Evolution of the Consumer Checkout

THE EVOLUTION OF THE CUSTOMER CHECKOUT EXPE RIENCE All businesses need to accept payments from their customers; however, the form of those payments has changed over the years. Credit cards have replaced a substantial percentage of cash transactions, and smartphone-enabled digital wallets are slowly replacing credit cards, even for in-store purchases. We review the evolution of the customer checkout experience below with an eye toward where it's headed. •THE PRE-ELECTRONIC ERA• PHASE 1 PHASE 2 ACCEPTING CASH ACCEPTING CHECKS %24 87% By 1998, 87% of all U.S. households had checking %24 60% accounts. 42.5 B. By 2002, there were 42.5 billion check transactions for 15 B. In 1995, 60% of shoppers used cash exclusively for purchases. every 15 billion credit and charge card transactions. •THE RISE OF SWIPING & DIGITAL PAYMENTS• PHASE 3 PHASE 4 ACCEPTING DEBIT & ACCEPTING GIFT CARDS CREDIT CARDS 8% CREDIT CREDIT CREDIT CREDIT CREDIT CREDIT CREDIT CREDIT CREDIT CREDIT 2% CREDIT CREDIT DEBIT DEBIT CREDIT CREDIT DEBIT DEBIT CREDIT CREDIT & LOYALTY PROGRAMS 31% 21% GIFT DEBIT CREDIT GIFT Only 2% and 8% of shoppers By 2003, 31% of shoppers used used debit and credit cards, In 2006, shoppers purchased $80 billion worth of gift cards, and 2/3 of consumers planned to give one to someone. debit cards, and another 21% respectively, in 1995. used credit cards. PHASE 5 ACCEPTING EMV/NFC/MOBILE PAYMENTS Now, retailers can embed promo codes into their NFC processors that are redeemed automatically when shoppers check-out using their NFC enabled devices, including: Advertising these promotions throughout the store will encourage shoppers to buy with their mobile devices. %24 DISCOUNTS S180 BILLION NFC-enabled, in-store mobile PAY payments are expected to rise to $180 billion by 2017. PROMO REBATES COUPONS The number of phones with NFC capabilities will rise to 45% by 2016. 45% GIFT GIFT CERTIFICATES FREE FREE DELIVERY •LOOKING AHEAD• MOBILE POINT OF SALE Every employee is a potential cashier. Apple is the biggest and most prominent retailer currently utilizing the technology. More than 6,000 Nordstrom salespeople use mobile phones to make customer transactions. PAY jcp SELF-CHECKOUT RETIRED RIP In a growing number of stores, consumers can now make purchases on their own anywhere in the store as soon as they are ready to pay, reducing line congestion and eliminating sales friction. USA Today reported JC Penney hopes to eliminate cash registers entirely by 2014. The customer checkout experience has continuously evolved to provide greater convenience, less friction, and a more enjoyable time in the store. Mobile point-of-sale and self-checkout capabilities are poised to lead the shopping revolution in a store near you! SOURCES | MERCHANT WAREHO USE | CHECK PAYMENT SYSTEMS ASSOCIATION | NEW YORK TIMES | ENTREPRENEUR.COM | USA TODAY Merchant Warehouse