Here is another challenge – and an opportunity: Cashless retail.
Cash is slow, dirty and expensive to maintain (the U.S. spends $200 billion each year to keep cash in circulation).
Other countries are way ahead of the US. Sweden, Denmark, and South Korea have been rapidly shifting toward becoming cashless societies as mobile phone payments or plastic take its place.
And here in the US, those retailers and restaurants that have cash-only policies tend to annoy consumers who visit the ATM less frequently.
Cashless is not without other downsides:
- A loss of anonymity because cash allows consumers to make transactions without a paper trail.
- Stores that refuse cash may be effectively shutting out many lower-income customers. About one out of 13 U.S. households are unbanked, which means they have don’t traditional banking accounts, such as checking or savings accounts. Such families tend to be lower-income and rely on cash to make their purchases.
That said, increasing numbers of US restaurants and retailers are now moving towards a cash-free existence.
Walmart just took another step toward going completely cashless in its stores, in many cases using its mobile app. While customers will still have to come into the store to pick up prescriptions and verify payments made through money services, express lanes will be set up, reducing wait times to as little as 40 seconds compared to 6 to 11 minutes, Walmart estimates. The app and express lanes should be in all 4,700 U.S. stores by the fall. Walmart is also testing its scan-and-go technology at three stores. Scan and go allows customers to scan items while shopping and pay through the app, so they only have to stop once at the door to have receipts and purchases checked.
In 2017, Sweetgreen will go fully cashless in nearly all of its 64 stores for these reasons:
- Cash-free stores reduce the likelihood of robbery, keeping employees safe.
- The company can avoid the expense of transferring cash in armored cars.
- Sweetgreen won’t have to worry about the bad hygiene of employees handling cash and then touching food.
- Managers, who are often responsible for counting cash, will have more time to do other things, like mentor and train staff.
- Getting rid of cash can speed up transactions (5% to 15% more transactions every hour), alleviating Sweetgreen’s peak lunch lines, which often spill out the front door and onto the sidewalk.
- Sweetgreen can introduce a new wave of technology to make its stores more efficient and personal.
Nine years ago cash was 40% of its tender. Now, all stores are between 10% and 15%. As such, customers largely didn’t care whether Sweetgreen accepted cash or not. Over half of the people on Sweetgreen’s app are using it to order their meals ahead of time. Sweetgreen will introduce group ordering, notification alerts, and more personalized touches via iterative updates. They envision a future app recommending salads in much the same way that Netflix suggests movies. And maybe one day they will have the ability to offer custom orders.
Domino’s Pizza launched a “zero-clicks” pizza ordering app earlier this year. It has also enabled ordering into Facebook Messenger, Twitter, Siri, Amazon’s Echo, and Google’s Assistant.
And then there is Amazon, who is experimenting with a grocery store where customers can take what they like and leave without even stopping at a cash register. Store cameras survey the customers’ purchases and charge their accounts as they exit.
Retailers: When there is so much to gain – and when Walmart and Amazon both get behind the same trend – be prepared to follow.