When it comes to consumer spending habits retailers are ultimately looking for the bigger picture, which has now been conveniently wrapped up by the arrival of big data. Transactional data from banks, retailers and mobile payment apps is being pulled together and analytics software is trawling through this sea of data to deliver tangible results. These results go on to advise retail businesses of patterns that they can then base their marketing decisions on. Early initiatives have seen retailers push offers to mobile devices and bank statements.

For instance, US data analytics firm Cardlytics recently launched a service called Halifax Cashback Extras in which customers’ online and mobile bank statements provide offers from relevant retailers. Cardlytics partnered with Lloyds Banking Group to provide Halifax customers with targeted deals and has attracted the likes of Homebase, New Look, Ocado, The Body Shop and Urban Outfitters. Cardlytics’ software searches through millions of daily transactions and uses past purchases to offer marketing material on behalf of retailers, which is based on a shopper’s buying patterns. The service allows retailers to provide deals based on where people live by using postcode information. It also shows where shoppers are spending and whether the bulk of their spending is at competitors.

On the delicate relationship between retailers and consumers, where retailers are seeking to understand their customers better, Dave Sheppard of Experian Footfall comments, “If customers can see a clear and relevant benefit from sharing their data, they will be more inclined to share more of their data more regularly. The benefit must be both relevant and worthwhile to each consumer from their perspective, and consist of a simple exchange to redeem the incentive. Retailers that secure consumers’ trust by showing that they care about their customers’ data will be the winners, improving customer relations and ultimately brand experience.”

Digital wallet

The digital wallet is a convenient development for the retail space, which like so many new applications focuses on the rise of internet based services. Any device with internet access can become a mobile wallet (m-wallet), the most popular device currently being the smart phone. The convenience lies it the fact that an m-wallet eliminates the need for someone to carry cash or payment cards on them promoting a securer way of shopping, but also in the point that they allow a faster check out time at the till point or the ability to transfer money between businesses or friends.

The technology behind the digital wallet is near-field communication, the predecessor to the Bluetooth beacon, and the data it utilises includes bank account details, loyalty cards, drivers’ licences. While these wallets are the norm in places such as Japan and Korea, the West is still catching up as telecoms companies, financial services firms and tech businesses find their places in the growing market.

Visa, an ambassador of the e-wallet, has just launched V.me across Europe including in UK, France, Spain and Poland. Dixons Retail and Clarks are some of the 1,400 merchants to sign up to the EPoS tool that stores customers’ card details without them being passed on to the retailer. Visa expects half of its business in the UK – £383.6bn – to be through digital wallets by 2020. “Digital wallets have the potential to solve a number of customer experience problems that retailers grapple with, both in the offline and online worlds – whether it is shaving a few seconds off the queue for a customer doing their weekly shop, using a smartphone to pay for the morning latte without being burdened with small change or ensuring customers’ online checkout journey is both smoother and safer, as the Visa V.me solution aims to deliver, adds Anita Balchandani from OC&C Strategy Consultants.

She continues, “Recognising that the payments landscape which plumbs retail transactions could be ready for a change, a number of players are advancing in this space with their solutions – from the very established payment schemes (Mastercard, Visa), to online payment providers (PayPal), operating system providers (Google Wallet, Apple Passbook), start-ups (Square, Level Up) and even Amazon’s Checkout solution. For some of these players the attraction is not purely access to the payments opportunity, but also access to consumer information across online and offline purchases”.

Fingerprinting

The concept behind using this technology is to make secure payment at EPoS kiosks and to also activate cards or improve mobile browse and buy channels. However, adoption is slow as the technology struggles to gain the trust of the user and find a highly accurate software and reader. Currently, fingerprint recognition software maps the ridges of the fingertip using optical or capacitive sensors as well as heat or pulse triggers, and reacts to a match of a user’s unique print. It is yet to be 100% smudge, grease or imitation proof.

A French supermarket chain ‘Auchan’ and a DIY store ‘Leroy Merlin’ recently ran a successful trial where the fingerprint scan replaced the need for chip and pin at the EPoS terminals. Almost 5,000 transactions were completed with an average of more than €50 (£42) and 94% of participants said that they would be willing to continue to use fingerprint scanning.

“Retailers are testing the use of fingerprints to authenticate POS terminals. However, the technology to make this happen cost effectively is not here and the benefits to the customer in terms of greater speed, ease and security above codes may be outweighed by concerns around privacy and fear of identity thefts. The players in the banking and payments world also have to heavily back this switchover if it is to translate into a universal application. Overall, for the consumer and key industry participants, the benefits of fingerprinting applied to the traditional POS terminal are unlikely to outweigh the investment and effort it would take to roll this out. It may however find a focused use in authentication of terminals by staff as the world of POS evolves from fixed to mobile,” said Anita Balchandani from OC&C Strategy Consultants.

Mobile loyalty schemes

Propelled by the digital wallet and technology capabilities of near-field or beacon communication, mobile loyalty schemes are a route for retailers to enhance their virtual relationships with consumers. According to a survey by e-wallet technology provider CloudZync, shoppers access an average of six loyalty schemes through their mobile devices, compared with just four traditional loyalty cards in their wallet. Why? Digital loyalty offers real time benefits to the shopper as they enter a store, as they search and browse online or in store, and when they make a payment. Armed with a mobile device a consumer can check stock availability, compare prices, read product reviews and receive promotions.

Coffee shop Harris + Hoole has a loyalty app that enables customers to order ‘my usual’ at any branch through their phone. The customer builds their perfect coffee, tea or hot chocolate exactly how they like it (size, espresso shots, milk type, temperature) and when in an any of the Harris + Hoole shops, they check in and the coffee shop receives the order.

John Davison at Gartner says, “While Gartner consumer research indicates that customers are willing to receive promotional offers on their mobile devices, these need to be easy to redeem across the channels. There are a number of solutions available from mobile marketing vendors whose focus is mainly location-based marketing, or vendors whose mobile solutions allow customers to scan a Q R code and pay from the mobile device to purchase that particular product or service”.

Rapid scan systems

Imagine getting to the till point and having multiple lasers scanning all your items in seconds. That certainly beats the current self-serve option at supermarkets these days that are generally cumbersome and temperamental. The rapid scan system improves the speed with which shoppers can check out by using lasers that can record about sixty barcodes every minute.

Asda has introduced such a scanning system that allows customers to scan whole weekly shops in seconds. The Rapid Scan Till designed by Wincor Nixdorf makes it faster than ever to do a weekly shop. Customers just put their shopping on the conveyor belt, watch it pass through the 360° laser scanner that picks up barcodes from every angle and then they can pack it all up in the bagging area. It’s so fast it can increase the speed of scanning shopping by up to 300%, and two shoppers can use it at once.

Dave Sheppard, Experian Footfall, discusses the pros and cons behind the technology, “Rapid Scan is a retail technology that massively improves the speed with which items can be scanned on a retail conveyor belt. Cashiers are not required to manually handle and scan items – therefore there is a time saving. …The Rapid Scan solution also has a couple of limitations, in that the preferred payment process is cashless, and non-standard items, such as loose vegetables that require weighing, still require manual intervention…Rapid Scan is an impressive technology that will contribute to queue management efficiencies including the perception of speed and improvement by the end consumer, and therefore should be embraced as an enabler for queue/payment efficiencies in busy cashier environments.”

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