International analysis: Kmart’s Pay in Store offer breaks barriers to online

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Sears’ Kmart is the latest retailer to enable online shoppers to pay in cash. Its Pay in Store scheme allows customers to reserve goods at Kmart.com and pay for them in store on collection within 24 hours.

It is by no means the pioneer of such an idea - Walmart launched its Pay with Cash offer in April last year - and it is unlikely to be the last.

Many consumers still dislike giving out personal information online, while for others cash is the only option, making shopping online arduous at best.

So if retailers such as Kmart - with its low-income customers who often don’t have bank cards - are to fully realise the potential of ecommerce, providing alternative ways to pay online is a must.

Looking at the results of Planet Retail’s US consumer research, Kmart’s scheme should be well received. Of those questioned, 47% said the ability to use alternative payment methods, such as paying with cash, would encourage them to shop online more.

In addition, 41% said they’d be encouraged to buy more online if delivery options were more flexible, such as in-store collection, while 12% said they had used reserve-and-collect facilities.

Despite this, and the fact the idea acknowledges the huge pool of untapped consumers, it is not the most appealing solution.

Providing online cash payment services, such as pre-paid vouchers and eMoney, would not only meet the needs of these shoppers but offer them far greater convenience. That is, after all, one of the more compelling reasons to shop online.

But for Kmart, it is not just about opening up online shopping to customers, but gaining insight into their behaviour.

The scheme is embedded within its Shop Your Way loyalty card programme, allowing it to garner similar levels of understanding about online consumers as it has at present about bricks-and-mortar shoppers. This in itself makes the concept a winner.

Overall, this is a shrewd initiative by Kmart. Not only does it appeal to savvy online shoppers by offering more choice, but by removing barriers preventing those willing but unable to shop online, Kmart has opened up a new and important demographic often neglected by the likes of Amazon.

This is sure to help Kmart realise the potential of online and provide a significant fillip to growth. As others follow suit, online cash transactions may well become as commonplace as PayPal or Visa.