21 October 2017
Julian Wallis

Retail perspectives

Julian Wallis - Rambus

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The rise of Scan and Go technology and how it works

09 October 2017  |  4428 views  |  9

The way that consumers shop in-store is fundamentally changing. The rise of ‘Scan and Go’ technology, coupled with other industry developments, is helping retailers to overhaul the buying experience that they offer their customers. So, what do retailers need to know about Scan and Go, and what are its benefits?

The Scan and Go Story

Scan and Go technology is designed to make the shopping experience simpler, faster and more convenient for consumers. Just as barcode technology transformed the efficiency of retail stores in the early 1980s, Scan and Go is set to become retail’s next great disruptive technology, improving a range of existing retail practices.

Just as self-checkout machines are more efficient than waiting in line for an assistant to scan items and process your payments, Scan and Go is the next logical step in streamlining and enhancing the in-store experience.

Early deployments of Scan and Go technology require shoppers to carry a handheld scanner around the store with them. Instead of going through the lengthy process of scanning items at the end of the visit, customers can scan each item as they put it in their cart. This allows them to pack while they shop and arrive at the checkout with a pre-scanned list of items, both of which accelerate the payment process.

However, some of these implementations have been flawed and are not without their challenges. Shoppers still need to go to a checkout at the end of the process and retailers lose valuable floorspace to make room for storing the handheld scanners. The goal of frictionless shopping has not been fully realized.

But now there’s a new generation of Scan and Go technology. One that replaces the handheld scanner with a simple app on consumers’ smartphones. The surge in contactless payments and growing use of mobile payment services, like the various OEM Pay platforms e.g. Apple Pay and Samsung Pay, are testament to the fact that consumers are embracing innovative technology. Now retailers have what they need to take this to the next level.

How does Scan and Go shopping work?

In the more sophisticated mobile app versions of Scan and Go, shoppers scan items with their smartphones and then easily pay for their shopping in-app, removing the need to wait in line altogether.

Your typical user journey would work like this. You download the Scan and Go app of your chosen retailer at home and link it with your preferred payment card(s). Each time you enter one of the retailer’s stores, you scan items using your phone’s camera and pack as you go. Your app adds each scanned item to your virtual cart and, when you’re done, you pay in-app and walk out of the store. Simple.

Of course, retailers will want to deploy Scan and Go technology in slightly different ways. But there’s a whole raft of features and benefits that are hard to ignore.

What are the benefits of Scan and Go?

First up, it allows checkout lines and lengthy payment processes to be skipped altogether. By paying via an app in an in-aisle checkout process, customers enjoy a frictionless buying experience. This also means that retailers can free up floor space previously occupied by checkouts and redeploy staff to different roles. Automated digital receipts also avoid having a wallet full of paper. Good for consumers and the environment, not to mention saving the retailer money.

Scan and Go systems can also incorporate AI technology, augmented reality and personalized adverts to tailor the consumer experience. Proximity-based in-store advertising, pushed out as notifications to shoppers’ phones, can adapt displays and offers to customers’ individual preferences as they approach different beacons in the store. Retailers can also benefit from having an unprecedented insight into their customers’ purchasing data and shopping trends. This in turn can facilitate real time upselling and cross-selling to maximize sales.

What’s more, the buying experience can be enhanced. By combining all this with digital loyalty schemes and coupons, it’s even possible for consumers to choose the payment mix that suits their preferences, paying for a single basket with a combination of payment cards, loyalty points and offers. And to top it off, retailers can reduce their transaction fees by offering customers digital store-branded cards – a feature which can be easily implemented into a Scan and Go system. That means they keep more of the profits!

So, the advantages are numerous and the possibilities are endless. Growing numbers of consumers are willing to embrace technological innovations, and retailers are eager to find ways to improve buying experiences. It’s not a question of ‘if’ Scan and Go will become the norm – it’s a matter of ‘when’. Don’t get left behind.

 

 

 

TagsMobile & onlinePayments

Comments: (10)

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune | 09 October, 2017, 19:25

'Scan & Go' has been around for years. It failed to set retail on fire because it let shoppers easily carry out pilferage by simply not scanning an item before dropping it into their shopping cart. To solve that problem, a store anyway had to have its security guard physically verify that all items in the basket were scanned and paid for. Keen on knowing if Scan & Go has solved that problem. In any case, doesn't Scan & Go sound a little dated in the age of Amazon Go? 

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Julian Wallis
Julian Wallis - Rambus - Rotterdam | 10 October, 2017, 12:27

There is always a risk of theft in any retail environment and any potential up lift in theft can be off set through increased product display, customer throughput, sales and loyalty. Merchants can implement a number of measures to mitigate against it which could include a robust signup verification process, initial spend limits, entry and exit scans / gates, random security checks and checks across x number of users and auto billing post exit. It is down to each retailer to decide what is the best approach while balancing this with the frictionless shopping goals but one thing for sure is that we are now seeing increased interest and deployment across a number of large retailers including Walmart and Sainsbury's.

Amazon Go is indeed highly innovative and helping raise awareness of frictionless shopping technology. While it is in its infancy the solution requires more hardware infrastructure so mobile phone based Scan and Go is far easier to implement and allows retailers to introduce new payment / checkout technology in the most cost effective way. 

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João Bohner
João Bohner - Independent Consultant - Carapicuiba | 10 October, 2017, 14:41

The solution is very simple.

It is only putting an RFID label on each item.

Each un-scanned label is kept 'alive' and will be detected on the exit Antenna, activating security.

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Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune | 10 October, 2017, 15:53

Well, if you put an RFID label on each item, you don't need Scan & Go. Actually, Metro Germany and a couple of other big box retailers conducted pilots using RFID labels in circa 2002, which was well before smartphones came into existence. The shopping cart had an RFID scanner. As items embedded with RFID labels were dropped into the cart, they were automatically scanned and the bill was printed out at the end. (Alternatively, there were a few central RFID scanner gantries at checkout, you could simply wheel out your cart through them, all items would be (theoretically) scanned at one shot, so there was no queue). This solution was also pilfer-proof. However, it failed to gain traction because of the high cost of the labeling solution in terms of material cost of the RFID tag and labor cost of affixing them on each and every item in the store. Memory serves, Scan & Go type of solutions were developed as a more cost-effective alternative for RFID based solutions. AFAIK, the RFID solution is still too costly for mainstream adoption even today. So RFID add-on to Scan & Go is a non-starter.

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João Bohner
João Bohner - Independent Consultant - Carapicuiba | 10 October, 2017, 17:55

The  'high cost of the labeling solution' is diminished if the manufacturers already incorporate the labels into the items.
Of course, if employees have to tag each item, the cost is increased.

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Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune | 10 October, 2017, 18:57

The data carried by the RFID tag (e.g. price) is known only to the retailer. Ergo manufacturer can't "incorporate the labels into the items".

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João Bohner
João Bohner - Independent Consultant - Carapicuiba | 10 October, 2017, 20:25


@Ketharaman,

You can read, write, change the data in the memory of a RFID label - just as 'scanned or un-scanned' status.

Also you can write on which shelf the item is located, to control your RTLS.

So, it really can be a solution within the 'Scan & Go', as the cost of RFID labels dropped to some fraction of cents.

And, yes, you can simply wheel out your cart through an exit RFID scan portal antenna and all items would be scanned at one shot.

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Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune | 11 October, 2017, 10:07

Hypothetically, if RFID solution has become affordable now, Scan & Go is redundant.

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James Piggot
James Piggot - Finastra - London | 12 October, 2017, 08:07

Scan and go is alive and kicking in some UK supermarkets using purpose built scanners. The cost of the scanners plus extra security is offset presumably by the saving in checkout staff. The friction seems high and presumably this appeals to people anxious to know how much they are spending as they shop?

A phone app using RFID seems like a good idea, maybe someone will invent an app that tells the shopper they can get that item cheaper down the road?

 

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Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune | 12 October, 2017, 10:20

@JamesPiggot:

'Self scan and check out as you move around the store' has been around for nearly 15 years based on dedicated scanners, which, AFAIK, are RFID readers I mentioned in my previous comment.

The way I understand "Scan & Go" in the context of this article, it's similar to what they call "Mobile Self Checkout". By definition, MSC works on customer's smartphones, not dedicated scanners owned by stores.

By "app that tells the shopper they can get that item cheaper down the road", you probably mean "showrooming". If so, such apps have been around for 5-7 years e.g. RedLaser, Amazon PriceCheck, Scandid. A few years ago, showrooming was expected to go mainstream but that hasn't apparently happened so far. More in my blog post on my company blog How Can Organized Retailers Respond To Showrooming? (hyperlink removed to comply with Finextra Community Rules but this post should appear on top of Google Search results when searched by its title).

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The rise of Scan and Go technology and how it works

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I have been working in payments technology since the 1990s and have held a number of senior roles in well-known organizations. I have hands-on experience of Chip and PIN, ecommerce, mobile and other a...

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