By Ian Benn, Senior Vice-president, Ingenico.
This summer we saw two fun payment stories that caught my attention: pleasingly, one was about carrots and the other, parrots. Both bring a smile and a pause for thought about how rapid change in payment technologies affect behaviour.
First up: carrots. The UK press reported that Emmeline Taylor, a senior lecturer in Criminology at the University of London, had been retained by a “major supermarket” which discovered it had been routinely selling more carrots than the total amount it held in stock. In some cases, customers were buying 40lbs (18Kg) of them at a time! I bet they have great night vision.
So, what was really going on here? Well, carrots are among the cheapest vegetables in a supermarket. It seems that some customers at the self-service checkout counter were selecting the “carrots” option when weighing avocados or other expensive veg on the checkout screen in order to cut their grocery bill. Curiously, far more people seem to be happy doing this than would even think of stealing something off a shelf; yet clearly it is just another form of theft.
Why would a normal, upright citizen think that is OK? Payments and checkout experiences are changing behaviours and it seems that some justify it to themselves on the basis of sport: gaming the system. Others think it’s payback for a store that is too mean to provide a “proper” checkout. We all know that some people are reduced to stealing out of desperation, but these stats and subsequent research shows that this type of theft is mainly driven by another motivation altogether, i.e. “If this giant corporation is going to force me to check and pack my own stuff, I should get something in return.”
Every retail business makes an allowance for “shrinkage” in its economic models (loss through theft) and it may be that the losses are more than offset by the savings in checkout personnel costs and throughput. But there’s another message in play here – one about the erosion of the trust relationship between retailer and customer.
It’s widely agreed that seamless payment experiences enhance the customer experience and ensure people are happy to continue shopping with their retailers of choice. Yet it’s evidently important to consider the wider implications of this.
Interaction with new payment technology can bring its own issues for consumers too, especially when mystery parcels are turning up on their doorsteps. It seems, for example, that Amazon Alexa doesn’t discriminate against anyone when it comes to making orders. She has reportedly answered the requests of TVs, toddlers, and even household pets.
Buddy, the African grey parrot, was one such customer who managed to mimic his owner’s voice and order a range of unexpected gifts for his family. Maybe it’s a good thing they didn’t teach him the word, “Peanuts”? The process is very seamless, but is it secure?
This whole article made me smile, but beyond the silliness, there is a simple truth: convenience and security need to be finely balanced.
Paying for things has changed a lot in most countries and there is no doubt that there are easier ways to transact than using a pile of coins, a cheque (in some countries) or a card with a signature. Contactless, voice and fingerprinting all promise faster, easier ways to glide through life. The technology is there and waiting, but in many countries, something is stopping people from making the switch.
Behavioural Economics guru Richard Thaler taught us in Misbehaving (2015) that people are seldom entirely rational. Logically, we know that we could have a much easier time at the checkout (or simply not have checkouts at all), but we find our rituals comforting and we take time to adjust to a new way of doing things.
New payment technology holds great promise, but it seems that, when we are choosing to part with our hard-earned money in exchange for goods, we like the moment to be recognised. I think that applies to the seller just as much as the buyer – retailers want to be confident that they will be paid fairly for the goods before they let the customer walk out of their store or instruct the warehouse to ship the product.
Now, there are lots of more seamless ways to do that, but that small ‘commemorative ceremony’ –“The Presenting of the Card” – has a place in our hearts and maintains the vital level of trust between merchant and customer, upon which all transactions depend.
Payment technology continues to evolve and will integrate ever closer with our way of life: we humans are pretty adaptable and eventually, we settle into a new way of doing things. As to whether we’ll all be training parrots to order our online goods, who knows what the future may hold?