Moving Beyond Cash or Credit

How consumers want to pay for their purchases has changed dramatically

By Melissa Kress

TEN YEARS AGO, Google gave the world a sneak peek at its newest feature, Google Wallet. When unveiling the innovation in May 2011, the company explained that the app would transform a phone into a wallet and would present merchants with an opportunity to strengthen customer relationships by offering a faster, easier shopping experience.

At the time, many wondered if the convenience channel would embrace mobile wallets. And even more importantly, some wondered whether consumers would embrace them.

Considering the uncertainty of a decade ago, it’s amazing to see where payment options are now.

How consumers can pay — and want to pay — for their purchases has changed dramatically, partially driven by the COVID-19 pandemic and partially driven by consumers' quick adoption of new technologies. Retailers are eager to meet today’s high expectations.

Take Amazon, for example. The traditional e-commerce retailer entered the brick-andmortar space and debuted its ”just walk in and walk out” technology at its first Amazon Go store in early 2018. The Amazon Go concept relies on cameras and sensors to track what shoppers remove from shelves and what they put back. Customers are billed after leaving the store using credit cards on file.

C-store retailers initially were nervous about Amazon Go, but then began rolling out similar frictionless checkout options at their stores. However now, just as the convenience channel catches up on frictionless systems, Amazon is at it again. This spring, the company began rolling out Amazon One to select Whole Foods Market stores. This new contactless technology allows customers to shop and pay using just their palm.

Talk to the Hand

Can we expect the convenience channel to follow suit? The answer is: maybe.

“I think it is our duty as retailers, particularly as convenience retailers, to bring our customers what they want. That means giving the customer what they want in payment options, product mix, and in removing friction and ensuring their transaction experience with us is as convenient

as possible,” said Jeremie Myhren, chief information officer at Road Ranger LLC, a Schaumburg, Ill.-based chain of travel centers, truck stops and convenience stores primarily in the Midwest.

When considering which payment options to offer, he believes c-store operators must stop and remind themselves of this ethos, and ask questions such as: Is this what the customer wants? Will this give the customer a more convenient experience?

While some in the industry may be concerned about what Amazon is going to offer next, Mike Wilson, chief operating officer at Omaha, Neb.-based Cubby's, is not one of them.

“I really never got nervous about Amazon, like many other retailers. In this business, someone is always going to come up with new gadgets or technology. You have to focus on what you do well, and make it as easy on both your customers and employees,” he said.

Wilson thinks palm payment may pop up somewhere in the convenience channel. “I am sure someone out there may try it, but currently I believe this is going too far. I think you have half of the population who would never use this type of technology,” he noted. ”Just consider the current environment now; there are people out there who believe that the vaccines can track you. Imagine attempting to get those folks to utilize palm payment.”

That being said, Wilson acknowledges that environments change and maybe one day, it would be accepted. But it is not something currently on Cubby’s radar.

The key priority for c-stores, according to Nick East, CEO and co-founder of Zynstra, an NCR company, is to deliver a better customer experience at a lower cost.

“The need for change and a move toward a more frictionless forecourt experience is driven by the clear changes we see in consumer behavior.

— Deb Hall Lefevre, Alimentation Couche-Tard Inc.

“While biometric checkout helps to replace forgettable passwords and makes payments potentially faster and more convenient, c-stores have to have the right infrastructure to deliver this type of offering quickly, and payments are only part of the value chain,” East explained.

“We are seeing significant adoption of self-serve and assisted checkout technologies coupled with a variety of payment methods, such as digital wallets and c-stores’ own mobile app payments, for rapid checkout,” he continued. ”Although device-based, these forms of payment have been very successful and have accelerated rapidly in c-stores since the pandemic.”

In the Driver's Seat

There is more to payment innovation than biometric technology.

In April, Alimentation Couche-Tard Inc. introduced Pay by Plate in Sweden and plans to expand it across its Circle K network. The international retailer piloted the technology at select Circle K stores in Norway before bringing it to Sweden this spring.

Pay by Plate enables Circle K customers to pay for fuel using sign recognition and a mobile app. It marks a key step in Circle K's journey toward enhancing its forecourt offering and ensuring it meets the future needs of customers, according to the company.

“At Circle K, we know the forecourt of today is not the forecourt of tomorrow and we are committed to evolving the forecourt experience for our customers through innovation,” Deb Hall Lefevre, chief information officer for Laval, Quebec-based Couche-Tard, said in a statement. ”The need for change and a move toward a more frictionless forecourt experience is driven by the clear changes we see in consumer behavior.

“As market leaders, we feel it is our responsibility to continue pushing forward the development of the forecourt and convenience retail space, and ensure we are adapting today to meet the future needs of our customers,” she added.

Similarly, Alltown, part of the Waltham, Mass.-based Global Partners LP family of brands, teamed up with PayByCar Inc. to roll out an in-car, touchless payment service across its 30 gas-station locations in Massachusetts earlier this year. Alltown began testing the PayByCar technology in mid-2019.

Drivers with E-ZPass transponders can register for PayByCar online and then use their transponders to pay for gas and other goods at Alltown locations without having to touch the gas station keypad or take out cash, a credit card or mobile app. Vehicles without E-ZPass transponders can enroll and pay with PayByCar's own non-toll sticker.

Variety Is Best

As East noted, the pandemic has accelerated the adoption of new self-checkout and touchless checkout options available to consumers. He pointed to mobile app payment; buy online, pick up curbside; buy online, pick up in-store; self-checkout; and assisted checkout as options that are proving very successful already.

“The absolute key is not to alienate sections of your existing customer base. All new checkout technologies currently have to co-exist alongside traditional pointof-sale; thus, a variety of checkout options is best,” he advised.

Retailers must know their customer base, and recognize that geographic location can make a big difference in technology adoption rates.

Cubby's operates 36 convenience stores in Iowa, Nebraska and South Dakota — mostly in rural areas where customers will likely not be so willing to adopt out-of-the-box contactless experiences like pay-by-palm technology, according to Wilson.

“If implemented throughout the country, it will probably have a better usage rate in large urban cities, but it will be extremely difficult to implement in many suburbs and rural areas,” he said. “Most of our stores are in rural areas and the customer base would revolt.”

Road Ranger’s Myhren is a proponent of striking a balance.

“While I tend to agree with some of the criticism lobbed on our industry as being slow to innovate in the past, I think we need to strike a balance between the upside of innovative curiosity and the downside of jeopardizing our core customer value proposition and promise: convenience,” he said.

The ideal place for a c-store retailer to be, Myhren maintains, is having a culture and platform in place that enables the operator to be a fast follower.

“Our customer doesn't look to us to show them the future, so long as we keep convenience at the center of our offer and we don't lag too far behind,” the technology veteran said. “So, with all that in mind, let Amazon test the market appetite for biometric payment and identification, and let's watch very closely. If it becomes apparent this is indeed what the customer wants, I think we need to honor that and get to work on it.” CSN