Tesco is trialling new “shop and go” technology that allows customers to scan and pay for their groceries on their smartphone and then walk out of the store without visiting a till.
The retailer is using staff at its Welwyn Garden City headquarters as guinea pigs for the service in a purpose-built Express convenience store on the site. Tesco has installed the app, Scan Pay Go, on the mobiles of 100 staff who are able to use it to scan barcodes and then pay for their shopping.
Traditional bricks-and-mortar retailers are investing in new technology as they try to keep pace with online rival Amazon, which opened an automated convenience store in the US earlier this year. The Co-op has already introduced pay-in-the aisle technology, while Sainsbury’s tested a similar app in 2017.
The Tesco chief executive, Dave Lewis, said the technology could be rolled out across the supermarket chain but there were important aspects to consider, including whether people would simply walk out without paying.
“The technology exists to do it but does the customer behaviour support it?” said Lewis. “If the margin is 2%-3% you don’t need to lose very much to make it unprofitable.”
While these initiatives could spell the beginning of the end for the supermarket checkout – fuelling fears that automation could eventually eliminate millions of retail jobs – they are seen to be attractive to the time-pressed shoppers who frequent busy city centre stores.
“In our stores in central London, Manchester and Birmingham, lunchtime queues are a problem,” said Lewis. “Anything we can do to speed that up will be a benefit for customers.”
The Express store is also being used to test how shoppers cope in what is fast becoming a cashless world. Debit card payments have now overtaken cash as the most popular form of transaction in the UK for the first time, according to recent banking industry figures.
Consumers used their debit cards 13.2bn times last year, up 14% compared with 2016, according to a report by UK Finance, the trade body for the UK banking and financial services sector. The number of cash transactions fell by 15% to 13.1bn in the same period.
The checkouts in the Welwyn store only accept cards or other forms of digital payments. Cutting out a visit to the till means Tesco can halve the time it takes for a customer to pay and leave the store to just 45 seconds.
Steve Blair, the retailer’s convenience transformation director, said the cashless trial was a response to changing shopper behaviour as in some stores more than 80% were paying by card.
Blair said the retailer was reinvigorating its Express chain with several initiatives designed to make the stores more appealing. “The Express environment hadn’t been refreshed for some time,” he said.
Tesco has started playing background music in 30 stores with playlists tailored to the age profile of each outlet’s shoppers. It has also introduced juice bars, which vie with bananas as the best-selling product in the revamped stores.
The removal of cash would also make the 1,800 Tesco Express stores less attractive to criminals. “There are a significant amount of robberies in Express stores every week,” said Blair.
