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The new ways to pay

Decathlon 1

The rise of in-aisle mobile payment in grocery raises questions about how fashion can innovate to improve the checkout experience

Walk into certain branches of Tesco and the Co-op, and you can scan and purchase items without interacting with a single member of staff. Sainsbury’s and Waitrose have also been experimenting with till-free stores as a way of eliminating queues. Yet the idea of letting a customer check out on their mobile – or even at a self-service point – still feels alien in fashion retail.

This is set to change. Consumers are becoming increasingly accustomed to making payments via mobile devices, and this is forcing fashion retailers to review the in-store checkout process. An increasing number of fashion retailers now offer mobile payments and self-checkout, and tills are being removed or replaced by click-and-collect desks. Proponents say investment in mobile payment and self-checkout technology is worth it to meet consumer expectations, and remove the pain point of queues.

When a customer is in store and wants to buy your product, you need to get them through the checkout as quickly as possible

Francis Rodrigues, Radley

Indeed, there is a growing demand for this technology among the fashion consumer, research by Mintel in December 2018 shows. Just under a third (31%) of fashion shoppers in the UK say they are interested in using self-checkouts. This rises to 44% among 16-to-24-year-olds.

Meanwhile, the use of cash is in sharp decline. The British Retail Consortium’s annual payments survey 2018 revealed cash accounts for just 22% of all retail sales, and this is expected to fall further.

“Speed is particularly important to young consumers and retailers that are targeting a youth fashion audience will be most at risk if they don’t keep up with rapidly evolving trends in payment technology,” says Samantha Dover, senior retail analyst at Mintel.

Credit check

Another factor is the rising demand for “buy now, pay later” services such as Klarna and Laybuy, which leads to a different interaction between staff and customer. The customer has to provide their mobile number at the point of sale, and then receives a unique URL via text message, which they click on to choose terms and complete the payment.

Additionally, the emergence of platforms such as Hero and Jisp, which connect online shoppers to stores, support a fluid customer purchasing process across sales channels – and, in some cases, remove the transaction from the store altogether while still crediting it for the sale.

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Zara Westfield Stratford City

Harvey Nichols has embedded Hero’s software into its website. Online shoppers seeking more information can use the functionality to alert and talk directly to a member of staff in store. 

Jisp is being trialled by several retailers. Moss Bros tried the software in 2018, where it encouraged shoppers to use the app to scan products at the shelf edge to receive additional product information. It allows for in-store browsing to be recorded digitally, so stores can measure their influence on an online sale. In addition, in-store shoppers are able to place items in an online basket, but make their final purchasing decision later.

In the UK, Zara is trialling self-service units in London, where shoppers scan, pay, and remove security tags without staff involvement. Matalan is testing “assisted-service checkouts”, whereby customers scan their items using RFID technology, before the final card transaction is completed by a shop assistant who covers multiple points of sale.

We look to in-store app features to help remove friction points for consumers in their shopping journey

Marcus Wade, Nike

Nike 2

Nike is experimenting with new checkout technology

Nike’s New York flagship allows shoppers to scan items in store and pay for them via the Nike app before walking out, and there are plans to introduce this functionality in Niketown London in Oxford Circus. The London store already offers app users Nike Scan, whereby QR codes on mannequins or clothing rails are used to alert stockroom staff to prepare items.

Marcus Wade, vice-president of global internal communications at Nike, says: “We’ve seen incredible engagement with features such as Nike Instant Checkout, as well as other self-service-led functionality. We look to these in-store app features to help remove friction points for consumers in their shopping journey and to elevate their experience with the brand.”

Outside the UK, sportswear retailer Decathlon is experimenting with a “cashierless” concept in its Rotterdam and Eindhoven stores in the Netherlands. It is working with Mishipay to support “scan and go” payments, which allow Decathlon app customers to scan an item at the shelf edge to deactivate its RFID security tag before paying without visiting a till.

Mobile zone

Away from self-service, more fashion retailers are investing in staff-assisted mobile checkout, using tablets.

Premium bag brand Radley offers staff-assisted mobile checkout to “queue bust” at peak times. It is now developing the technology – for example, by enabling ship-from-store fulfilment options.

Radley’s head of IT, Francis Rodrigues, says: “When a customer is in store and wants to buy your product, you need to get them through the checkout as quickly as possible.

Traditionally the whole of our store back walls would have been a big cash desk

Sara Metcalfe, Schuh

“Online, everyone looks at how many clicks it takes to get checked out, and how fast a conversion is, and that shouldn’t be any different in stores. Getting customers through that journey as quickly as possible is important, especially at busy times.”

Schuh’s new TwentyTwenty concept stores in Livingston and Bristol, which opened in April and May respectively, do not have cash desks. Most customers are served “at their feet” using Schuh’s iScan tablet device, which enables staff to check the number of products in the stockroom, to reduce customer journey time.

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Schuh Bristol

Head of visual merchandising Sara Metcalfe says the stores were designed to bring “the younger, primary customer back”: “Traditionally the whole of our store back walls would have been a big cash desk. We are moving away from built-in cash desks through the use of tablets and flexible payment kiosks.

“It also de-clutters the shop floor, allowing merchandise to be better showcased.”

Customer caution

However, there is still some scepticism about whether today’s fashion consumers will embrace mobile and self-service checkout technology with the same ease as they have in supermarkets.

Dover points out that the technology required to speed up transactions in store requires a “big investment”, and will not suit every customer: “Fashion is often an emotional purchase, and for every consumer that wants to buy products unassisted, there are others that want contact and guidance from people in store.”

Starting with its array of store openings in 2018, luxury British label Paul Smith has been introducing mobile point-of-sale technology with software provider Cegid.

Russell Thompson, retail operations manager at Paul Smith, says it prefers to keep its use of technology subtle, rather than “in the customer’s face”: “We don’t want all our store associates to carry around iPads,” he says.

Crimes seen

Detractors of self-checkout technology also warn about the increased risk of shoplifting.

There was a 15% rise in theft across all UK retailers in 2018, the British Retail Consortium reported, and the surge has been partly attributed to the increased use of self-scan checkouts.

But independent consultant Craig Crawford says: “As anti-theft devices become smaller and less arduous to deactivate – think deactivation upon payment as opposed to having to demagnetise and unclip a security tag – there is no reason why fashion can’t be more ‘grab and go’.”

There is no one-size-fits-all strategy for the fashion retail checkout. While the grocery sector innovation has already moved on from self-service checkouts to in-aisle payments and checkout-free stores, fashion is moving at a more gradual pace. But the speed of technological advances means fashion retailers have more tools at their fingertips to improve the checkout process in a way that works for their customers.   

Readers' comments (1)

  • "Buy now, pay later". The advantage for the retailer is obvious. But if the retailer introduces a customer to a credit or store card provider, or to a company that will pay the retailer and recover the cost from the customer in instalments, so the customer can buy now and pay later, the retailer might engage in the FCA regulated activity of credit broking. This can only be done lawfully by FCA authorised firms, and their properly appointed Authorised Representatives (ARs). But credit broking without being authorised or an AR is an offence and prosecutions can follow. Perhaps worse than that(!), whether there’s a prosecution or not, the retailer might find that it has a bunch of unenforceable contracts, so it won’t be paid the commissions and fees, despite the work it’s done, and the risks it’s taken.

    So: never mind buyer beware. In this case, there’s a degree of retailer beware too.

    Chris Finney
    Fox Williams LLP

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