Walmart's Mobile Payment Test: Checking Out 'Scan and Go'
So what's Walmart up to with its mobile checkout test run?
According to The Wall Street Journal, Walmart (WMT) is giving its new Scan and Go system a trial in one if its Bentonville, Ark., supercenters. Customers will be able to scan items with their smartphones as they shop, then pay quickly at special kiosks, thereby skipping the checkout line. What the new system conspicuously fails to do is allow shoppers to pay with their mobile devices.
The apparently tentative move might seem like a half-hearted approach to what is arguably the biggest change brewing in how Americans shop. But when it comes to how the nation's largest merchant goes about its business, attention must be paid to all the details: This pilot program could be less about making it easier for shoppers to pay, and more about getting you to spend more.
Mobile Payment Mania
For its part, Walmart is being tight-lipped about the test. "We are continually testing new and innovative ways to serve customers and enhance the shopping experience," Ravi Jariwala, a company spokesman, tells DailyFinance. "At this point, we don't have anything specific to share on that testing."
Whatever its motivation, Walmart is taking a decidedly more measured approach to mobile checkout than its retail brethren.
Apple (AAPL), a mobile-payment pioneer, launched EasyPay last year, which allows customers at its Apple Stores to complete purchases on their smartphones without the help of a store employee. Even before that, those stores were largely cashier-less: Employees check out shoppers with handheld card readers so they don't have to wait in lines.
Meanwhile, J.C. Penney (JCP) set plans in July to eliminate cashiers, cash registers and checkout counters, replacing them with a smorgasbord of solutions, such as WiFi networks, mobile checkout, RFID (radio frequency identification) technology tracking systems for merchandise, and self-checkout options.
Beyond single company advances, a battle is being waged for consumers' digital wallets, with apps that enable shoppers to leave their cash and credit cards at home, and use their smart phones to pay for purchases.
Although new mobile payment options keep on popping up, retailers have yet to adopt a universal platform, though MCX, a new mega-retailer backed mobile payment network, is taking a shot at it.
New Way to Sell More Merchandise?
So why would Walmart invest in a technology that doesn't enable shoppers to seal the shopping deal and actually pay for their purchases themselves?
By having shoppers scan items, Walmart knows "what consumers [will purchase] even before they've purchased it," which grants the retailer not only a good read on changing consumer purchasing habits, but an opportunity to up-sell shoppers in real time, Taft tells DailyFinance.
So if you scan a box of sugar cones at the Bentonville Walmart store, the retailer has an on-the-spot shot at getting your ice cream dollars, too, by offering you, say, a Breyers coupon, for example.
With Scan and Go, "they can change my purchasing decision right there on the spot, which has never been done before in the history of retail in a brick-and-mortar store," Taft says.
While these types of instant offers based on purchasing behavior are commonplace online -- think of Amazon (AMZN), where after you add items to your cart, a list of other complimentary products that might interest you pops up -- they've eluded physical stores.
And as online retail siphons market share from brick-and-mortar stores, merchants are trying to "figure out ways to leverage technology to compete, by offering online shopping like advantages," Taft says.