Costco Launches ‘Scan & Pay’ for Faster Checkout
Costco is currently testing an innovative feature known as ‘Scan & Pay’ that permits customers to scan items in its warehouses using their smartphones, a development that aligns closely with practices already established by Walmart-owned rival Sam’s Club. This shift comes as part of a broader strategy to leverage technology in order to streamline the shopping experience and improve operational efficiency.
Details on ‘Scan & Pay’
During the company’s fiscal third-quarter earnings call, Costco CEO Ron Vachris elaborated on the early-stage testing of this technology. According to Vachris, the aim is to facilitate a quicker exit from stores by utilizing smartphones for scanning and payment.
Once a customer completes the purchase via the app, a QR code is generated. This QR code can then be scanned at a kiosk located near the exit, further eschewing traditional checkout lines, which are often characterized by prolonged waiting times.
Increasing Adoption and Customer Feedback
Vachris reported promising preliminary results, noting that the adoption rate among members has been notably positive. This user-friendly approach has garnered favorable feedback, positioning ‘Scan & Pay’ as a potential game-changer in the shopping experience for Costco members.
Comparative Insight: Sam’s Club’s ‘Scan & Go’
It’s important to contextualize this move by understanding how Costco’s strategy mirrors that of Sam’s Club, which introduced ‘Scan & Go’ technology in 2013. Initially, Sam’s Club’s offering allowed consumers to scan items using a mobile app, but required them to finalize payment at self-checkout kiosks. As technology evolved, Sam’s Club improved its offering to permit in-app payments.
Currently, Sam’s Club aims to fully transition away from traditional checkout lanes throughout the U.S., thus enhancing the convenience factor for consumers. The company has invested heavily in this technology over the years, mapping out a competitive advantage that Costco now seeks to replicate with its own version, albeit under a different branding of ‘Scan & Pay’.
Technical Specifications and Integration
Costco’s ‘Scan & Pay’ feature is being developed in collaboration with Instacart, leveraging the technological backbone of the grocery delivery service to enhance its operational capabilities. This integration allows customers to seamlessly build a digital cart as they shop, tracking prices in real-time and effectively managing their total spend before exiting the warehouse. With over half of Costco’s membership utilizing its mobile app, the stage is set for greater digital engagement.
Future Implications for Costco and Digital Strategy
Costco’s shift towards adopting self-service technology indicates a larger trend within the retail sector aimed at improving overall customer experience and efficiency. CFO Gary Millerchip noted that the company sees ‘Scan & Pay’ as a significant growth avenue.
“We still think there’s plenty of opportunity to keep driving higher penetration of digital engagement with our members,” Millerchip mentioned during the earnings call.
Experts suggest the successful implementation of ‘Scan & Pay’ could also lead to cost savings by reducing the need for staff in checkout areas. As consumer preferences continue to pivot towards more digital experiences, Costco’s embrace of such technology positions it to remain competitive within the warehouse club sector.
Conclusion
As Costco advances its digital initiatives, the testing and potential rollout of ‘Scan & Pay’ not only align with customer convenience but also signal a strategic move toward enhanced profitability through operational efficiency. With technology driving retail innovation, the race to implement the most user-friendly and efficient shopping experiences is likely to intensify across the industry.
Source: fortune