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Biometric technology means big things for retail and hospitality

Published February 22, 2021

Imagine this: It’s holiday shopping season, 2027. You hop in your car and say “start” and cheer as the car, recognizing your voice, springs to life. You arrive at the mall, and the store’s camera software is already familiar with your face as you enter, the interactive signage displaying appealing promotions based on your shopping history. When you’re ready to check out, there’s no fumbling with receipts or remembering PIN numbers—your fingerprint is all you need to complete the purchase.

No, it’s not science fiction. This is all made possible through the use of biometric technology.

Biometric technology, put simply, is the use of a person’s unique physical traits—voice, face, fingerprints, etc.—to identify them. It’s gaining traction due to the convenience and frictionless potential it delivers in our day-to-day lives. 

There’s potential and real growth in biometric adoption within retail and hospitality, too. From contactless payments to greater security, much of this technology is already established, while some will need time before it makes sense for retailers, practically and commercially.

But biometrics aren’t exactly new  and we will start seeing them used more and more. Why? This technology has been making waves as the pandemic causes businesses to fundamentally rethink the customer experience. 

Biometric technology is already a big part of our lives


Many people really don’t know just how common biometric technology is in our lives. In part, the term “biometric” itself seems too technical, and that makes it hard for people to understand what it is.

Instead, you often find biometrics advertised contextually as a feature of the products we use, like Samsung’s Ultrasonic Fingerprint scanner. These high-tech features are secure and practical, so it makes sense for brands to tout them as selling points.

Here are a few ways that you encounter biometrics today:

  • Mobile devices: Considered premium features until a few years ago, fingerprint and face scan technology is now available even on lower-tier smartphones. These security measures are easy to set up and deliver a means of access that is unique to the owner of the phone. The fact that they’re so common shows just how advanced and affordable the technology has rapidly become.
  • Home assistants: Sophisticated voice recognition software in Google Home, Siri and Alexa make life easier in a lot of ways. Whether it’s making appointments, ordering food, making purchases or just asking random questions for fun, these smart speakers confirm that biometrics have practical uses in our homes.
  • Building access: Originally reserved for government and corporate offices, the convenience and affordability of biometrics have seen them become the preferred method of securing private modern office spaces. 
  • Work and school: For work, biometrics prevent time theft and add a layer of accountability since the employee needs to be physically present to clock in. Schools can also use this technology to track attendance and make their building better protected through the use of fingerprint scanning and cameras (facial recognition).
  • Banking: Since so many banking processes require proof of identity, having that means of authentication physically attached to one’s body is a huge plus. Whether it’s for simple withdrawals or more intricate services, biometrics are on the rise in banking and finance.

Since people are already familiar with biometrics in their home, work and banking settings, the obstacle of adoption in retail and hospitality isn’t the main challenge. Instead, it’s understanding the true benefits and uses of biometric technology to effectively revamp the in-store experience.

As biometric uses grow, so do its benefits for retail and hospitality


The ways in which biometric technology serves to improve the experience between customers and the people who work in retail and hospitality will continue to expand, but right now, the core benefits lean toward safety, security and personalization. Some examples include:

Supply chain

A customer uses a credit card with built-in fingerprint authentication
 

Contactless transactions go hand in hand with biometrics. Consumers want to buy, and if biometric technology will allow them to enjoy doing so again safely, they’re all for it

In the majority of cases, customers do want something that is non-contact, accurate and frictionless.

Consumers are overjoyed with the prospect of being able to experience the thrill of shopping, dining out and traveling again. And for retail and hospitality, that means a healthier bottom line. As Mohammed Murad, vice president of global sales and business development at Iris ID, said, “We feel very strongly that under the circumstances now and previously, in the majority of cases, customers do want something that is non-contact, accurate and frictionless.” 

Security & Loss Prevention

Simplification of the facial recognition concept
 

Credit cards and other conventional payment methods are wide open to fraud and theft, but biometrics provide deeper protections. This is done by utilizing unique characteristics that are literally part of a customer’s physical identity.

Advances in facial recognition have enabled businesses to thwart shoplifters as well. For example, Walmart has been using this technology to scan, identify and notify security of known or suspected shoplifters for years. This is a testament to how sophisticated biometrics have become in preventing losses in retail.

Aside from identity theft and shoplifting, biometrics internally stop time and attendance fraud and reduce human error at the point of sale. It holds staff accountable and totally eliminates “buddy punching” by requiring an individual to be physically present as opposed to a code or password being entered.

Personalization

Personalized suggestions based on shopping history and browsing behavior
 

Even the most well-trained employee can’t compete with a high-powered algorithm—like Amazon’s recommendation engine—designed to examine behavior and recommend curated products or services to customers. This is why traditional retail has seen sales moving towards e-commerce and other digital channels. But biometric technology is making strides to match this intuitive experience in person.

Microsoft is a shining example with its’ Dynamics 365 Connected Store program. This initiative is a comprehensive in-store solution that focuses on studying traffic patterns and buying behavior to optimize and offer personalized shopping experiences inside Microsoft’s branded retail spaces. 

41 percent of hotel guests reported they were more likely to stay again if they were recognized without having to prove their identity, and 62 percent said that this would improve their overall experience. Biometrics takes care of this by recognizing returning guests and enabling staff to deliver a personal touch.

Biometric adoption is expanding like never before

Statista predicts that the global biometric technology market value will reach $30 billion by 2027.  This explosive growth—up from approximately 8 billion in 2020—can be attributed to the pandemic, increased adoption through popular products and continued investment and innovation.

Widespread use and funding of biometrics drives down upfront implementation costs as well, making it more feasible for retail and hospitality businesses large and small. 

Biometric technology is a dynamic solution that isn’t confined to singular purposes. Their use for increasing revenue is a focal point, too. Arturo Falck, CEO of Whoo.ai, says, “Once companies are using this type of technology for crime prevention purposes, there’s no reason why they should not be using it for upselling their customers.”

Finally, a recent report from Goode Intelligence forecasts 2.6 billion people globally will be using biometrics for payments by the year 2023, so about one-third of the world’s population will have embraced biometric technology. Numbers like these signal a bright future for biometrics’ place in retail and hospitality.

Responsible data handling removes biometric doubts


While biometric technology has many real-world benefits, it has also been met with hesitation stemming from consumer privacy concerns. As retail and hospitality continue to adopt these technologies, it’s important to keep this concern top-of-mind. Thankfully, innovation in the biometrics field prioritizes advances in data safety measures.

As continued attention is paid to how biometric information is collected and handled and the technology becomes more fool-proof, consumers can feel confident that keeping their privacy is paramount.

Dr. Jau Huang, chairman and CEO of CyberLink, agrees: “There is a huge difference in applications that are abused for surveillance versus opt-in technology that is built and applied with privacy in mind.”

The full potential of biometric technology in retail and hospitality remains to be seen, but rest assured it is a future-proof solution that will continue to improve the overall customer experience. Stay tuned!

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