Dec 20 2018

Interiors industry in search of new payment systems

Mobile payment, self-checkout and contact-free payment are no longer a big deal from a technological perspective. However, the diversity of solutions and the habits of consumers make change difficult.

The furniture has been chosen, the customer strolls satisfied to the cashier, but is horrified to see that a long line has formed. The long faces show that some of the buyers are suddenly no longer satisfied with the shopping experience at all.

Of course payment has to be made, but are there really no better solutions than the existing payment and cashier systems? The electronics dealer Saturn in Hamburg, for example, has already made a start: customers pay directly at the shelf with an app, and then only need to have the products unlocked.

The fact is, companies from various industries are searching desperately for alternatives. More than a million cashiers are currently in use in German commerce. Eighty-six percent of all companies in the German-speaking world want, or in fact need to convert their cashier systems within the next two or three years, a survey of the EHI Retail Institute suggests.

This is not only because of obsolete hardware and software, but is especially due to the most recent technological developments and the demands of consumers. Waiting at the cashier is one of the greatest annoyances for customers and is a very serious disadvantage of the stationary trade in comparison to e-commerce, where the payment procedure ideally requires only a few clicks of the mouse. This also effects furniture stores in particular.

The market is highly fragmented at present

The catch: there is no lack of ideas or solutions, but only very few of them have actually proven themselves in practice. For example, Apple had to delay the start of Apple Pay in Germany several times; Mercedes Pay and Paydirekt can't get their feet off the ground; various wallet solutions of major corporations like Vodafone or Telekom have failed.

The market for new payment solutions is as fragmented as it is poorly structured; there are nearly daily reports of failed and new payment offerings for the trade. Only recently, H&M joined with the payment specialists Klarna, which also cooperates with Ikea, amongst others. The problem: even enormous investments in technology and marketing don't guarantee that the solution will succeed on the market, meaning be accepted by customers.

Even self-checkout and self-scanning have difficulties: on the one hand, independent scanning and payment is not for everyone, while on the other hand, special items, for example, those subject to laws for the protection of minors, really do require the deployment of staff.

Ikea is one of the few companies that use self-service cashiers in a big way. However, things don't function entirely smoothly even at the Swedish furniture store, although customers are traditionally familiar with the DIY aspect: staff are always needed to provide assistance with scanning and payment.

Yet, the technological course has already long been set for new payment systems: with an app or saved card, the smartphone can be used like a wallet, or a card enables quick and contact-free payment, thanks to NFC technology. Why can't new payment variants like mobile payment still not assert themselves? The main reason is the diversity of the offering: neither traders nor consumers know which system they should choose.

Island solutions instead of broadly accepted standards make the matter complicated. While comfort has the highest priority for consumers, the trade is more interested in other criteria – besides running costs and investment security, the linking of the cashier with the warehousing systems, integration into existing structures and the possibility of incorporating customer cards at the POS. Ideally, multi-channel-compatible ERP systems that fulfil all requirements should be established, including the cashier system.

Cultural differences

Another hurdle: the cultural differences when it comes to payment are big. While in Germany and Austria, for example, a shopping trip without cash is still inconceivable for the majority, cash is an endangered species in the United Kingdom or in Sweden, for example – customers there are used to paying with an app or a card. However, habits are changing everywhere, and faster than some companies are able to keep up with the conversion of their cashier systems.

Here there are in fact radical and promising approaches, for example, mobile payment systems as a supplement to or replacement of the traditional cashier. Customers can pay anywhere, and the bothersome waiting in line is dispensed with. Or the solution of Rapitag, with which customers can remove security seals themselves following payment. In contrast, the Amazon store in Seattle, at which the purchase is recorded and billed by cameras, is hardly an option in Europe for data protection reasons.

And the search for new systems doesn't end in the store: one example is the Inhofer furniture store, which cooperates with Wirecard for its own payment system. Customers pay an instalment for the chosen furniture when making the purchase on location, and the rest is paid upon acceptance of the delivery with credit or Maestro card. Suppliers use an app and mobile devices for this. This underlines the multi-channel strategy of the provider, and customers are ultimately only interested in comfort and security.

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