The Evolution of the Customer Checkout Experience

All businesses need to accept payments from their customers; however, the form of those payments has changed over the years. Credit cards have replaced a substantial percentage of cash transactions, and smartphone-enabled digital wallets are slowly replacing credit cards, even for in-store purchases.We review the evolution of the customer checkout experience below with an eye toward where it’s headed.

The Pre-Electronic Era

Phase 1

Accepting Cash

In 1995, 60% of shoppers used cash exclusively for purchases.

Phase 2

Accepting Checks

In 1998, 87% of all U.S. households had checking accounts.

By 2002, there were 42.5 billion check transactions for every 15 billion credit and charge card transactions.

The Rise of Swiping & Digital Payments

Phase 3

Accepting Debit & Credit Cards

Learn more at http://merchantwarehouse.com/credit-card-processing

Only 2% and 8% of shoppers used debit and credit cards, respectively, in 1995.

By 2003, 31% of shoppers used debit cards, and another 21% used credit cards.

Phase 4

Accepting Gift Cards & Loyalty Programs

In 2006, shoppers purchased $80 billion worth of gift cards, and 2/3 of consumers planned to give one to someone.

Phase 5

Accepting EMV/NFC/Mobile Payments

Now, retailers can embed promo codes into their NFC processors that are redeemed automatically when shoppers check-out using their NFC enabled devices, including:DiscountsRebatesCouponsGift CertificatesFree Delivery

Advertising these promotions throughout the store will encourage shoppers to buy with their mobile devices.

NFC-enabled, in-store mobile payments are expected to rise to $180 billion by 2017.

The number of phones with NFC capabilities will rise to 45% by 2016.

Learn more at http://merchantwarehouse.com/mobile-payments

Looking Ahead

Mobile Point of Sale

Every employee is a potential cashier. Apple is the biggest and most prominent retailer currently utilizing the technology. More than 6,000 Nordstrom salespeople use mobile phones to make customer transactions.

Self-Checkout

In a growing number of stores, consumers can now make purchases on their own anywhere in the store as soon as they are ready to pay, reducing line congestion and eliminating sales friction. USA Today reported JC Penney hopes to eliminate cash registers entirely by 2014.

The customer checkout experience has continuously evolved to provide greater convenience less friction, and a more enjoyable time in the store. Mobile point-of-sale and self-checkout capabilities are poised to lead the shopping revolution in a store near you!

Sources:Merchant WarehouseCheck Payment Systems AssociationNew York TimesEntrepreneur.comUSA Today

Learn more at http://merchantwarehouse.com