Mastercard, Shop Anywhere, and the Rise of Frictionless Retail

The next generation of retail involves "thinking beyond experimentation" and putting customer experience above all else.

There is a relatively new underlying trend in retail that strives to make the act of buying as easy as possible for shoppers. This approach to making things as straightforward as possible is creating a common goal for every company that’s part of the retail ecosystem: true frictionless retail.

Frictionless retail is based on the idea that experience is now just as important to a consumer as selection, price, and other metrics that have always been considered key differentiators. Recent solutions such as contactless payments and order ahead contribute heavily to a modern consumer experience, but for newer iterations of frictionless retail, it has become a “standing on the shoulders of giants” situation—the most compelling retail experiences are created when payments companies, startups, and leading retailers collaborate together.

“Frictionless retail isn’t a new concept, and when it comes to frictionless platforms and features, one size doesn’t fit all,” says Stephane Wyper, SVP of retail innovation at Mastercard.

Retail is obviously top of mind for Mastercard. With this continued push towards simplifying the consumer-facing retail experience, Mastercard has been able to leverage its extensive technology stack and work with agile startups to develop next-generation solutions for some of the biggest retailers in the game. 

The latest innovation is Shop Anywhere, a platform that takes some of the most important engineering developments Mastercard has introduced over the last two decades and combines them into a straightforward approach to frictionless retail. 

“There is a lot of interest and demand for frictionless retail as brands think about the technology that will shape their next generation of stores.”

Stephane Wyper, Senior Vice President of Retail Innovation, Mastercard

Making it look easy

Shop Anywhere is a checkout-free (sometimes called cashierless) solution that enables retailers to operate a simplified shopping experience. Powered by AI and computer vision, customers can select products and pay for them without ever having to wait or scan a credit card. In some ways, it’s the ultimate form of frictionless shopping—see an item, pick it up, and leave the store. It’s as simple as that. 

True frictionless retail comes from three categories, according to Wyper. The first is how it relates to point of sale (POS), and how a retailer can adopt contactless payments, eliminating the need to deal with cash or even touch a payment terminal. The second is the order ahead solution, and expanding the ability for consumers to buy online or preorder, then seamlessly pick something up in-store. 

Shop Anywhere is working with Delaware North to open cashierless stores in airports and stadiums.

“The third category of frictionless retail is where new solutions like Shop Anywhere fit in,” explains Wyper. “It’s technology like AI and computer vision that we saw being deployed within the actual store environment itself, and how that was helping create this frictionless retail capability.”

Beyond the POS and order-ahead categories, there’s a lot of ways to explore how to simplify the rest of the shopping experience. And according to Wyper and his team, leading retailers are constantly having these conversations. 

“There is a lot of interest and demand from retailers as they think about the technology that will shape their next generation of stores,” he says. “At Mastercard, we have essentially developed this platform that allows retailers to leverage a core set of technologies as a way to deploy new store formats that remove a lot of baseline barriers for customers.”

A frictionless retail reality

Like Wyper noted, retailers are moving quickly when a chance to hit that third category of frictionless retail pops up. Shop Anywhere debuted with three partners: gas station chain Circle K; stadium and airport retailer Delaware North; and coffee chain Dunkin’ Donuts. 

Starting this month, Circle K is debuting grab-and-go stands right beside gas pumps, allowing customers to grab snacks and drinks without going inside the store. Consumers will link their payment information to the retailer through an app, and computer vision will spot when something like a bottle of Coke is removed from the shelf, then automatically charge them for the item. 

The true value of a solution like this comes from its flexibility. 

“Not every retailer is the same,” says Wyper “There are some core elements that spread across retail in general, but the customization comes from what the retailer thinks is the right consumer experience. Each of our Shop Anywhere activations has different use cases. For Circle K, we’re deploying a slightly smaller store format, next to the gas pump. It’s focused on bringing the convenience store out to the forefront and providing an ability for people who are refueling to buy something without going into the store.”

“There’s this this focus on thinking beyond experimentation and really looking at how these types of innovations scale.”

Stephane Wyper

Just like the idea of frictionless retail itself, cashierless technology isn’t new. Amazon debuted its Go technology (sometimes referred to as “just walk out”) in 2016, and in late 2019, announced that it might even be licensing the technology to other retail partners. Since then, CVS, Walmart, Giant Eagle, and more have introduced similar pilots. But according to Strategy Analytics, just walk out technology can be “exorbitantly expensive to implement and maintain” and is “impractical for many other grocers or general merchandise stores.” 

Qualms around pricing and access to technology aren’t slowing down customer appetite though. More than six out of ten adults are interested in shopping at a cashierless store, and that number jumps even higher when applied to self-checkouts and scan-and-go technology. This massive general appeal is where Shop Anywhere fits into the retail landscape perfectly. 

A look at how Circle K will implement Shop Anywhere.

Integrating Shop Anywhere does not require a full digital team building proprietary computer vision algorithms. It is a platform that can either be retrofitted within many existing locations or created and implemented as the next generation of retail for brands looking to the future. Circle K chose the former and focused on building at-the-pump offerings that offer a seamless way to get customers on their way quicker. 

Dunkin’, however, chose the next-generation angle. It built an entirely new branded experience called Dunkin’ Dash, where customers will have to register their credit cards to receive a QR code that lets them access the entire store. They can then grab packaged donuts, self-pour coffee, and more, all without a single cashier to help. It’s a format that “offers everyday items within everyday environments,” according to Wyper. 

The underlying factors that lead to massive shifts from the world’s biggest retailers—whether its retrofitted gas stations or entirely new consumer-experiences—prove that leaders in retail are ready to make big moves. 

Moving beyond experimentation

Removing friction in the retail environment leads to a lot of trickle-down value for a company. Employees can instead focus on keeping products stocked and answering questions, which leads to more sales and better brand loyalty. When sales are stronger and tracked more closely, it leads to better inventory management, which leads to higher sales and satisfaction. This leads to more revenue spent on curating products and experiences, and happier customers, and finally, in the end, bigger basket sizes. A lot can truly come from a frictionless experience. 

That’s why a lot of the companies Mastercard is working with are nearly past the point of AB testing these next shifts in retail. Circle K and Dunkin’ Donuts understand the impact these solutions can have on their bottom line.

Inside Mastercard’s Manhattan innovation hub.

“Something I’ve seen that has changed in the last year is this focus on thinking beyond experimentation and really looking at how these types of innovations scale,” says Wyper. “These brands understand the implications of scaling and ask those questions at an early stage. They want innovations to deliver a great consumer experience, but they also need to know how it works and how it integrates with their technology, and then also what metrics it will increase. It’s not just experimentation for its own sake—if this is successful, they need to know how it can expand it more broadly.”

Flexibility plays a large role here, as well as Mastercard’s deep experience in payments. It understands how to integrate its core technologies into a retail partner’s ecosystem, and has been doing so for years. Most retailers already have experience with Mastercard at some level, and when it comes to huge brands like Circle K and Dunkin’, relationships with the biggest payment providers are a necessity.  

“We leverage our assets around security, analytics, loyalty, and more to help these brands,” says Wyper. “The other component we provide is the ability to help integrate with their existing systems. We’re operating a platform that can integrate with the retailer’s own systems, whether it’s their inventory management, pricing, or anything else. For them, it’s this ability to have a platform that pulls together all the access required to deliver these stores’ critical core components.”

Similar to the case of Dunkin’ Dash, this flexibility is exceedingly coming in the form of next-generation retail solutions. Brands like Nike, Taco Bell, and Burger King are rolling out concept stores that will define the next decade of retail, and Mastercard wants Shop Anywhere to be a massive part of that physical retail generation. New stores will be able to leverage frictionless technology from day one, and even though some retailers may choose to retrofit it into existing formats, the trend moving forward will always still rely on a simple and straightforward approach.