When Walmart rolled out its mobile Check Out with Me program last week, it made a meaningful first step toward the retail nirvana of full in-aisle mobile checkout.
Some quick background: For more than a decade now, ever since mobile applications were first taken seriously in retail, the ultimate goal has been to do away with checkout lanes and have all purchases paid either as you go (think loading items into smart carts that total prices or purchasing through the shopper’s own mobile device) or all at once but through a mobile-armed associate in whatever aisle the shopper’s last item was grabbed.
Many chains have toyed with this concept — JCPenney gave it an enthusiastic go before abandoning it — but Walmart is making an aggressive play at working it out permanently.
To be fair, what Walmart announced is much less than a full chain rollout but still much more than the typical trial. In a phone interview with Computerworld, Walmart corporate communications director Justin Rushing characterized it as a “small test, in just more than 350 stores.” Only the world’s largest retailer, with annual revenue north of $500 billion and almost 5,400 stores worldwide, could dub a 350-store rollout a “small test.”
The trials were “rolled out over the first two weeks of April,” Rushing said, and are in “about a dozen states” concentrated in the southern U.S., including Florida, Texas, South Carolina, Virginia, Alabama, Georgia, North Carolina, Illinois, Missouri and, of course, Walmart’s headquarters state, Arkansas. He added that Walmart won’t say exactly how many states it is running the trial in because “we haven’t released the full list at this time.” That’s sort of like explaining why certain information isn’t being revealed by saying, “We don’t want to.” All of that said, it is still a very major commitment.
The trial is limited to a segment of Walmart’s business that has always stressed point-of-sale efforts: its lawn-and-garden centers. That area is challenging because the items sold there are often very large and bulky (consider a 14-pound bag of soil) and shoppers are already outside, typically near their car. That means that they have to lug the bulky item into the store, wait in line to pay, then pay and drag it back outside to their car.
With this trial program, associates use a mobile device with a card swipe — devices that Walmart purchased explicitly for this trial, according to Rushing — to charge shoppers right there in the outside garden area.
There is a fraud issue. Even though Walmart has upgraded all of its stores to accept EMV, these new devices can’t accept EMV, which means the trial is limited to magstripe. That opens the door to cloned card fraud, something that EMV systems are, overwhelmingly, not vulnerable to. (Here’s one example of a recent exception.)
As for why this trial isn’t supporting EMV, Rushing emailed this clarification: “We’re currently pursuing EMV certification on the new devices. We’ll look to add the functionality after certification is complete.”
But Rushing said that the chain isn’t very concerned about thieves using this as a good place to use soon-to-be-extinct cloned payment cards. “This is a convenience play more than an LP [loss prevention] play,” Rushing said.
It’s also a very clever play. First, other than the EMV problem, there is little in the way of security or functionality that can go wrong. Assuming the chain thoroughly tested the device’s ability to handle swiped cards (this is Walmart we’re talking about; it did), the payments should work as easily as inside the store.
Actually, it will be faster because EMV is glacially slow compared with magstripe, but that’s another column. My point: Some shoppers might prefer to use the faster access — and avoid long lines — by trying to do all their checkout in the garden section. There will be logistical problems with that (shoppers shouldn’t be able to leave the store with unpaid items without setting off some alarm, even if they are just walking into the outside garden area) and it’s unlikely the garden associates are going to be inclined to ring up full shopping carts of stuff.
But the idea that shoppers would want to do that says everything about how much better in-aisle mobile checkout is. Not to mention the fact that, eventually, it will free up a lot of store real estate that can be better used for merchandising and item display. In short, mobile in-aisle checkout could make the typical 105,000-square-foot Walmart store far more profitable, on a revenue-per-square-foot basis. Put another way, the chain could squeeze a lot more product into even the smallest Walmart stores (about 30,000 square feet).
More profit, more revenue, more convenience and happier customers. Walmart says this trial will be expanded based on shopper feedback. I’m willing to bet that the feedback will be favorable. The question is: How comfortable will Walmart be with such a radical change such as moving all payments in-aisle?