As you grapple with digital transformation – don’t miss the obvious, Retailers!

I’ve attended a number of retail industry conferences in Europe over the last couple of months and there is one subject that dominates the content and conversations – digital transformation. How to achieve ‘Everywhere Retail’ – the new mantra describing a seamless customer buying experience anytime, anywhere, across any channel that suits the customer. Retailers recognise that their customers want convenience above all else. Convenience is King. If they don’t give their customers what they want, when they want it, then one of their competitors will. This ‘adapt or die’ scenario is giving business leaders plenty of sleepless nights.

So, it’s understandable that so much time is taken up by this challenge. ‘Everywhere Retail’ will be expensive and complicated to implement. Many of the technologies looking to deliver highly personalised and frictionless buying journeys, that will underpin this, are still immature.

It’s very easy to be absorbed and swallowed up in this raging sea of digital technology, multiple channels and complexity. And visions of what the perfect future customer experience will encompass. Suppliers are jostling to position their retail solutions and dominate current conferences agendas. Part of this vision is the assumption that digital transformation will bring with it a cashless world of digital payments.

But let’s just pause a moment.

Because how you plan to move towards the ultimate convenience for your customers should be based on ALL aspects of their behaviour and preferences. And there’s one very glaring omission that I have found when I have attended events. No one is talking about the fact that customers continue to use cash to make purchases. In many cases they prefer to use cash. Amazon know it and are acting on it. It’s strategy now includes bricks-and-mortar stores and the ability for customers to pay with cash on delivery, as they look to plug the gaps they have identified in its ‘Everywhere Retail’ strategy.

‘..There (is a)..major problem with the arguments for a cashless society: most people, at least in the eurozone, don’t want it. According to an as-yet-unpublished European Central Bank survey of 65,000 eurozone residents, almost 80% of all point-of-sale transactions are conducted in cash; and, in terms of value, more than half of payments are made in cash…’ Yves Mersch, Member of the Executive Board of the ECB. April 2017

This reality doesn’t fit conveniently into the headline grabbing story of digital transformation and disruption. Or the vision of a cashless society that is prevalent in media thought pieces. According to the data, a cashless society is not on the horizon, and may never transpire. Despite the fact that customers now have more choice than ever on how to pay for their goods – from credit and debit cards to mobile eWallets – currently, taking Europe as a whole, it’s a fact that more transactions are made in cash at the point-of-sale than by any other payment method. There is more cash in circulation than ever before. And it is rising. Even taking into account differences at a country level on the split between cash and card transactions, it does not change the fact that customers want choice, and they continue to choose to use cash alongside other payment options.

‘Retail payment systems continue to become faster and more convenient. Yet, despite increased use of electronic payments around the world, there is scant evidence of a shift away from cash. As the appetite for cash remains unabated, few societies are close to "cashless" or even "less-cash". In fact, demand for cash has risen in most advanced economies since the start of the Great Financial Crisis.’ BIS Quarterly Review. March 2018



Delivering convenience for the customer is the key driver behind technology transformation within retail. If customers still want to pay in cash, then this has to be accommodated. Don’t overlook the obvious. Make it part of your plans as you transform your processes.