Christmas, Easter, Black Friday, Halloween, Singles Day and Cyber Monday, are a few of the examples of the peak trading periods that retailers must meticulously plan ahead to help secure a successful boost in revenues during peak trading periods.  Certain product categories such as home and garden, DIY, winter and summer clothing, will also have different spikes during the year depending on the season.

Shopping behaviour will have an important impact on strategic planning and decision-making for most retailers.  There are important considerations to keep in mind when planning for peak periods for both offline (i.e. in-store sales) and online trading.  Technology is only just part of the solution. What happens to make a frictionless payment at the customer’s touchpoint involves a complex web of interrelated relationships and activities, ranging from stock control, systems management, third-party payment processing and management of a POS acceptance network capable of dealing with a growing number of different digital payment methods.

e-Commerce

The website commonly gains lots of attention during the period leading up to a trading peak.  Stress-testing the website is vital to identify and address potential areas of weakness.  Front and back-end systems must be incorporated into any stress-testing plan.  Many retailer websites are hosted on cloud-based platforms, such as AWS, which will allow for elasticity when the dealing with high transaction volumes.  This can be beneficial; however, it also presents a potential area of weakness during times of extreme traffic levels because they are shared between many different businesses, making any shared services vulnerable to being flooded by transactions.

How the checkout page is designed can help enable the customer complete the process will have a massive influence on the conversion rate.  With shoppers increasingly using smartphones and tablets to make purchases, it is vital for online retailers to measure the conversion rate.  Edgar, Dunn & Company typically sees m-commerce conversion rates at around half of those on desktop.  Improvements in mobile experiences over the past years haven't impacted this figure, showing that the smartphone is more popular as a device for browsing products while desktop is preferred for transacting.  One-click checkout and in-app purchases obviously can help smooth and speed-up the checkout experience.

When things go wrong customers are quick to lay the blame squarely with the retailer even when the point of failure in the system could have been a third-party payment processor. Contingency planning is required to help identify what e-commerce processes and payment acceptance systems need to have as back-up plans when the primary crashes.  In e-commerce, when it goes wrong, it is all too easy for the shopper to open a new browser and shop at another retailer.  This can be a potentially significant loss of business.

On the other hand, when electronic payment systems go wrong in-store the impact can be more painful for shoppers.  They have effectively invested time to locate and visit the store, they have browsed and selected items, but to be confronted with a long checkout queue or even a POS that is not working, it can be very frustrating for the shopper and the sales assistant.

In-store checkout

Black Friday in the US is one of the biggest shopping days of the year; last year Macy’s card processor failed.  Customers were waiting in lines across the US to make purchases, only to find out that the POS machines would not take credit cards or gift cards.  Some Bloomingdale’s stores, which are owned by Macy’s, were also impacted.

Card payments have never been so easy or so fast, and cash has never been used so little.  Contactless payments have undoubtedly sped up the checkout process.  As a result, we expect a 24/7, failsafe payments service, instant authorisation of our preferred digital payment method and instant gratification.  If a bank’s payments technology fails, cardholders can’t buy food, retailers can’t pay suppliers, wages don’t arrive on time, business-to-business payments fail.  Since the system never stops, software glitches are difficult to fix and it is difficult to introduce improvements.  It is similar to repairing a watch without losing time.  A software fix can take weeks or even months to ensure that all the interrupted payments have reached the right destination accounts and card balances are corrected.  The retailer’s payment acceptance infrastructure has a similar challenge.  It is regularly an IT bottleneck.

Mobile Checkout

The fixed checkout in any retail store can be a problem for many customers who either don’t have the time to queue or are simply put off from making the purchase because the wait in line is too long.  What I find frustrating is a line of 6 checkout desks and only one is open because there is only one sales assistant available.  This is a common issue at a big brand chemist in the UK.  mPOS (mobile POS) devices have been an obvious solution to help deal with peak trading times on the shop floor.  Self-service kiosks is another solution.  The benefits for customers is that mPOS can reduce queuing times and provide an enhanced in-store experience.  The Apple Store was probably the first to regularly use mPOS on the shop floor.  Sales assistants armed with a mPOS device can alleviate the pressure on checkout staff during busy times by processing payments anywhere within the store.  This generally increases customer satisfaction.  Faced with a long queue, shoppers may leave the store and a sale could be lost.  mPOS devices reduce that risk.  Apple Store ultimately abandoned the fixed checkout entirely, making all of their staff on the shop floor effectively a mobile checkout.

mPOS devices can also be used for customers to return or exchange items, again helping to reduce queue size at the traditional static customer service desks.  A return or a refund is an area that typically takes longer to process.  Additionally, sales staff can use mPOS device to capture customer information details, such as an email address. mPOS devices offer electronic receipt functionality, which is another simple way to capture customer’s email address.  This can be added in a central marketing customer database and used for future customer communications.  Offers and discounts could be better targeted.

Self-Service

In a supermarket, you have probably gone through a self-service checkout line at some point. Customers scan each item, bag them, and pay without the assistance of any cashier in sight.  Except when it all goes wrong.  In my local Waitrose, the latest self-check devices that have recently been installed do not need to weigh each item in the bagging area to detect those light-fingered customers who pop items that have not been scanned into the bag.  This latest self-service concept allows the customer to make adjustments themselves, for example, if an item is scanned twice accidently, it can be corrected by selecting the individual SKU (Stock Keeping Unit) via the touch-screen and removing it from the itemised bill.  Payment is typically via contactless card or a smartphone.  Super-fast and super-efficient.

If it goes wrong, it is typically the end-user (i.e. the customer) to blame.  Other shoppers in line will just roll their eyes at the customer and be annoyed because of the incompetence of the other shopper, rather than blaming the store for the failure in the process.  Edgar, Dunn & Company expects where self-service checkouts are deployed today, by 2023, the number of self-service checkouts relative to manned checkouts will exceed 5 to 1. The forecast of a big brand grocery store that has only self-service checkouts is expected to be opened in the next 18 months.  Self-service checkouts will be mainstream across the entire retail landscape, including hospitality, casual dining, quick service restaurants and even table service restaurants.  Self-service will not just be seen in the grocery supermarket.

Has self-service addressed long queues?  Can self-service checkouts deal with peak trading periods? Some researchers have suggested the answer to both of these questions is no.  What is particularly interesting is the research from the University of Leicester which shows that theft rates at supermarkets in Europe and the US were twice as high where self-service checkout machines had been installed.  Is this self-service technology turning us all into light-fingered shoplifters?  What will become apparent is that all of our food shopping is expected to increase in price to cover the loss from shoplifting.

Mobile Payment

With a smartphone in every shopper’s pocket and the use of superior barcodes and imaging technologies for scanning products, faster alternative checkout methods will continue to grow across the entire retail landscape.  Since Apple Pay launched in 2014, mobile wallets have flooded the market with offerings such as Samsung Pay, Chase Pay, Android Pay, Microsoft Wallet, Walmart Pay, Tesco PayQwiq and Kohl's Pay.  There are many more examples.  In the first six months of 2017 in the UK, the value of mobile contactless transactions grew by 336% year-on-year to reach £370 million, according to a leading payment processor, Worldpay.

What is clear is that mobile payment technology has some distance to evolve in the next few years. Payment is just one piece of the much larger and more complex digitalized ecosystem at checkout.  The ability to exchange customer preferences, arrange consumer credit on the fly, capture email addresses, collect or redeem loyalty points, initiate a bank transfer payment and not a card payment are just a few examples that can happen in a single point of interaction at checkout, all within a few milliseconds.

The ability to deal with peak trading periods may be a thing of the past when in the future, the ability to pay will be more pervasive, easy, faster and channel-less (rather than omnichannel).  Payment will be anywhere at any point of interaction.