In episode 10 of The Cash News, co-hosts Tom Meehan, CFI, and Shaun Ferrari are joined by Jessica Pohlen, vice president of global product commercialization at PayComplete, a market leader in unified financial transaction solutions for retail, transportation, and financial services. Pohlen started her career in cash security and management in Brazil, where currency circulation is a major systemic challenge for businesses. In this episode, she shares her insight on how the current status of the COVID-19 pandemic has led to the “coin shortage” along with a growing shortage of labor in the United States, and how emerging technology like automation can resolve these challenges in surprising ways.
The pros and cons of a “cashless society” have been debated countless times from almost every angle, from cash management and traditional financial services to technological innovation and socio-economic equality. While professionals in cash management are already familiar with the importance of cash in the payments ecosystem, retailers often don’t realize why cash is so critical to many customers. Businesses typically see a major economic challenge (like the recession caused by the coronavirus pandemic) as proof that it’s time to move away from cash as if innovation inherently means transitioning to cashless payments only.
But ultimately, businesses also know that they have to prioritize the needs of their customers, which includes accepting multiple forms of payment. Keeping in mind that cash is an essential method of payment, retailers should invest in making every part of the cash supply chain as seamless and efficient as possible, such as cash handling for store associates, cash deposit pickups for cash-in-transit companies, and deposit reconciliation for store managers.
The widespread fear is that automation always means robots and machines coming in to take jobs from people. However, it’s not possible to replace every human operator with a robot, particularly in areas where human employees provide a value-added service, like helping customers. There are already many successful examples of automation that many people forget about, like vending machines and ATMs. Automation has always existed in some way — but now we’re seeing many industries experiment with different forms of automation in their business.
These anxieties about automation are compounded by the current labor shortage impacting many industries at the moment. But the progress of automation has led us to replace jobs that workers aren’t applying for anyway, as seen in the recent labor shortage in the United States. Rather than taking jobs away from employees, automation makes retail operations more efficient and gives employees the chance to provide more valuable customer service in different roles, whether they are a concierge or host or they step into another role.
Take the emergence of self-checkout: By putting checkout in the hands of the customer, store associates become more like store hosts, so instead of ringing up customers, they have more time to answer questions, recommend products to customers, and create a welcoming shopping environment. Before self-checkout, retail stores had aisles of cashiers, but now these employees can provide more people-oriented services for customers.
In the United States, the majority of innovation in automation is driven by one goal: to cut costs. For example, the American quick-service restaurant chain Steak ‘n Shake closed their restaurant lobbies in response to COVID-19, which led them to reimagine their store operations to minimize contact between employees and customers. While exploring their options, they discovered that labor made up 40 percent of overall costs. Combined with the need to keep prices low to stay competitive, they used this situation as an opportunity to revamp their business, replacing table service with self-service kiosks and reallocating returning employees to concierge-focused roles to assist customers.
It’s also important to recognize that automation isn’t a one-size-fits-all solution for every area of retail. For example, the retail giant Walmart has recently experimented with automation by deploying robots on the store floor to scan shelves and monitor inventory. However, they soon discovered that the robots actually weren’t as efficient as they expected, and seeing six-foot-tall robots on the store floor can be disruptive to the shopping experience.
