Wal-Mart Stores Inc.'s recently disclosed test of mobile checkout technology could whet consumers' appetites for a later and more aggressive rollout of mobile payments.
Walmart's test lets consumers use their phones to scan items before they reach the point of sale. Though the technology does not support payments, the retail giant's participation in the
"Perhaps Walmart is trying to get consumers used to using their mobile devices as it rolls out mobile payment," says Paul Tomasofsky, president of Two Sparrows Consulting in Montvale, N.J. "Customers could scan now and get used to using their phones, and Walmart could add the payment aspect later."
Consumers have been reluctant to switch to new payment methods at the point of sale. Many ignore the contactless component of
Experts predict that a giant such as
The Bentonville, Ark.-based retail giant, which reportedly is
Walmart tests "new and innovative ways to serve customers and enhance the shopping experience," Walmart spokesperson Ravi Jariwala said in an email. "We don't have anything specific to share on that testing."
Walmart last week invited employees and some others with Apple iPhones to participate in the Rogers test, Reuters reports. Kiosks in the store read the scanned items in the app, though shoppers pay as they normally would.
Even if Walmart's test makes mobile payments more palatable to its shoppers, the retailer might have more immediate objectives.
"Their goal is to drive more sales," says Rick Ogelsby, senior analyst at Aite Group in Boston. "There's so many ways this makes sense, even if payment is never included with it."
This could be a move to speed up self-checkout lanes, to counter the use of mobile phones for comparison-shopping, or to cut staffing costs by shifting yet another task to consumers.
"It's all the above," Ogelsby says.
Many mobile wallet systems are built around the presentation and redemption of discounts and other offers. Walmart's app might do this as well in an attempt to convince comparison-shoppers to buy from its store. Many retailers are fighting the trend of "showrooming," or visiting a store to evaluate a product in person before placing an order online.
"Showrooming is a price-comparing process, and I can't see how you can stop people from doing it," Ogelsby says. "So you have to come up with a way that works for both the consumer and the merchant."
A smart retailer would allow price comparisons to be done but motivate customers to make the purchases with them, contends Maria Arminio, president of Avenue B Consulting in Redondo Beach, Calif.
"I don't think price comparisons is out of sorts with [building loyalty]," she says. In the context of comparison-shopping, "the payment piece is really an afterthought," she says.
Ease of checkout also is important. And though self-checkout lanes may not help to speed up the process, they involve less manpower, Arminio says.
Importantly, because of its market position as the world's largest retailer, anything Walmart does that's tied to a mobile device can have industrywide influence, Ogelsby says.
Though Walmart's system is in just one store today, "people shop regularly at Walmart, so if they get used to [smartphone-based shopping] there it's easier to adopt in other places," he says.
