Published Wednesday 25th March 2020
It has long been documented that traditional retailers are under increased pressure. Competition on price and convenience from online stores has caused many UK high streets stores to cease trading. For some, the last decade has seen a consistent decline that can feel almost terminal.
However, there have been many recent reports of bricks and mortar stores bouncing back and performing well despite the wider industry. The reality is that traditional retail is in a state of transition, with changing technologies and consumer behaviours presenting newfound opportunities for modern stores. Cashless is one such technology, popularised by e-commerce, that could help to promote the high street to the modern consumer.
The Cashless Economy
While major cities and modern shopping locations are used to cashless shopping, the reality is that it’s a relatively new technology in the history of retail. Furthermore, there are many parts of the world, and the UK, where paying by cash remains the norm.
The reality is that physical cash is a payment method with almost prehistoric roots, with coins and even paper money dating back thousands of years. Eventually, technologies were introduced which provided solutions, allowing people to move large sums of money much quicker. One example is telegraph systems which, in the 19th century, allowed for wire transfers between banks.
Cards in different formats were introduced throughout the 1900s, allowing people to purchase goods from stores with more convenience. However, cash was still required at one point or another.
Since the turn of the century, digital technology has progressed at a remarkable rate, creating a new standard for convenience in everyday life. As with previous ages, this technology has filtered into the transactional world. Nowadays, tools such as account-based payments such as PayPal, contactless payments with your smart devices and mobile banking have created a world where many people can live without ever having to use the physical currency.
There is much excitement about where the future of the transactional economy may be headed, also. Recent developments such as cryptocurrency could introduce financial freedom for individuals that transforms not just how businesses and consumers interact but how the entire economy functions.
There is growing concern about the speed of these currency-based developments and the effect it could have on areas that haven’t been able to keep up. A recent Access to Cash report in the UK stated that 17% of the population would struggle in a cashless society, particularly vulnerable people or those in rural communities. However, this report also acknowledges that digital is the future when it comes to transactions.
A Modern High Street Experience
So long as everyone is taken on the journey towards a cashless society, the advantages it brings could make a world of difference for traditional retailers.
Many traditional businesses have complained about the advantages that e-commerce has, particularly its price competitiveness and convenience. On both of these points, moving to a cashless society could provide notable benefits.
On price, savings can be made with regards to the handling of cash when it transitions to being solely digital. Time and money spent on handling cash are reduced, which can also include staffing requirements, while insurance costs can also be reduced if there is no cash on the premises.
The main benefit, though, is in terms of convenience. Paying contactless or through another method can reduce the time customers spend in queues, allowing for a more streamlined experience. When this is achieved, the gap between the convenience of e-commerce against traditional retail becomes distinctly shorter.
Many examples have already shown the potential power of the cashless experience. A notable example is Amazon Go, grocery shops operated by the online giant that allow customers to walk in with the app, pick the products they want and walk straight out.
In February, Tesco opened its first cashless store in London using only self-service checkouts. Sainsbury’s has also attempted similar projects in the UK, although these have faced criticism from those that still rely on cash.
Investing in New Retail Technology
Many stores will still need to offer cash payments throughout this decade. However, cashless shopping is set to become a crucial part of the retail experience over the next few years. For any business looking to compete against e-commerce, investment in the cashless shopping experience will be required to appeal to the modern consumer.
Here at Expense Reduction Analysts, we’ve worked with major UK retailers for many years and understand the unique pressures across the sector. Our industry specialists can help to reduce retail operating costs across a range of areas, freeing up capital that can be invested back into the company.
If you’re interested in discovering how we can save your company money on its expenses, why not get in contact with our specialist team today?