Shopper Insight: Cashless Is King


Toby Pickard, IGD’s Senior Innovations and Trends Analyst, gives an overview of the latest developments in cashless retailing and identifies a number of key trends and disruptors to which retailers and brand owners should pay close attention.

When credit cards were introduced half a century ago, the way we use money and make payments was fundamentally changed forever. Since then, technology has advanced quickly, making it possible to imagine a world where payments will be even more digital, mobile, borderless and cashless. It will be essential for retailers to reconsider how their businesses operate in order to meet shifting shopper preferences when it comes to making payments.

The rise and evolution of cards

UK shoppers have really tapped into card payments, with card expenditure accounting for 78% of total retail sales in 2016. This is especially the case in the grocery sector, where we’ve seen the number of transactions and total value of spend both increase steadily. In 2012, we saw the roll-out of contactless cards in the UK, which have been a true alternative to cash payments. Shoppers enjoy the convenience of using contactless cards for smaller payments and because this technology reduces the average time of transactions by 55%, retailers who implement this in their stores will have an advantage.

Check-out alternatives

Over the past few years, there has been a significant shift towards self-service checkouts in the retail industry, especially in supermarkets. Not only are self-service checkouts more operationally efficient for retailers, but they cater to the needs of shoppers who seek convenience and want to get in and out of stores quickly. For example, Tesco’s Queensway London store, which opened in November 2015, has more than 10 self-service checkouts including five card-only terminals, highlighting a new approach to convenience retailing.

Some UK retailers have gone one step further by trialing completely cashless stores. As these will only work in certain locations, store concepts and with certain demographics, there is still a way to go before they become mainstream, although they present a clear opportunity for retailers. Not only do cashless stores improve efficiency for shoppers and staff, but transactions will be more accurate and secure. Waitrose has become the first major supermarket in the UK to operate a completely cashless store. It was launched in August 2016 at Sky’s head office in Hounslow, and has five self-service checkouts where customers can only pay by card or by mobile device.

The complete version of this article is available in the September-October print issue of Frozen Food Europe