Going Contactless With Shoppers in a Post-COVID World

2020 is behind us, and the pandemic should soon be following it out of the door. Yet for retailers, this is still a time of transition.

And COVID-19 will be with us for some time yet. According to McKinsey, the US will not achieve herd immunity until Q3–4. So the need for social distancing in-store will remain for a large part of the year.

The pandemic has already altered the way people shop – perhaps permanently. Once stores were designed to handle large numbers of people and funnel them to products and promotions. Now, they need to keep people apart.

In contrast, our steady shift towards both e-commerce and a cashless society has gathered momentum.

Contactless payments as a proportion of face-to-face payments had grown by 25% compared to 2019. Another consequence of 2020, has been the boom in online shopping.
Mastercard

Nervousness in store

Around the world, COVID has had the same effect on retail as it has consumers. People are nervous about contracting an infection in-store.

Right now, the challenge for brick and mortar retailers is to make shoppers feel more confident about going in-store while ensuring they, and staff, stay safe. That is the focus of this guide.

It comprises the latest trends, research, technology, and views. It also sets out the challenges likely to be faced by IT and operations managers across both grocery and general retail.

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1. Too scared to shop - 2020's impact on Retail

There is no disguising it – 2020 was a difficult year for brick and mortar stores. While grocery was able to operate – it could only do so under difficult circumstances.

General retailers have been more affected by the pandemic as sales shifted to e-commerce. This was down to either store closures, or because people wanted to avoid stepping into one.

Total retail sales worldwide are expected to hit $23.4 trillion in 2020. Despite growth online, this is still a 5.7% reduction from 2019
Different regions, similar responses

The fear of COVID-19 has spilled over into other areas of life and affected lifestyles as well as mental health. These concerns will be with us for some time yet and are something stores need to bear in mind.

In the US, 53% of adults said their mental health had been negatively impacted by worry and stress. In the UK, more than two-thirds of adults (69%) said they were concerned about the effect COVID-19 has had on their life.

The response from retailers has been uniform across both Europe and large parts of the US. Many stores quickly introduced a range of safety measures. But in many cases, this has had mixed results. While it has reassured shoppers it has also reminded them about the possibility of infection.

As a result, people are nervous about shopping and want to reduce ‘contact’ in-store. This could be anything from paying at the checkout to unnecessarily touching a product.

Overall findings include:

  • Despite the growing use of e-commerce, consumers still want to shop in-store.
  • In addition to being safe, people want a similar level of convenience to what they had pre-pandemic.
  • Checkout lines and shopper limits dissuade shoppers from visiting a store.
  • People are turning to technology to help shop – especially smartphones. And this runs across age groups.
  • Customer loyalty has been redefined as 78% of consumers have switched their regular brand or store.

In response, many stores accelerated their omnichannel offerings. This is borne out by Xenia Retail’s CEO Troy Stelzer in the video below.

2. How 2020 has changed Grocery Retail

Supermarkets have played a crucial role in keeping people going throughout the pandemic. For many, the trip to the store was the only brush with normality they were allowed.

But for many others, it was a stressful but necessary experience.

Stores have gone to the trouble of introducing restrictions on numbers, anti-bacterial wipes, and in many cases, redesigning interiors. All in an effort to make the store safer. Yet it has the side effect of reminding people of the dangers.

The comment below is typical.

Customer perceptions are incredibly important. Consumers don’t like precautionary measures such as store limits. But when stores remove them – because there is no need at that point – the customers immediately question it.A European grocery retailer

Despite many retailers’ best efforts, many customers are looking to minimize contact with products of store equipment. In the latter case, this includes dedicated barcode scanners or self-checkout kiosks.

Consumers using online tools in-store

According to research by US retail consultancy Acosta, 59% of US shoppers said they were comfortable using digital or online tools to help with grocery shopping. In 2015, it was 35%. While 89% of grocery shoppers are using a smartphone, 22% more than in 2015.

We saw increased ‘mobilization’ numbers this year due to the COVID-19 pandemic. The shopping experience has significantly changed, and many consumers are limiting their trips to the grocery store and being as efficient as possible with their time in the store. To do this, they are looking to mobile solutions more and more.Colin Stewart, Acosta EVP of business intelligence at Acosta

3. How 2020 has changed General Retailers

For general retailers, including DIY, electronics, fashion, and cosmetics, the story has been about whether they had a strong omnichannel presence before the pandemic.

The rise of e-commerce has been a long term trend. However, its use rocketed during 2020 taking many retailers by surprise. It also changed the way retail brands operated as they sought to balance demand with supply.

Here are just a few of the statistical headlines.

  • In March, nearly 41% of customers said they were currently shopping online for things they would normally buy in-store (Bazaarvoice).
  • Retail sales fell 20% between February and April. There were substantial declines in categories like clothing and accessories stores (down 89%) and department stores (down 45%) (Deloitte).

At the same time, there is evidence that people are shopping online as a way of staying safe. While a store’s brick and mortar chain plays a large part in making the e-commerce site more appealing. This is highlighted by the shift into physical stores by online brands.

We found people were going into the store and shopping on our website through their phones. It counted as an online sale and was fulfilled by our online operation. But they did it in the store while they were looking at the product.A major European retailer

Despite the popularity of stores, consumers are nervous about visiting them. UK e-commerce solutions provider ChannelAdvisor surveyed consumers after lockdown restrictions were eased and non-essential stores were reopened in mid-2020.

It found:

  • 40% of consumers questioned said they visited a store in the first week of reopening.
  • Top reasons the other 60% avoided stores? Fear of crowds and COVID-19 was a factor. But many people did not want to wait in line to enter the shop.

The response leads to the conclusion that if a store can make people feel safe while maintaining convenience, then they are well-positioned to thrive.

4. 'Contactlessness' will be a key to a successful 2021

Contactless services, even paying via a mobile phone, have become even more popular with consumers. And retailers have been quick to realize it.

Everyday tasks like lining up at the checkout, or even allowing a staff member to scan your products, are seen as potentially health-endangering. As a result, anything that can be done to lessen this contact will help set consumers’ minds at ease.

Many retailers are embracing this an opportunity that can be solved with existing technology. And the best way forward is to utilize the shopper’s own device – something they trust and know is safe to use.

Customers feel safer with their smartphones

Smartphones are already being used for barcode scanning. Indeed, it has already become mainstream over the course of the pandemic. In the hospitality sector, for example, people regularly used QR codes to order food from the menu.

In late-2020, Scandit asked over 100 key EMEA retailers about how they were using technology to reduce customer concerns about COVID-19. The top solution appeared to be Scan & Go with 44% of retailers using it. Out of the remainder, 33% said they were planning to deploy it.

Scan & Go benefits cited in the report included:

  • An ability to engage customers with a better shopping experience.
  • Freeing up staff for other, safer, tasks such as order picking.
  • Less contact with staff or other shoppers.
  • Less time spent lining up and waiting for the checkout.
  • Reduced touchpoints. The customer’s own phone is safe and gives them more confidence to shop.
  • Overall convenience, speed, and ease of use.

In addition, 2021 is bringing a move to blend online functionality into the brick and mortar experience. One example is Walmart.

The US chain recently grabbed headlines when it announced plans to overhaul 200 of its supercenters with a new “airport-inspired” functionality. This includes prominent signage and contactless checkouts.

5. Challenges for Store Operations - keeping the stores running

COVID-19 restrictions will play a big part in the retail operations for a large part of the next 12 months. From an operations perspective, the challenge will be to keep the stores stocked and running.

Operations challenges include:

  • Keeping staff safe – a store worker could be touching products and items many people have touched throughout the day.
  • Restaffing – ability to move staff to new tasks such as product picking for online orders.
Keeping flexible

Fluctuating staff numbers have made it difficult to manage stock inventory. As a result, many large grocery stores have had to drop 24-hour shopping during the more stringent lockdown periods, to restock. Equipping staff with the right tools will be fundamental to ensuring the shelves are full.

There is also likely to be further shifts towards reducing checkout wait times. This will happen through both the use of technology and store design.

Crucially, there are signs consumers are becoming more impatient with COVID-19 restrictions. And with changes in loyalty more frequent – and the shift to e-commerce – it will be important to keep customers onside with a view to the end of the pandemic.

2021 will also be a good time to test new procedures. The focus on minimizing contact is expected to continue after the pandemic is brought under control.

Many stores will be looking to combine this with convenience. Here contactless technology is likely to play a key role in both helping consumers, as well as staff, keep stores running.

6. Challenges for IT - integrating contactless solutions fast

The big challenge for retail IT managers has been to keep the systems up and running. This is likely to continue. But many will also be looking to the future.

IT challenges include:

  • Building on existing 2020 contactless initiatives.
  • Integrating new solutions with existing infrastructure.

At the beginning of 2020, many stores were forced to ramp up their omnichannel and contactless solutions. In 2021, as consumers have become used to this way of shopping, the focus is likely to be on finding a long-term solution to appeal to these customers.

Working with existing infrastructure

Often building and maintaining an omnichannel experience will need to be done within the existing infrastructure and applications. Again, this is where creating a self-scanning or Scan & Go solution on a customer’s phone is ideal.

This can be achieved by improving existing native or web applications. However, post-launch support, and the ability to run on the many thousands of different devices, is crucial to a Scan & Go app’s success.

7. Slowly shifting to a post-COVID world

COVID-19 has trained shoppers to think in a different way. They are not only more willing to shop online but expect stores to be both contactless and convenient.

This is a difficult balancing act. But the signs are the stores that offer this will thrive. Despite the growth in e-commerce people want the experience of shopping in a store and seeing products.

Less contact and bigger baskets

The way to connect with consumers in a contactless world is through their own devices. Scan & Go reduces the need for checkout stations – while research has demonstrated that it also results in bigger baskets. It is also relatively simple to deploy.

The potential of Scan & Go is borne out by a survey of 1000 US consumers by MyTotalRetail.com in August last year. It asked them how they would like to use technology to safely interact with products on the shelf.

Responses included voice-activated and motion-sensitive solutions. But the winner, with two-thirds of answers, was Scan & Go – preferably on smartphones.

Moreover, once people are using your app to shop for self-scanning, other augmented reality-based features can be added. For example, Search and Find or Production Information Lookup.

So when the pandemic ends, we could be left with a new smartphone-enabled brick and mortar shopping experience for both grocery and general retailers. One that is safer but also more personalized, convenient, and mobile.

Find Out How We Can Help

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