Drive Fan Experiences and Journeys With Frictionless Checkout

Digital Transformation Technology Report

EXECUTIVE BRIEF

Analyst Perspective

Redefine the fan experience with frictionless checkout technology

Frictionless checkout technology is gaining popularity outside and inside venues. Many major venues, retailers, grocers, and restaurants are offering consumers the ability to pick items off shelves and walk right out, allowing them to take control of their own shopping journey, and fans are not excluded from this frictionless shopping experience.

Frictionless checkout technology redefines the shopping experience across a variety of industries, and it also redefines the overall fan experience at an event. Fans have a desire for speed when purchasing items during an event to reduce their fear of missing out, and removing checkout lines to improve the fan experience is worth US$37.7 billion (Crunchbase, 2020).

Additionally, the business will benefit from this opportunity because frictionless checkout technology can better understand the fan shopping journey through in-store data and analytics. Data-driven insights have a domino effect where organizational improvements will follow the frictionless experience. Frictionless checkout technology is changing the shopping and fan experience in extensive ways, and there are considerable reasons to make the switch in your venue (Forbes, 2021).

Elizabeth Silva

Research Specialist, Sports Entertainment Industry

Info-Tech Research Group

Executive Summary

Your Challenge

• You are struggling to find the time to research a very new market in depth and you do not see the value of a frictionless checkout platform, putting you at risk for missing out on a new digital opportunity.
• As frictionless checkout platforms are relatively new, it is challenging to determine what vendor offers the right features, functionalities, and opportunities for your venue.
• You are worried about the unknown risks and threats that frictionless checkout technology may create for your business.

Common Obstacles

• You don’t know where or how to begin or how to engage the right people, model the business, and drive value for frictionless checkout technology.
• Digital transformation has accelerated across every industry, organization, and department, and CIOs must maneuver this change to keep pace in a digital-first world.
• The business and IT often focus on a project, ignoring the holistic value that it will provide today and in the future.

Info-Tech's Approach

• Determine how your business can create value through the sports entertainment business capability map and how a frictionless checkout platform can enhance, improve, or create value.
• Use a fan persona and journey mapping exercise to determine opportunities for frictionless checkout.
• Through vendor research and interviews, Info-Tech has identified the various features, functionalities, and digital opportunities that each vendor offers in order to facilitate going to RFP, and implementation can be fast tracked with Info-Tech’s Rapid Application Selection Framework.

Info-Tech Overarching Insight

To create frictionless fan journeys, sports entertainment venues need to digitally enhance fan experiences within all outlets of the venue to develop unmatched experiences, and value and efficiency improvements will follow.

The commerce everywhere evolution

Frictionless checkout technology is only the beginning

How did we get here?

• The commerce everywhere evolution started with enhanced online shopping implementations due to the COVID-19 pandemic. In a post-pandemic and digital-first world, physical and digital are being transformed into new and fully connected experiences.
• Frictionless checkout technology is just the beginning of redefining the shopping experience for fans and consumers alike (Forbes, 2021).

What is it?

• Frictionless checkout technology provides venues with the ability and platform to provide frictionless experiences to fans within any type of shopping area, such as retail or food and beverage. This type of technology is typically used to save time by eliminating lines, enabling touchless experiences, and lowering labor costs.
• Frictionless checkout technology is replacing standard cashiers and even self-checkout kiosks. With frictionless checkout technology, the fan is constantly tracked by sensors and/or cameras to identify what is in their “basket.”

How does it work?

• This technology works by using Internet of Things sensors to collect data as well as using algorithms, RFID, sensor fusion, and more to sense the truth in the real world.
• Some frictionless checkout platform vendors also provide data and analytic services for venues to better understand fans, their emotions, and their behaviors behind their shopping experience. Data and analytics can also assist in better inventory management and product placement strategies.

As cost pressures mount and recovery from the COVID-19 pandemic begins, the popularity (and market size) of frictionless checkout technology is projected to grow.

Improving the fan experience and creating a faster shopping process mean more volume in sales, where removing checkout lines is worth US$37.7 billion (Crunchbase, 2020).

The brick-and-mortar retail market is worth more than US$5.5 trillion. If checkout-less companies capture 5% of that over the next four years, they will have access to a US$275 billion market (Crunchbase, 2020).

Transform your venue to compete in a digital-first world

Venue digital transformation journey

Where most sports entertainment organizations are having challenges in transforming and competing in the industry:

Fan Connectivity

1. Basic connectivity sets a foundation.
2. Venue transformation begins as smartphones are the hub.
3. Internet and social media access is crucial.

Operational Excellence

1. Extend the transformation beyond smartphones.
2. Support operational functions of the venue to enable touchless, cashless, and frictionless experiences.
3. Conduct initial data harvesting and analytics.

Where most sports entertainment organizations will have challenges after they complete fan connectivity and operational excellence transformation:

Data & Immersion

1. Harness data lake with analytics.
2. Increase fan loyalty.
3. Drive team partnerships with closed-loop data insights.
4. Create an immersive fan experience.
5. Enable in-seat live betting and services.

The future is frictionless

Transform to compete in a digital-first world

The Future of The Fan Experience

• Frictionless checkout technology improves the fan experience by eliminating friction and speeding up the shopping process to give time back to fans to enjoy the event and cheer on their team. Over and above that, it is also changing the future of any shopping experience inside or outside the venue.
• The future is frictionless – it provides the opportunity to engage fans to use the venue/team app and loyalty program, which increases the business’ access to fan data.

“With checkout-free stores, a huge repository of data will be available for retailers to create excellent customer experiences. This will help them promote brand loyalty and improve footfalls in the long-term.” – Vipul Aggarwal, Chief Revenue Officer of Better Commerce (MyCustomer, 2021)

Fan Data to Compete in a Digital-First World

• Capturing more fan data allows businesses to gain critical insight into what fans buy, their behaviors, and their habits, enabling businesses to hyperpersonalize the 360-degree fan experience.
• Behavioral data can also be used to create real-time rewards based on fans’ habits and behaviors as they are happening rather than post-purchase rewards (MyCustomer, 2021).
• The influx of data and insights that frictionless checkout technology can provide to the venue (or any business) will change day-to-day operations; both fan experiences and operations will be digitally transformed to compete in a digital-first world.

“Implementing checkout-free technologies and approaches removes the biggest pain point in retail – queuing to pay.” – Oliver Guy, Senior Director of Industry Solutions at Software AG (MyCustomer, 2021)

“Speed and convenience was listed as the third most crucial thing that customers want from their shopping experience, with 33% of those surveyed stating that this was important to them.” (MyCustomer, 2021)

POS advancements have accelerated

Traditional point of sale (POS) systems have come a long way, and more advanced technology is coming to enhance and improve 360-degree experiences

Technological Evolution of the POS

Past:

1879

• The first cash register is invented.

Mid-1970s

• IBM introduces the first computer-based, electronic cash register.

1992

• The first POS software for Microsoft Windows is created.

2002

• The first cloud-based POS system is introduced in the UK.

2010

• NFC/RFID/BLE/Wi-Fi and mobile ticket functionality are added at low cost to mass-market mobile-phones and other devices.

Present:

2012

• Geofencing and mobile POS is introduced and takes over the POS market.

2014-15

• Self-serve kiosk systems and mobile apps are being introduced for the first time for ordering. Starbucks launches their first mobile order and pay app (Starbucks Stories, 2015).

2018

• Fully integrated handheld POS systems and tablets are introduced.

2020

• Amazon opens its first frictionless checkout grocery store in Seattle.

The Future of Frictionless Fan Journeys & Experiences:

2022 & Beyond

• Frictionless checkout stores, shelf edge display, pick-up lockers, smart mirrors, bottom-of-basket detection, automation, and facial, iris, voice recognition start to become highly popular in sports and entertainment venues and industries alike.
• The evolution includes IoT gateway, cloud edge, AI, and algorithms for nonstop entry to parking and other areas alike for VIP, suites, and season ticket holders.
• Augmented and virtual reality, the metaverse, and lens/wearables are used in store and at home to experience shopping or events from anywhere.
• Sensor fusion, biometric contactless readers, and cryptocurrency are used as payment options and entry access.

Source: Toast, n.d.

Consider other industry innovations

Leverage frictionless technology from industries that could improve fan experience

Circle K’s pay-by-plate option

• In Norway, Sweden, and Denmark, Circle K has launched Easy Fuel, an emerging technology based on pay-by-plate convenience.
• The driver registers their vehicle license plate number and payment method on Circle K’s app and then can just fill up and drive off when refueling.
• The pay-by-plate technology can be applied to stadium parking to reduce friction of payment.

My voice is my password

• In 2014, large banks around the world started adding the option for clients banking by phone to use their voice as their password.
• Applying this technology to registered visitors could reduce friction of payment at concession stands and increase sales.

‘‘We are committed to innovating for the future of convenience. This year, we had exciting breakthroughs in payment and delivery options, gamification, and frictionless capabilities. Our ambition requires us to incubate and test learnings and quickly scale ideas that simplify and improve the experience for our store team members and customers.’’

– Deb Hall Lefevre, Chief Technology Officer (Couche Tard Annual Report, 2021)

Opportunities heavily outweigh the challenges

Opportunities

• Create a faster and frictionless shopping process to improve the fan experience and eliminate the fear of missing out.
• Use the venue/team app and loyalty program more often through integration with the frictionless checkout technology.
• Create hyperpersonalized experiences through increased access to fan data and leveraging advanced analytics to identify crucial opportunities.
• Develop real-time rewards based on fan habits and behaviors (MyCustomer, 2021).
• Launch smart inventory management to communicate with venues on when they should restock shelves and order more of an item to reduce waste from over-ordering (Retail Technology Review, 2021).
• Develop product placement strategies to reduce waste management and over-ordering.
• Reduce operating losses by eliminating shoplifting and employee theft.
• Build fan connection by relocating and repurposing traditional cashiers to fan service roles within the store or venue to improve the fan experience.
• Leverage frictionless checkout concepts for future opportunities such as license plate recognition for VIP parking access and voice verification at concession stand payment terminals.

Challenges

• Fans could reject frictionless checkout technology due to personal fan interests and beliefs.
• Restricting options could impact fan experience if there is not a traditional checkout option available.
• This could create a social divide on when venues should restock shelves and order more of an item.
• The risk of cyberattacks and data breaches increases due to more data being collected and processed.
• There is potential reputational damage and negative impact on fan loyalty if data is breached (MyCustomer, 2021).
• A strong commitment is required for days to weeks of construction to implement this type of technology.

The right metrics will drive success

Consider the following metrics to measure improvements

(Sources: CFI, n.d.; Disruptive Advertising, 2020; Personify, n.d.; “How to Calculate Recurring Revenue,” Salesforce, n.d.; StriveCloud, n.d.; “How to Calculate Customer Churn Rate and Revenue Churn Rate,” Salesforce, n.d.; Hubstaff, 2020.)

Business and IT will both benefit

Business Benefits

• Improve the fan experience by deploying cashierless stores and frictionless shopping experiences in the venue.
• Increase revenue through improved shopping experiences and hyperpersonalization.
• Provide hyperpersonalized experiences to fans through critical insights driven by data and analytics.
• Create more efficient venue operations through data and analytics and reallocating staff from cashier to fan service roles.
• Deepen the relationship with fans as the number of items that fans purchase also increases, resulting in a higher dollar spend and more brand connections.

IT Benefits

• IT will be seen as a valuable partner and will enable the success and transformation of the business while elevating the CIO’s influence with the leadership team.
• The business will invest in technology that enables a holistic and seamless fan experience.
• Provide insightful data and analytics through the technology that is invested in.

A frictionless checkout store at the Indianapolis 500 reported almost 200 delivered receipts per hour to generate an ROI four times greater than the store’s operating cost in a single day (AiFi, 2022).

Discover High-Value Fan Experiences

An Industry Strategic Foresight Trend Report

The COVID-19 pandemic has disrupted the sports entertainment industry, and revenue streams and relationships with fans must be redefined and rebuilt to meet new fan expectations post-pandemic.

72% of sports entertainment organizations expect to invest in new technologies that deliver new experiences this year. (Stats Perform, 2021)

Advanced Wireless

• 5G
• Wi-Fi 6
• CBRS

Immersive and Gamified Sports

• Over-the-top media
• Mixed reality
• Tech lounges
• Esports
• Non-fungible tokens (NFTs)
• Virtual reality
• Real-time live sports betting
• Augmented reality

>60% of fans agreed that having a great "year-round experience" would make them more likely to become more engaged with their team in the coming season, while 55% said that it would make them more likely to purchase a ticket in the future. (Deloitte, 2021)

Vision Recognition

• Smart access control systems
• Real-time crowd intelligence
• Touchless access using facial recognition
• Facial recognition for COVID-19 screening
• Palm reading for payments and access control
• Biometric security

#1 Fan Journey

1. Before the Event
   • Let the fans plans ahead
2. Inside the Venue
   • Make fans feel like VIPs
3. During the Event
   • Anticipate a shift in standard expectations
4. After the Event
   • Provide at-home excitement
5. Beyond the Venue
   • Extend your reach

Digital Ecosystem

• Mobile integration and automation platforms
• Stadium/team apps
• Mobile ticket platforms
• Public engagement through digital and social media
• Contactless POS systems
• Digital signage, IPTV

Frictionless checkout technology is a trend that drives a digital ecosystem within sports entertainment. Making fans feel like VIPs and anticipating their expectations during an event can be achieved through frictionless checkout technology and can create 360-degree expectations.

Digital Sustainability

• Water preservation through rainwater collection, harvesting, and recycling systems
• Cogeneration of conditioning and electrical systems
• Energy preservation through solar and wind power
• LED lighting
• Electric car parking

Section 1

Value Chain to Value Creation Analysis for Frictionless Checkout Opportunities

Section 1

• Value chain analysis
• Fan personas and journey scenarios
• Journey mapping
• KPIs

Section 2

• Key players
• Vendor assessment
• Case studies

Drive Fan Experiences & Journeys With Frictionless Checkout