PaymentsJournal
SUBSCRIBE
  • Analysts Coverage
  • Truth In Data
  • Podcasts
  • Videos
  • Industry Opinions
  • News
  • Resources
No Result
View All Result
PaymentsJournal
  • Analysts Coverage
  • Truth In Data
  • Podcasts
  • Videos
  • Industry Opinions
  • News
  • Resources
No Result
View All Result
PaymentsJournal
No Result
View All Result

Frictionless Checkouts May Lead To Loss Prevention Challenges

Don Apgar by Don Apgar
January 14, 2022
in Analysts Coverage, Merchant
0
Frictionless Checkouts May Lead To Loss Prevention Challenges

Frictionless Checkouts May Lead To Loss Prevention Challenges

0
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn

Contactless and frictionless are the two words that we hear most often when we talk about improving the customer experience at checkout, but the big challenge for merchants is how to keep losses low while making customers happy. Amazon made headlines when it announced its new Just Walk Out (JWO) technology, enabling customers to avoid a stop at a central checkout and have purchases billed automatically to their Amazon accounts. Behind the scenes, the Amazon test stores are armed with a bevy of scales, sensors, and cameras that record in-aisle activities and determine what products are being selected and purchased. While the technology is there, large format retailers like supermarkets and discounters can’t generate an acceptable ROI from the hardware investment required to outfit a large store. 

Self-checkout has been the most common solution that merchants deploy to address shoppers’ demands for speed and convenience. 

“Trying to remove the friction from the transaction—that’s what every good retailer is trying to do,” said Randy Dunn, technology leader at Sensormatic Solutions. “But it doesn’t surprise me that’s creating some challenges for the asset protection world.” 

From a loss prevention perspective, self-checkout contains the area that must be monitored to ensure that payment is being made for each item purchased, making it much more cost-effective to deploy vs. outfitting a whole store like Amazon’s JWO.

Further making checkout a challenge for loss prevention is the fact that checkout itself is rapidly moving from inside the store to shoppers’ personal devices. 

“As that happens, we have to think about what else has to change with the assets that are being checked out and delivered,” former Walmart innovation leader, Myron Burke, noted.

With the fast growth of omnichannel commerce, merchants are increasingly leveraging mobile app functions to support in-store shopping with product locators, QR scanning, and more; what has not been added is the ability for the shopper to use the merchants’ mobile to pay for a purchase in-aisle. The limitation is not technology, but loss prevention. How does the merchant know that payment has been made when you leave the store?

Merchants as a whole are not slow to adopt new technology, but a 2018 study by the University of Leicester found that stores that deployed self-checkout lanes experienced 147% more inventory shrinkage than those without. Amazon has not made shrinkage data available for its stores using JWO technology, so merchants are moving judiciously to ensure that removing friction for shoppers doesn’t mean they are literally giving the store away.

Overview by Don Apgar, Director, Merchant Services Advisory Practice at Mercator Advisory Group

Tags: AmazoncheckoutContactlessFrictionlessinventoryMerchantMerchantsMobile AppMobile CheckoutMobile Self-Checkouttechnology
0
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn

    Analyst Coverage, Payments Data, and News Delivered Daily

    Sign up for the PaymentsJournal Newsletter to get exclusive insight and data from Mercator Advisory Group analysts and industry professionals.

    Must Reads

    cross-border payments

    Cross-Border Payments: Fighting
    E-Commerce Fraud Using Data

    March 20, 2023
    fraud, ChatGPT-4

    How to Fight Fraud While Still Enabling a Great Online Customer Experience

    March 17, 2023
    RTP

    Financial Institutions Without an RTP Strategy Risk Being Left Behind

    March 16, 2023
    visa chargeback

    New Visa Chargeback Guidelines Will Be a Game Changer

    March 15, 2023
    liquidity management

    Liquidity Management Takes on Increasing Importance in Uncertain Economic Times

    March 14, 2023
    payments

    Key Challenges from Growing Payment Methods and Volume

    March 13, 2023
    Data Governance is a Journey, financial data

    How FIs Can Power Their Operations with a Modern Data Architecture

    March 10, 2023
    ISO 20022

    How Banks Can Realize Business Benefits and Reduce Payments Fraud With ISO 20022

    March 9, 2023

    Linkedin-in Twitter

    Advertise With Us | About Us | Terms of Use | Privacy Policy | Subscribe
    ©2023 PaymentsJournal.com

    • Analysts Coverage
    • Truth In Data
    • Podcasts
    • Videos
    Menu
    • Analysts Coverage
    • Truth In Data
    • Podcasts
    • Videos
    • Industry Opinions
    • Recent News
    • Resources
    Menu
    • Industry Opinions
    • Recent News
    • Resources
    • Analysts Coverage
    • Truth In Data
    • Podcasts
    • Industry Opinions
    • Faster Payments
    • News
    • Jobs
    • Events
    No Result
    View All Result

      Register to download the Autorek complimentary report: Payments Industry Outlook 2023: