Wearables for retail payments?

Wearable technology is set to become an everyday part of retail on the shelves, on the shop floor, in the stock room and in the back office.

In just a handful of years, wearable technology has moved right into the mainstream. Who

Wearables to shape the future of mobile payments?

would have thought five years ago that pensioners, for instance, would be casually walking around with fitness monitoring devices on their wrists?

Now we can see that devices such as Fitbit and Vivosmart have become the kind of items commonly bought as family presents. The evidence is before us: one of the country’s biggest chains – Lloydspharmacy – found such devices flew off the shelves in the Christmas rush, their educated hunch paying off handsomely at the till.

This is significant because the acceptance of fitness and wellbeing devices will make more consumers open to the idea of wearables as everyday gadgets – writes Richard Cottrell, managing director of Vista Retail Support.

In retail, the rapid evolution of wearable technology now has many implications, most immediately in the payment sector, given the launch this month of Apple Pay.

The arrival of this system, linked to the high-profile Apple Watch, is likely to shift many consumers away from their chip-and-pin payment cards when making smaller purchases.

Retailers wondering whether they should facilitate payments via wristbands and smartwatches should consider how Apple already has millions of customers in this country, very many of whom will be keen to use this new payment method.

And soon we will see the arrival in this market of Samsung’s wristband, using flexible LED technology to produce a physically resilient product that is both smartphone and payment device.

A further driver towards wearables is likely to come from the banks’ increasing use of biometric technology for customer identification – especially blood vessel recognition. Indeed, given Apple’s acquisition of biometric businesses, it is expected they will add new payment authentication methods to their devices, alongside the current fingerprint recognition technology.

From a retailer’s perspective, allowing customers to pay through wearable technology is always going to be about return on investment.  For some, the £30 payment limit that comes into force in the autumn, will be too low to make it worthwhile.

However, if they are in an urban location with plenty of iPhone users and smartwatch wearers, they should certainly consider it. The speed and convenience of paying with a quick swipe of a device will attract more customers and bring a quick return on investment.

And stepping into the arena is not as daunting as it may appear. If a retailer already has pin entry devices (PEDs) that are able to take contactless payments, then they can take payment from Apple Watch and some of the other smartwatch payment systems that are in the pipeline.

It is not all about speed, either. Enabling payments via wearables also gives a retailer a loyalty advantage. Customers can be enticed to sign up to loyalty programmes and build up credits that can easily be monitored and redeemed through a wristband, or smartwatch.

Retailers have a great opportunity here to take the initiative and engage with queueing customers so they feel more at ease using their wearables to make payments. If customers also sign up to loyalty programmes, the retailer has access to profile data, which they can use for marketing purposes.

Yet for store operators, wearable technology is about far more than just wristbands and smartwatches. Retailers should be thinking about how it can bring efficiency to their operations. In particular, through the use of augmented reality via Google Glass-type devices. These can, for instance, be used as tools to guide staff on what is required in terms of store layout and presentation, allowing head office to see what is being done and to offer advice in real time, without the need to send personnel or to organise training courses.

The same technology can be adapted to bring a big boost to customer service. Staff equipped with a headset can see down aisles and pull up real-time product availability information in front of their eyes. Without having to leave customers, they can let them know precisely where products are, whether they are in the stock room or will shortly be delivered.

And as more retailers operate click & collect, this visual display technology will enable in-store staff to complete an order much more quickly, picking up the location of products through tiny radio tags. Not only will it save staff time, it will also alert them when the stock of individual items is running low and shelves need replenishing.  As a result of such increased efficiency, the click & collect experience for the customer should be smoother than ever, free of embarrassing delays or incomplete orders.

Seen in three dimensions, then, wearable technology is likely to become an everyday part of retail, both on the shelves, on the shop floor, in the stock room, back office and even at headquarters.

And as designers make wristbands and smartwatches more attractive and add more functions, these devices are going to overlap into many spheres – health, sport, business technology and jewellery – giving all types of retailers a major opportunity to offer them.

For many store operators, the extent to which they quickly adapt to the world of wearable technology, is going to be one measure of success.

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