No-Touch & Go

MAPCO is partnering with Grabango to enable its shoppers to skip the checkout line.

Contactless convenience is becoming the new norm in the convenience channel

By Melissa Kress

TO SAY THAT THE COVID-19 pandemic has had a major effect on convenience store technology is an understatement. The global health crisis impacted all areas of life when it struck in early 2020, including changes in how consumers want to shop. Many c-store operators found themselves having to play catchup to meet consumers’ new wants and wishes.

“The pandemic accelerated consumer adoption of digital technology and forever shifted how consumers expect to engage with their favorite brands — whether they are restaurants, retailers or convenience stores,” said Chris Abele, vice president of Carat and Digital Commerce at Brookfield, Wis.-based Fiserv, a global fintech and payments company.

The checkout process and how consumers pay for their purchases is one shift.

“Contactless payments are an interesting topic right now. Before COVID, I think it was a project led by technology people, but not moving very quickly in retail. Then, COVID hit and it accelerated a lot of things including contactless payments,” said Will Glaser, CEO and founder of Berkeley, Calif.-based Grabango.

Grabango, which offers a contactless checkout solution similar to Amazon's walk-in, walk-out technology, is currently working with industry retailers such as MAPCO, Giant Eagle/GetGo, BP and Circle K, and will soon be adding three more to its platform.

Slow to Change

Pre-pandemic, the convenience retail channel was historically known to be a slow adopter of contactless commerce, but that was mostly because consumer adoption of digital solutions was

relatively low and the cost to implement new technologies often outweighed the benefit, Abele explained.

"With consumer behavior shifting to digital interactions drastically during the pandemic, c-stores today are being pushed to reimagine purchasing experiences for their customers and implement new omnichannel purchasing options for their customers," he said.

The good news is that using digital payment technologies is proving to bring great benefits for businesses by improving the customer experience. These technologies are also enabling businesses to capitalize on the benefits of customer data and streamline customer loyalty, digital marketing and other connected experiences, according to Abele.

One challenge in the convenience channel is the degree of segmentation between operators, pointed out Roy Stephenson, senior executive of retail, fuel and convenience at Diebold Nixdorf, a retail technology systems provider. Singlestore owners account for 61 percent of the industry.

“Being a single-site owner means that you do not have the proper structure, such as a lab to test new technology, prior to deployment,” Stephenson said. “In the past, several convenience store retailers experienced issues going straight to the deployment of new technologies before staging them in a lab. That’s why they are more hesitant to upgrade/replace technology, and the majority stay with what is currently working.”

Open to New Ideas

The channel’s hesitancy to embrace new technologies, however, has been eased by the pandemic, especially when it comes to contactless options. Solution providers report that there’s been a noticeable uptick in interest.

The vast majority of convenience retailers are looking for contactless and self-service solutions to fit into their current infrastructure, but they are struggling with the offerings from their current point-of-sale (POS) providers, Stephenson noted.

“POS providers have a ‘self-service’ offering, but they are not a traditional form factor. Therefore, the adoption pace is slower than in other industry segments,” he explained.

Key to finding success with self-service is choosing the proper equipment, as well as planning and placement, all supported by an advisory service that will actually design the solution based on each retailer’s needs, according to Stephenson. “Otherwise, the chances that the retailer will reach the expected results are low,” he cautioned.

Moving forward, Fiserv foresees no slowing down in the adoption of contactless, digital and other omnichannel payment experiences. Carat from Fiserv, an ecosystem of omnichannel commerce solutions for large national and multinational companies, recently conducted in-depth research that combined a study of more than 2,200 American consumers with a look at $3 trillion in payments volume to identify trends in omnichannel payments. According to the study:

“The pandemic accelerated consumer adoption of digital technology and forever shifted how consumers expect to engage with their favorite brands — whether they are restaurants, retailers or convenience stores.”

— Chris Abele, Fiserv

How Cash at the sco can ease labor issues

It’s 2022--Retailers have recognized the value of selfcheckout technology and the benefits it will bring to their stores including easing labor shortage problems, improving the customer experience, and, of course, increasing the bottom line. Now you need to consider how to deploy your self-checkout to best suit the needs of your stores and your customers; the big question is— do you automate cash, or go completely cashless?

You may be leaning toward cashless—it’s less costly upfront, and card payments seem more like “the future.” Let’s examine that assumption—can you get the full ROI you expect from your self-checkout without adding cash? First consider from the perspective of the speed of service; self-checkout will move your customers through the line faster and eliminate long lines at peak times of day. If you’ve only automated cashless payments you haven’t solved the complete problem, and will not be able to repurpose cashiers to take on additional store related tasks, like cleaning, stocking shelves, etc. Stores that struggle with staff shortages will find relief by allowing their customers to checkout without their assistance, ensuring only one cashier is required to ring up ageverified products.

47% of all purchase values under $25 are paid in cash Next, think about your customer’s experience. For the average purchase in convenience stores, consumers overwhelmingly choose cash; 47% of all purchase values under $25 are paid in cash. The percentage of cash usage in your stores may be even higher given that the average c-store transaction is between $3.75-9.00; recent studies report around 40-50% of purchases are made in cash. In addition to preferences, the Federal Reserve estimates 20-28% of the population is currently “unbanked,” or “underbanked,” and do not have access to card payments. Cashless only self-checkouts could lead customers to perceive unfairness—why should they wait in line while the card paying customer can breeze right through? It’s not worth the risk alienating such a large portion of your customers.

Card-only self-checkouts will still require a cashier to handle all cash payments, increasing the likelihood that lines will continue to be long at rush hour, and risk customers walking out without purchasing. 41% of customers will abandon their purchase if they see a long line, and one bad experience can sour customers on your entire business. Almost half of consumers avoid a specific store if they have to wait longer than 5 minutes. No one wants to lose business due to customer dissatisfaction, and these lines can be effectively eliminated by deploying cash automation with self-checkout.

41% of customers will abandon their purchase if they see a long line

Lastly, cashless processing isn’t always as cheap as it seems to be. There’s a good chance cash payments cost less as a percentage of your revenue than cashless. Driving customers to cashless may actually increase costs and negatively impact profit margins.

In order to fully reap the benefits of your self-checkout deployment you need to include both cash and cashless payments. Cash automation makes it a well-rounded solution and delivers a superior ROI for your business.

Scan to learn how your business can benefit from adding cash to your store’s selfcheckout.

• In-store contactless transactions have increased six-fold since the start of the pandemic; • There has been a five-fold increase in digital wallet transactions online; and • 43 percent of consumers have used a digital wallet to pay in-store within the past month.

Grabango is also seeing an uptick in interest for its contactless offering, according to Glaser. “Pretty much every retailer we talk to loves it because it’s a much better user experience. You can get into and out of the store very quickly. There are no lines. The guest experience goes from 10 minutes down to seconds. It’s delightfully easy to use,” he said.

Unlike self-checkout kiosks, Grabango technology does not take up any space on the selling floor. The technology enables shoppers to skip the checkout line and simply walk out after scanning the code in their Grabango app. The system keeps track of what they picked up.

“Those self-checkout kiosks you see in grocery stores are a brutal compromise,” Glaser said. "Consumers hate lines, and retailers hate seeing their customers dissatisfied in-store. Neither side really likes those machines, but many still need to have them today.”

Personal Service in a Contactless World

In a channel that prides itself on customer engagement, offering contactless convenience can become a balancing act. The possibility of losing that personal connection is a concern for Lisa Dell'Alba, president and CEO of Bethlehem, Pa.-based Square One Markets Inc., which operates seven convenience stores in northeast Pennsylvania.

In a recent webinar hosted by Conexxus, a member-driven technology organization dedicated to the convenience store and retail fueling market, Dell'Alba said interacting is a key piece of her view toward the business. So much so that she eyes self-service with some hesitancy.

“When we talk about the industry as a whole, one of the things that comes up often is that we are part of the community. I think, right now especially, we are lacking in significant face-to-face connectivity,” the small operator explained.

Consumers have become accustomed to talking on screens and using phones, and she admits she uses third-party providers like Grubhub and Instacart. "But at the end of the day, I think we appreciate interpersonal connections,” she said.

On the employee side, face-to-face interaction with customers is important for developing any career path.

OVERCOMING C-STORE CHALLENGES WITH SELF-SERVICE TECHNOLOGY

Today’s c-store consumers are more demanding than ever. It isn’t just about fuel—and “drinks and smokes”—anymore. Shoppers want a wide variety of products and services, including a broader range of groceries; freshly made items; convenient, healthier meal options; and more—and they want them fast, with minimal frustration. C-store operators must catch up and rise to the challenge—and self-service technology can help to get them there.

Consumers encounter multiple annoyances while shopping at brick-and-mortar stores, while c-store operators face many challenges. What tops the charts?

Shopper Frustrations Hotlist1

1“The items I wanted were out of stock or unavailable.”: 40%

2

“I had to wait in a checkout line queue, or my shopping trip took a pretty long time, even though I was only buying a few items.”: 27% and 22%

3“I couldn’t fi nd the items I wanted right away.”: 24%

At the same time, obstacles litter c-store operators’ path.

Operator Challenges Hotlist

1

Finding the right self-checkout solution, especially one that works for smaller, independent c-store retailers

2Labor shortages, made worse by the “Great Resignation”

3

Adapting to changing shopper needs—including offering wider variety of products and services—to remain competitive and relevant

SELF-SERVICE DOES DOUBLE DUTY

Optimizing the checkout process through self-service technology lets c-store operators:

.Focus staff resources on eliminating shopper frustrations and improving the customer experience . Overcome labor challenges, increasing manpower and freeing up store associates

Consumers favor self-checkout, too.2

45% of U.S. grocery shoppers generally prefer self-checkout

of consumers would adopt selfcheckout if retailers promoted the option more actively—for example, proactively encouraging shoppers to use it in-store

69%

SETTING THE STAGE

When it comes to self-service technology, no two c-stores are exactly alike—and no single solution fi ts all operators. Diebold Nixdorf works with c-store operators to build and implement the right self-service solution—one that suits its specifi c needs, product/service assortment, available space, and other parameters and enhances the customer journey from beginning to end.

Diebold Nixdorf’s DN Series Easy comprehensive self-checkout platform: . Is a complete portfolio of highly modular self-service . . solutions built on a single platform Accommodates customizable confi gurations Features best-in-class components and an optimized footprint

“At the end of the day, we are still going to be communicating with someone. We still have to know how to interact with people,” Dell'Alba said.

She often tells her employees that if they know what a customer smokes, they should also know that customer's name. “I think what we do is special, and we are very unique in the communities we serve. All of our communities are very different, and each store is very different. That banter [with customers] is amazing,” she said.

Rather than choose one or the other, Grabango's Glaser thinks retailers should do both.

“I think people working in stores should be friendly and should engage with their consumers. I want people to know my name and my brand of cigarettes. But if I am in a hurry, I want to get out as quickly as possible. They are both true,” he said.

Before entering the retail tech space, Glaser was the co-founder and former chief technology officer of Pandora, a subscription-based music streaming service. So, he has experience with tapping into the varied wants and likes of individuals.

“I am a strong believer that we are all individuals, and we all want different things. The music you play as you relax in your home is different from the music I play as I relax in my home, but we both enjoy our choices. I think that is true for shoppers as well,” he said.

“There are people who are shy and don’t want to talk to anyone. They want to go to the store, get their stuff and leave. And there are people who are extroverted and chatty and who want to talk to people while they are in the store,” he continued. “Most of us are somewhere in between. There is a range of personalities in any setting.”

The Future: Super Contactless

Where can contactless convenience go from here?

“There are many technologies that retailers are implementing such as ‘just walk out’ technologies, mobile personal shopper, as well as click and collect. But those solutions are still very expensive and without multiple locations to spread those costs across, it would be

“I think people working in stores should be friendly and should engage with their consumers. I want people to know my name and my brand of cigarettes. But if I am in a hurry, I want to get out as quickly as possible. They are both true.”

— Will Glaser, Grabango

unfeasible,” said Stephenson of Diebold Nixdorf. “We see a trend of adding several services to a single location, such as fuel+laundry+food+mail, etc. Things that will turn shoppers’ lives more and more convenient.”

He also believes “order ahead” will grow tremendously over the next several years. “Not only will customers want to be able to order their sandwich through an app, but they will also want to be able to order their drinks and snacks at the same time,” he added.

Glaser predicts contactless will move from the traditional format to what he calls “super contactless.” With traditional contactless payments, customers do not have to exchange cash or a plastic card with another person. With super contactless, that remains true, but customers also do not have to have the cashier handle their purchases, he explained.

“That’s the major step coming out of the pandemic. Moving away from handing cash back and forth was a first step forward, but now we’re not going to be handing your food back and forth either,” he said.

Henceforth, businesses will also come to better understand the benefits of digital experiences and how they can drive more personalized experiences, according to Fiserv’s Abele. "As retailers are able to engage customers digitally, they can begin to better understand preferences and purchasing patterns, and provide curated experiences for specific consumers,” he said. CSN