Cashless Retail – is it time to adopt?
Cash is king, or at least it used to be. Because UK retailers are now watching with interest as some of the world’s biggest brands – think Starbucks, Amazon, Walmart – are ditching cash payments altogether in favour of card-only transactions and cashier-less stores.
The Future of Cash
The top boss at Mastercard has gone on record to say that he thinks cash will be a forgotten commodity in as little as five years’ time in the UK. As technology and artificial intelligence (AI) becomes ever more sophisticated, it’s not hard to imagine a high-street in which you scan your own purchases and swipe your card for payment, just as we now consider a normal option in the supermarket. Or for an Amazon-level experience, simply putting your purchases in your bag and walking out of the store, with advanced technology working out what you have and billing you accordingly. The Payment Council, however, think cash will still account for as much as a third of all payments in the same timeframe, painting a much more reassuring picture for generations of shoppers who aren’t yet ready to part with their paper and coins.
What we do know is that in recent years, card payments have overtaken cash payments (in terms of volume), however purchasing habits do make a difference. The Bank of England has reported that cash is still the most commonly used payment method for spontaneous purchases and Co-op Food has found that around 65% of their transactions are paid for in physical money. So why are big brands trying to make us ditch the cash?
Expensive Cash Payments
Firstly, it’s an expensive way to do business. According to Sage, it costs UK businesses £17.8bn annually to handle and process cash payments when factoring in security, fraud and theft. It’s also inefficient as it takes additional time for customers to rummage for cash, for the cashier to handle the transaction and to hand over any change. Queues could also be a thing of the past as cashless transactions are significantly quicker to process, meaning less standing around waiting for the customer in front of you to finish digging around in their bag or, heaven forbid, having a conversation with the sales assistant serving them.
This also reflects a change in customer expectations when shopping, as it brings into question the role that sales assistants and retail staff have to play in today’s shopping experience. Gone are the days where you’d walk into a store and be immediately greeted by someone offering to help you but for many years, we’ve been able to consistently rely upon someone being fairly close by in the event that we have a question or need some help from a member of staff. In a cashless environment, are we symbolically taking away the ability to interact with sales assistants by creating a self-serve culture? Will customers be expected to research their intended purchases at home on the internet and deal with ‘chat’ functions if they have any questions ahead of visiting a store to simply collect their items? It sounds extreme, but if we think of the current Argos model, this isn’t a million miles away from this though we can, at least, still rely on a level of human interaction for the time being.
There are examples emerging of where the cashless concept is making a hugely positive difference to the customer experience and to the commercial success of a business. In London, a healthy eating chain called Tossed opened one of the first UK cashless physical stores. Catering for customers that are typically in a rush and who are happy with a very transactional interaction, Tossed has adopted a model that meets the needs of its customers while reducing cash processing costs, improving customer efficiency and allowing them to reposition the role of their staff to focus on helping customers rather than processing their purchases.
It’s not just retail that is exploring a cashless future. Q-Park, the car parking provider, is about to adopt a cashless approach to its sites, minimising the need for its customers to keep hold of a ticket or have cash available and to reduce queues getting out of the carpark. Many will see it as a bold move but given changes to shopping habits and the increasing confidence of individuals to use contactless technology and even their phones to make payments, it could be argued that it is simply more of a logical step to offer a more efficient and customer-centric service.
One thing is for sure - there is clear evidence that cashless anything is in the early stages of its journey. It’s not just a decision for brands to make, though clearly they will drive the progress of the cashless experience, but we also have to respect customer appetite to embrace this evolving technology. It’s ok for businesses to be commercially savvy and to prioritise efficiencies where possible but this can’t be at the expense of what its customers want. From not having a bank account to not trusting the technology, or simply a personal preference, many customers aren’t ready to move to a cashless high-street and so retailers must be careful to offer innovations and solutions that whilst perhaps still nudging customers on the journey, still allow them to offer an experience that meets everyone’s expectations. So perhaps, for a little while longer, cash really is still king.
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