SPONSORED: In the years after Mobilepay’s interception, banks and telecoms are spending amounts in the millions on the first big mobile payment war. However, in the battle, the focus on how the solution is supposed to work in the intersection between customer and store got lost. Salling Groups wants to change that.

This article is also available in Danish. You can read it here.

Even though Mobilepay won the consumers’ hearts a long time ago, the service still hasn’t got its big breakthrough as a payment method when users do their daily grocery shopping. For the majority of the times credit cards win – because they are convenient and we got used to them.

Salling Group understood this lack of support for new mobile payment solutions several years ago and removed them from their stores.

“The many takes on mobile payment solutions we saw were, first and foremost, made for peer to peer payment – the same thing you could do in your online bank – and weren’t working properly for shopping in supermarkets. They were complicated and costly intermediaries, which didn’t offer enough added value. And, at the same time, they weren’t compatible with some of the cash registers of stores”, says Kim Vindberg-Larsen, Head of Mobile Services (?) in Salling Group.

In the competition for customers, Apple was quick to come up with new alternatives. But ApplePay is also using existing terminals, which Apple thinks is preferable because it keeps costs low for merchants.

“Of course, we are following user adoption closely, but we also think ApplePay has some fundamental challenges – like all other competing solutions. And I don’t just mean increased transaction costs, but also its inflexibility when implementing it to your own solutions”, Vindberg-Larsen explains.

For these reasons, Salling Group’s digital team has developed its own solution from the bottom up called “Scan&Go”, which has focused on customer experience, shopping flow and store workers’ daily routines from the get-go. The first pilot test of Scan&Go has now been launched in five Netto stores in Aarhus.

During the pilot, “Scan&Go” can be tried in five Netto stores in Aarhus – on Finderupvej, Søren Frichs Vej, Skovvejen, VeriCentret and Nordre Strandvej.

Shopping superpower for the smartphone

During the exploratory phase, Salling Group was looking, among other things, at Amazon Go, which has developed a system with an army of video cameras and artificial intelligence to follow and figure out what customers buy, and automatically withdraws the money from them once they leave the store.

Though this approach may sound appealing, Salling Group realised that this was not their way to go. First of all, setting up a dedicated data centre for each and every supermarket would be vastly expensive. Second, establishing video surveillance for a complete Bilka hypermarket would demand so many cameras that the roof would most likely need to be reinforced.

“We declined to follow Amazon’s example, but we’ve made something with the same purpose: to digitalise the shopping experience in the physical store in a way that’s simple but still improves the experience for customers and stores alike. With our very limited resources we’ve managed to meet some of the biggest challenges facing our industry while never losing focus on keeping our enterprise profitable”, Vindberg-Larsen adds.

Naturally, the new self-service app is meant to be used on smartphones, but Salling Group has consistently stressed that it is more than just a digital version of the credit card.

“The app supports the whole shopping experience in stores. You scan the goods with the phone, put them in your basket, and once you’re done, you pay directly via the phone and leave the store without having to be expedited by the cashier”, Vindberg-Larsen points out.

The test stores are equipped to support the Scan&Go app. Among other things, this means that app users simply have their smartphones scanned after the goods are paid and don’t have to stand in line for the cashier.

Flexible features for self-service

Even though the solution is just in pilot testing, the development team from Salling Group is already working on expanding the features, so the app – through a series of practical services the customers have been asking for – will offer much more than a credit card can.

One of the first steps is a freshly developed receipt solution on top of the basic service. With a combination of in-house development and reviewing and responding to customer feedback backed by the group’s “Customer Service Program”, the developers have created a platform where new features customers and coworkers are asking for are swiftly delivered.

“It’s important that Salling Group has the freedom to develop and launch a series of services in an independent, fast, efficient and smart manner without too much reliance on subcontractors’ limitations. This means that we’re prepared to offer several services that customers have indicated a need for, but also a series of brand-new ones, which we’re excited to see how consumers react to”, Vindberg-Larsen says.

The corporation’s goal isn’t to compete with Amazon Go regarding technological breakthroughs: Salling Group is aiming to be profitable while meeting practical, real-world needs an average supermarket shopper is likely to have.

Removing the barrier between online and offline

While the tech company certainly wishes to adapt to the existing conditions of supermarkets and to support the shopping flow, its developers are already looking higher: they hope that, in time, Scan&Go will change that very flow to make shopping easier and faster.

“Scan&Go is not just about digital payments and allowing the customers to skip the line. The app is built on a brand-new platform, and a series of new services is being prepared for testing. Its heart and soul is self-service in the broadest sense of the word, allowing staff to spend more time on the floor instead of taxiing between restocking, manning the cash register and helping customers”, Vindberg-Larsen says, and continues:

“The secondary effects of our convenient app shouldn’t be underestimated, either. For example, Scan&Go is able to handle products close to their expiration date with exceptional accuracy, which creates synergies with the food waste solution ‘MadSkalSpises’. With a digital system like ours, one plus one equals more than two: self-service is also a big win for the food waste initiative.”

If the app becomes accepted by a wide spectrum of audiences, digital shopping in brick-and-mortar stores will open a world of possibilities for both consumers and businesses. Vindberg-Larsen thinks, one day, it will be possible to purchase a nice bouquet at a sidewalk flower shop outside the store after you thought you were done shopping or find alternative goods if a shelf is empty. Not to mention an almost endless list of smart features that can be added to the ubiquitous ones.

At the same time, the solution provides new business opportunities within the corporation’s compartment stores – a self-service juicing station, for instance, which isn’t profitable today because the cost of self-service is too high.

“The development has to happen in small, incremental steps, while we constantly focus on what the customers need. I’m convinced, however, that every step we take is leading us into the shopping experience of the future. It’s all about staying relevant. We already have some very positive experience regarding ClubSalling, our benefit program, which basically uses the same backend as Scan&Go, and has played an important role in bringing new users to the Salling universe”, Vindberg-Larsen concludes.