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Author's profile photo Michael Renz

Smile to Pay – The future of Retail is now

It’s no secret that China remains a leading force in the mobile payments sector. It evolved to a cash-free economy faster than anyone could have imagined, largely because of the viral spread of QR codes. Today cashless payments through Alipay and WeChat can be made almost anywhere in China. As researchers around the world write case studies about how this tiny two-dimensional square changed the shopping behavior of a 1.4 billion nation in no time, things are changing as we speak. Facial recognition is going to change the game for digital payment in China once more, by pushing the experience from cashless to a hands-free interaction. Soon people may forget about QR codes, as the latest leap of facial recognition allows customers to pay with virtually nothing but a smile, with the beauty that you can’t forget it at home, you never lose it and it can’t be stolen.

Picture credit by Sunmi

How it works
Assuming that the customer has already signed up for the Face Identification, the payment process doesn’t require a smartphone. A camera located at the point-of-sale scans the customer’s face to verify their identity and deducts the amount from the linked account. The hardware, the face++ based algorithms and a central library of face Ids are part of the solution, which integrates out of the box with the leading POS devices such as Sunmi and offers open interfaces for POS providers. The Solution named “Dragonfly” was silently piloted end of 2018 by Ant Financial (the Fintech arm of Alibaba) and is set to go mainstream in 2019, as Alibaba spends stunning 500 million USD to promote the device. In reply to the game-changing innovation, the main competitor Tencent announced the end of March an early version with a similar function named “Frog”.

What’s Next? True Omni Channel Experience
It’s easy to see how ‘smile to pay’ is much more as a user-friendly method to pay, it’s setting the stage to transform retail by addressing one particularly poignant gap in retail: Personalized retail store experiences. It’s a true door opener for a real omnichannel experience. As of today, a walk-in customer remains unknown until the sale was made and the identity is earliest revealed via a loyalty program, and that’s may change in the future. The current advantage of online shopping over traditional offline retail stores is the easy tracking of consumer behavior, payment information, and targeting. If done correctly, following ethical rules, your face has the potential to bridge this gap and will make it easy to track the offline transaction and hence enable brands to target consumers directly.

Though still young, it has the potential to change the game for many different types of retail experiences, as the walk-in customer could be recognized in real-time using face detection before the purchase was made. Every shop assistant can be armed with insights such as recent purchases, specific preferences, open complaints, and wait-listed items, insights that can be used as conversation cues, meaningful interactions or for digital in-store advertisements. Imagine you’re living in 2023, and the experience of entering a physical store, where you’re welcomed by a digital advertisement board recommending you what you actually are interested in by adding items to your virtual cart.

Picture credit by Sunmi

Face detection isn’t new, what is changing?
It’s because of the explosive mix of data the internet giants Alibaba and Tencent get in their hands by tapping into offline retail, paired with the openness of the Chinese population to data privacy. A massive face library linked with identity and purchases will evolve in no time, a data set with tremendous value and the potential to unleash true offline to online scenarios. Of course, biometric technology has possible adverse effects on intrusion and privacy but follows the rules (such as full disclosure, opt-in and appropriately handled personal data), and the days of impersonalized retail are coming to an end. When a retailer knows its walk-in customers, it can serve them more effectively by pushing personalized advertisements via smartphone or digital walls, which has the potential to disrupt today’s offline advertisement industry, which is a double-digit billion market.

Integration with Digital Core as an enabler
In order to unleash a true omnichannel experience its key to make use from the cross-channel data within a Digital core, where the purchases from various sales channels, after Sales and Marketing comes together and unlock a personalized experience by taking all available data into consideration.

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      Author's profile photo Alex O'Leary
      Alex O'Leary

      I see tremendous benefits for retailers but where are the benefits for consumers? Maybe I am a dinosaur but I don't see many people jumping at the opportunity to have their own faces kept in a database so retailers cam maximise the commercial value of out them.

      China on the other hand is a special case, they will push businesses to use this tech because the data can be used for monitoring individuals.