NEW YORK (TheStreet) -- The arrival in April of Apple's (AAPL) - Get Apple Inc. Report smartwatch, with its easy-to-access notifications and integration with Apple Pay, could force retailers to rethink how they interact with customers and eventually even how their stores are laid out.
Organic grocer Whole Foods (WFM) is likely to offer an early peek into retailing, and the profit potential, in the age of wearable smart devices such as the Apple Watch.
Whole Foods was among the first merchants to offer payment by Apple Pay last fall, and was highlighted as a store where consumers would be able to pay for items using their Apple Watch at the tech giant's unveiling event on Tuesday. Whole Foods noted on their most recent earnings call that the grocer is the largest Apple Pay retailer in terms of both transactions and sales.
"We're committed to providing innovative new choices and conveniences for our customers, and the ability to buy groceries with just a simple touch of a finger elevates convenience to a whole new level," said Whole Foods co-CEO Walter Robb in a Sept. 9 press release. Thus far, merely having Apple Pay in operation may already be boosting Whole Foods' sales.
Payments via Apple Pay have quickly become about 2% of Whole Foods' transactions since becoming available at all stores on Oct. 20, and has led to speedier lines and perhaps, a few extra items in the basket given the ease of making digital payments. Same store sales growth at Whole Foods accelerated to 4.5% for the quarter ended Jan. 18 from 3.1% in the previous quarter, and while lower prices played a major role in that, having Apple Pay in place might have helped as well.
Comments by Robb to TheStreet in a Dec. 16 interview suggested Whole Foods was keen on experimenting on the Apple Watch because it sees both a financial opportunity and a way to enhance the customer experience.
"Our customers compared to most supermarkets are more digitally savvy, and inclined to use these sorts of products and processes," said Robb. He added, "The real question is how Apple moves to the Watch, and as they start to build out their mobile payment ecosystem, what other sorts of items come to the customer beyond the wallet function -- I think it's another way for the customer to shop."
Changes to the customer experience at Whole Foods and other retailers could eventually become profound.
Lines at Whole Foods would become dramatically shorter and over time, the number of checkout lanes with their labor and infrastructure costs would be reduced.
Shopping and paying for goods in this way would likely cause retailers to rethink store layouts to take advantage of the added space, as well as make it easier for people to find what's on their personal shopping lists.
But the retail store of the future that could be put in motion by the Apple Watch and stores such as Whole Foods is not without risks, primarily consumers being slow to adopt new technology. Two-thirds of Americans say they would "never" or "hardly ever" use their cell phone to make a purchase, according to new research from CreditCards.com. The results were little changed from six months ago, in spite of more marketing for the latest set of smartphones from Apple and Samsung.
This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.