How To Balance Customer Experience With Loss Prevention In a Mobile Payment World?

What looked like a faraway future, is the reality in a growing number of stores. Especially China’s smartphone owners are way ahead of everyone else when it comes to in-store mobile payments. In total, 195 million people already used their phones as a wallet at the end of 2016, says eMarketer, with popular apps like WeChat, Alipay and Apple Pay.

However, all these apps still require customers to go to checkout or at least search for a store associate to fulfil the payment step. Looking at the recent acceleration and explosion of new mobile applications, I strongly believe though that the future lies with mobile payment apps that make the shopper completely independent in their store experience, including selecting their favourite items, sharing styles with their social network and of course mobile payment.

Letting customers pay with their phone is a necessary step towards really putting the customer first

At first sight, getting rid of the traditional “point-of-sale stations” has tremendous advantages for the shopper and the retailer. In general, the three main drivers are:

1. Putting the customer first: No more waiting in line, but give customers a true ‘shop & go’ experience.
2. Free store associates: Store associates are not fixed behind a check-out counter, but can move around freely to help customers or refill empty shelves.
3.  More sales space: The reduction of the point-of-sale area frees up additional space where merchandise can be displayed.

While primarily the Retail and Marketing departments start embracing the new mobile payment solutions, the Loss Prevention managers that I work with are quite concerned, because they wonder how they can make sure that the shrinkage levels do not explode. How do they know if the items that a customer takes outside have actually been paid for? And how can mobile payment solutions be combined with any existing security measures?

RFID solves the conflict between security and mobile payment solutions

While RFID is most famous for its great added value in optimizing a retailer’s stock accuracy, the technology can also be the missing piece in the mobile payment puzzle. Simply because with RFID, retailers know exactly which item has been paid for. This information can be shared with the EAS systems at the store exit in order to trigger an alarm on those items that are leaving the store unsold.

You might wonder why this is not possible with traditional EAS solutions. The foremost reason is that the RFID chip on the merchandise is not destroyed or removed, which would require hardware and/or interaction with store staff. Instead, the RFID chip is (de-)activated by registering the item’s status in a cloud database. After the mobile payment is completed, immediately, the status of the item is changed to ‘paid’ in the cloud database and this information is also available for the EAS systems.

RFID business expert

Tom Vieweger

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