Travel Retail’s Positive Disruptors and Innovators
Checkout-free airport concessions – more time shopping, less time queuing?
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In pursuit of a frictionless passenger experience, new technologies are emerging that eliminate the need for cash, cards and checkouts. And it’s a trend that could accelerate in the aftermath of COVID-19. Oana Damian and Muriel Zingraff-Shariff, Commercial Revenue Experts and Partners at specialist advisory firm Damazo Group, consider what airport operators can do – now and in the near future.
Everything should be made as simple as possible, but not simpler.
The Amazon Go store concept is explained in this video
Given the rise in digital currencies, card and in-app payments, current technology developments focus on making payments totally invisible, write Oana Damian and Muriel Zingraff-Shariff.
In retail shops and restaurants, ‘checking out’ or ‘getting the check’ will be a thing of the past. We’ll simply walk out of the building, and our mobile devices will pay the tab automatically.
Our connected car will automatically pay for gas when we fill up at a gas station, while also negotiating a new insurance premium each month based on our driving behaviour, based upon data picked up by onboard sensors.
The first step towards this future is the implementation of frictionless payments. This will soon become the norm, in line with the growing consumer appetite for seamless digital and in-store experiences.
According to Juniper Research, invisible payments will process US$78 billion of in-store retail transactions by 2022, driving revenue growth of about US$300 per customer.
Lotte Duty Free partnered with mobile payment platform VIMO to allow Chinese customers travelling through Vietnam’s Da Nang International Airport to use WeChat Pay
Airports are already embracing the trend and responding to new consumer expectations. Munich Airport has recently introduced ‘Smart Checkout – Tap, Pay & Enjoy’ – a mobile payment solution designed to offer quick, convenient digital shopping. Consumers use their smartphones to pay for items right at the store shelf by scanning an electronic price tag. The customer is then redirected to a mobile website to fulfil the payment.
In Asia Pacific, where in-app payments are a widespread trend – facilitated by the likes of Alipay and WeChat Pay – seamless shopping experiences represent the expected standard.
Lotte Duty Free partnered with Vietnamese mobile payment platform VIMO to allow Chinese customers travelling through Vietnam’s Da Nang International Airport to use WeChat as a form of payment at their location. It’s simple: Choose – QR Scan – Pay. Bingobox in China allows customers to pay using WeChat at self-checkout machines. [As we report on our home page and elsewhere in these pages, Lotte Duty Free has also just launched its Smart Store, a hi-tech zone in its Seoul downtown flagship that minimises face-to-face contact – addressing a concern of consumers during the COVID-19 crisis -Ed]
Just Walk Out technology automatically detects when products are taken from or returned to the shelves and keeps track of them in a virtual cart
Shop and go
The second step towards a bright, frictionless future is the concept of checkout-free shopping. To some degree it is already a reality thanks to innovations like Amazon Go’s cashier-less stores. In a world-first for airports, OTG is deploying Amazon’s Just Walk Out technology at select CIBO Express Gourmet Market stores at US airports (see FAB eZine wiht this edition).
China’s retail giant Alibaba, which is already at the global forefront of new payment technologies, is continuing developments in the space, by merging facial recognition, mobile apps and more to connect the digital and physical environments to ensure seamless transactions. Checkout-free solutions are likely next.
Amazon Go looks like the perfect experience design for the quick, in-and-out, concession-type trip which would suit the time-restricted nature of travel retail. In the context of rapidly growing passenger traffic, airports are exposed to a variety of converging factors which may negatively affect the passenger experience. These include: increasing infrastructure constraints, reduced dwell-time airside, passenger processing inefficiencies, shop queues, and the all-time bottleneck – security control queuing.
As over 80% of sales happen during the famous ‘golden hour’ between security and boarding, reducing the time dedicated to completing a purchase through the elimination of the cashier payment phase means more time can be dedicated to the experience of shopping in itself.
This leads to increased basket value, less cart abandonment due to time constraints, and more customer interaction for up-selling and cross-selling opportunities. Ultimately, it creates a positive passenger journey through the long-winded walk-through shop designs which are of no use when passengers are rushing to their gates.
So what can airport operators do? While deployments of invisible payment systems may currently incur high costs and complex infrastructure integration requirements, the use of in-app payment and scanning solutions would be an interim step worth exploring.
One thing is certain though: digital equals data. Airports are still lagging on the use of big data when it comes to knowing the individualities of millions of passengers who are passing through their terminals.
Cashless and checkout-free technologies enable the capturing of data, which in turn translates into personalisation opportunities – a must if we’re talking about seamless and highly enjoyable passenger experiences.
Damazo Group was founded as a specialist advisory firm which aims to go beyond the industry-specific commercial due diligence, by considering tech innovations and ever-changing passenger travel trends. Click here for more information.
The Moodie Davitt eZine
Issue 278 | 7 April 2020
The Moodie Davitt eZine is published 12 times per year by The Moodie Davitt Report (Moodie International Ltd). © All material is copyright and cannot be reproduced without the permission of the Publisher. To find out more visit www.moodiedavittreport.com and to subscribe, please e-mail firstname.lastname@example.org