Frictionless checkout – is it the new omnichannel?
If you’ve been in retail as many years as I have, you’ll no doubt remember the time that omnichannel solutions first hit the collective consciousness of our industry. Retailers had long understood the need for diverse shopping channels, but in 2010 there was a lightbulb moment when they realised that simply having multiple routes to market wasn’t enough – those channels had to be integrated. So they harnessed the power of technology to develop online/offline integration, for a single, seamless retail experience.
Now, more than 10 years on, why do I say that frictionless checkout is the ‘new omnichannel’? Well, from my discussions with retailers, I can see that there has been a similar lightbulb realisation about frictionless checkout. Retailers have realised the impact of friction and how it can impact growth. They’re focussing their efforts on removing it, using technology as their primary enabler.
What is ‘friction’ in shopping and why does it matter?
Friction is, simply put, anything that causes frustration to customers, or causes the sale to be lost altogether. It can be a small delay or ‘snag’, a few extra keystrokes, or an extra step or two in a process. It detracts from the customer experience.
What shoppers perceive as friction is relative – they see something as friction if they know there is an easier alternative.
For example, a few years ago, having to insert a credit card and enter a PIN wouldn’t have been seen as friction. It was simply the norm (and a lot easier than the previous requirement to provide a signature). But now that contactless payments are so widely used, inserting a card becomes friction.
For retailers, this means that the sleeker their competitors’ checkout process, the more ‘frictionfull’ their own appears.
The advent of the Amazon Go smart store, with its cashier-less ‘Just Walk Out’ technology, will no doubt bring about another change in what shoppers perceive as friction. Amazon Go eliminates checkout altogether, using cameras, shelf sensors, computer vision techniques and deep learning. As more stores emulate Amazon, any form of checkout may come to be seen as friction.
Friction matters because it restricts growth. It leads to lost sales, a negative customer experience, and reduced loyalty and repeat visits.
What causes friction and how can retailers eliminate it?
Online, friction can be measured by abandoned carts – shoppers choosing items, but not buying. According to The Baymard Institute, the average cart abandonment rate across retail categories is 69.8%.
If we look at the causes of cart abandonment, we can see where the friction occurs and therefor what retailers can do to reduce it.
The top causes of friction online are:
In addition, research from Sleeknote tells us that abandonment rates are highest on phones, followed by tablets and lowest on computers. The smaller the screen, the greater the friction. Given that phones are the fastest growing device for online sales, this presents a missed conversion opportunity.
So for retailers wanting to minimise friction and maximise sales, the message is to ensure they have ecommerce solutions that allow them to optimise their site for smartphones, enable guest checkout and offer one-click payments. They need to ensure they show all costs upfront, and need flawless inventory management to optimise delivery times.
In store, whilst it’s less likely that the shopper at the checkout will literally abandon their cart and walk out, the dissatisfaction caused by friction is just as real and just as damaging. Shoppers are less likely to return, won’t increase their basket size and may well tell others about their unsatisfactory customer experience.
The causes of friction in store are things that slow down the checkout – like queues and slow payment methods. Customers also feel friction if the items they want to buy are out of stock. They expect online/offline integration through BOPIS, click and collect or curbside pickup – nowadays, not being offered these options is ‘friction’.
To create frictionless brick and mortar retail experiences, retailers therefore need to consider queue-busting techniques such as in-aisle mobile pos(mPOS) checkout, self-checkout and contactless payments. Inventory visibility and stock management will reduce out-of-stock friction, and smart ecommerce solutions for online/offline integration will enable them to deliver the hybrid shopping methods that customers demand.
Online or in store, friction is one of the biggest inhibitors to retail growth. Understanding what causes it, and designing a frictionless retail experience is to the 2020s what omnichannel solutions were to retail in the 2010s.
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