New research by ANU academic Dr Emmeline Taylor has underscored the benefits and risks of new mobile technology in retail businesses, particularly in terms of how new technology will impact on shrinkage.
Taylor is Senior Lecturer in Criminology with the ANU College of Arts and Social Sciences, and her research paper (Staying Ahead Of The Game) was commissioned by Efficient Consumer Response Australasia. Shrinkage, otherwise known as a loss of stock due to shoplifting, employee theft, fraud and paperwork errors, costs the Australian retail industry over $2 billion a year.
Taylor said that introduction of any new technology, service or process will generate a range of risks, vulnerabilities, security issues and training needs, and that emerging mobile technologies are no exception.
“We saw this with the introduction of self-checkout in Australian retail, which redefined the retailer customer dynamic, but also increased the number of ways retailers suffer losses,” Taylor said. “We can expect similar hiccups with the introduction of new mobile scanning and mobile payment systems, as they create a new set of shrinkage problems.”
Taylor said mobile phone technology is an attractive platform for fraudsters because the security protocols were not as mature as e-commerce or in-store payment systems.
“Mobile payment processes must be safe and secure from the outset. Fraudulent activity, theft and security breaches not only impact the bottom line, but can have devastating impacts on customer confidence,” she said. “Retailers will need to ensure that any potential security risks are anticipated and safety measures are put in place.”
Some examples of new – and potentially risky – mobile technology that Taylor believes may soon be available to Aussie retailers include:
• An app that converts customers’ smartphones into a scanner. When they’re finished shopping, the list of scanned items is downloaded at a paystation, and customers can then pay by cash, card, or by using their smartphone as a ‘mobile wallet’.
• Customers using in-store devices such as a tablet to browse and select items, and then make their payment.
• Customers using store-owned hardware such as a handheld scanner, or a touchscreen tablet fixed to a shopping trolley. When they have finished shopping and scanned all items, customers take the scanner and items to a kiosk or checkout station, where the purchase information is downloaded and payment is made.
The full Staying Ahead Of The Game, is available here.