For all the significant developments that have been made over recent years, digital remains one of the most difficult frontiers for supermarkets to conquer. This is because the challenge is two-fold. Firstly, supermarkets have had to set up an effective eCommerce presence, which isn’t easy considering their core offering lies in Fast Moving Consumer Goods, which don’t fit naturally in the online world. Secondly, there’s an increasing need to enhance the in-store experience through digital innovation, adding convenience to customers as they go about their shopping. It’s the second of these that’s the most difficult to achieve. What needs to be digitised and how do you go about doing it?
The Online Offline
We’ve written in the past about retailers’ attempts to digitise their offline offering in an attempt to secure greater rates of customer retention and boost customer value. Marie Claire and Ocado recently teamed up to provide a digital, curated experience in a pop-up shop on Tottenham Court Road in London. The likes of Boots and McDonald’s have tried to find digital ways to increase footfall and dazzle the customers while they’re in store. And there’s increasing call for major supermarkets to digitise their loyalty cards to make it easier for customers to take advantage of rewards schemes. The old adage that you don’t leave home without your plastic card simply doesn’t hold true anymore. The only thing you do always remember is your phone.
Ironically, the latest attempt at in-store digitisation is driven by a desire to not have customers fill their pockets with an item. This month, Tesco has announced that it’s trialling Tap&Tag, a digital technology that removes the need for paper receipts by logging the information in a digital account. To use Tap&Tag, customers simply tap a Tap&Tag console at the checkout with their contactless card or NFC phone and the digital receipt is sent to the customer’s email address or app. There’s no paper to pick up from the terminal and nothing to stuff into your back pocket. It’s all paperless and all online.
The trial is currently taking place at two stores in Essex, but Tesco is hoping to roll it out much further in the coming months with an eye to similar developments in the future. It’s an acknowledgement, the company’s technical programme manager Neil McGeough explains, of a significant change in the way customers are shopping. Cumbersome wads of paper and plastic frustrate customers; why have them when the switch to digital is so intuitive for most shoppers and fairly simple for retailers?
“We are edging towards a completely paperless future when it comes to receipts and this is because digital natives just don’t like putting paper into their wallets,” McGeough told Marketing Week. “This trend will keep on growing over the next five years and wallets will become a thing of the past. Soon there will be receipts on your phone, loyalty cards on your phone and bank details on your phone.”
How can digital receipts add convenience?
It’s a logical question. After all, receipts are pushed into our pockets almost by reflex: we pay, we put the receipt and loose change away, and we go on with the rest of our day. Surely asking customers to bring out their mobile phone and go through an extensive process just to get something they used to get on a piece of paper is counter-intuitive to what supermarkets need to be doing. In short, it doesn’t really make things easier for the customer, and when things aren’t easy for the customer, there’s ample opportunity for confusion, frustration, and a loss of the very customer loyalty the technology is seeking to secure.
That’s true, but it only tells half the story. While it may be slightly less intuitive in the short-term, customers are smart and can easily adapt: using a smartphone to pick up your receipt will quickly become as natural as picking it up in paper form. What’s more, the success of online banking and other financially-based digital systems have shown that customers value having their information in one central place that can be easily accessed at any time. Such benefits far outweigh the minor negatives of having to get used to a new way of doing things.
Moreover, there’s a significant benefit to Tesco itself. Firstly, it saves money on the paper and ink required for physical receipts. This may not seem much, and certainly some of the savings will be gobbled up by the cost and maintenance of the digital machines, but store-by-store and year-by-year, it’ll add up. More significantly, Tesco reportedly loses around £8 million every year in returns from people who don’t have the receipt. Such situations are difficult to resolve, but by having a digital record of transactions, Tesco can more confidently assess which returns are truthful and which are fraudulent.
The future of digitisation
The introduction of digital receipts isn’t the only major advancement Tesco has made in digitising its in-store experience this year. During the summer, the company announced the introduction of PayQwip, an app that allows customers to pay and collect loyalty points with their phone. The app was developed by Tesco Bank, and it proved successful enough to warrant further rollout, with a spokesman from Tesco Bank calling the initial trials “very positive”. Sainsbury’s and Asda are also looking into developing their own digital payment options as they seek to offer the kind of convenience Apple Pay provides without having to surrender all-important customer data to third parties.
These are all positive signs for the digitisation of the in-store experience, but the shift isn’t a simple one and the true value won’t be seen until next year or even 2018. Tesco and its rivals aren’t just looking to build loyalty with their existing customer base, but expand it. By bringing in digitisation, they’re hoping they can make enough noise to drive more customers their way, showing that they can deliver greater value through greater convenience. No longer will those points go unearned or unspent because you’ve forgotten your card. Just use your phone, and you’re getting the value you’re lacking elsewhere.
The winner of this battle will be the one that makes digital convenience most convenient and least disruptive. It’s a delicate balancing act, but thanks to its introduction of digital receipts, Tesco just about has the advantage at the moment.
What do you think of digital receipts and supermarkets’ increasing move to digitisation? Let us know in the comments section or get in touch with us on social media.