How Retailers Can Capitalize on Last Year’s Giant Step Toward Digitization
Think back to a year ago: the COVID-19 lockdown was in full swing. Many of our routines and habits were turned on their heads, including how we worked, learned, socialized and shopped. In the months since, how have your behaviors toward retail change?
While consumer shopping behaviors were shifting quickly, so, too, were brick-and-mortar retailers’ selling habits as they adopted new strategies and technologies to meet consumers’ needs. Buy-online-pickup-in-store (BOPIS), for instance, became a game-changer for retail giants including Walmart, Target, and Best Buy. In-store shopping restrictions and safety precautions that enable touchless transactions were suddenly the norm. Next-generation retail technology became a must-have rather than a nice-to-have for survival.
And even though consumers across the nation are getting the COVID-19 vaccination and venturing out into stores more, these new shopping habits and retail technologies are here to stay. As such, now is the time to invest in the newest — and safest — technologies that will enable retailers to thrive.
Evolving with the Changing Shopper
McKinsey & Company found that pre-pandemic, nearly 98% of U.S. grocery store sales took place inside a supermarket’s four walls. And while curbside pickup and home delivery certainly increased during the height of COVID-19, 85% of sales still occurred inside stores.
Consumers crave normalcy and want to shop similarly to how they used to. However, retailers must make shopping safe by doing things like requiring masks, providing hand sanitizers, implementing one-way aisles and limiting the number of shoppers inside the store at one. They must also use newer technologies that promote touchless transactions and safety.
There’s been a massive shift to self-checkouts — a safer and oftentimes quicker shopping option. In fact, 79% of consumers intend to continue or increase self-checkout post-pandemic. It stands to reason as they provide a faster, easier checkout process, especially during busy times of the day when lines get long.
Walmart — no stranger to self-checkout lanes — last year introduced an experimental store in Fayetteville, AR, where checkout lanes are replaced with full-service self-checkouts. Customers can checkout themselves or choose to have a host ring up and bag their items.
To meet consumers’ changing preferences for speed combined with safety, retailers should invest in some form of self-checkout. They should also consider providing a mix of in-store and online shopping options.
Omnichannel Will Be Even More Omnipresent
Although consumers enjoy browsing the aisles of brick-and-mortar stores, they also love the freedom that omnichannel options provide. Even the most digitally resistant customers experimented with shopping and delivery options last year and will continue doing so. They’re used to the ease and convenience of ordering on a laptop or mobile device and having items delivered or picking them up curbside or at an in-store locker. In fact, 15% percent of people are using BOPIS more and 60% of them plan to continue.
Plus, reducing physical touchpoints in the store — enabled by curbside, lockers or contactless payments — protects customers and employees. Eighty-two percent of respondents of a 2020 Mastercard global consumer study say contactless is the cleaner way to transact.
These options are safer, and when consumers feel retailers are taking steps to keep them safe, customer loyalty increases. The way a brand deals with and ensures the safety of its customers, employees and the community as a whole will leave lasting impressions in consumers’ minds.
According to The Experience 2030 Pulse Report: The Acceleration of Digital Engagement, Personalization and Trust, significant pandemic-induced shifts have occurred and what drives loyalty today is different than before COVID-19 – 65% of consumers want retailers to ensure social/physical distancing in a facility.
Investing in technology can help retailers meet consumers’ desire for feeling safe when shopping.
Technology Will Reshape the Future of Retail
Seven out of 10 retail companies are accelerating their digital transformation in one way or another. Some stores are multitasking as multi-use, click-and-collect touchpoints, while others are employing people to shop for consumers who aren’t willing to come in stores for safety reasons.
Still, other retailers are experimenting with things like cleaning robots or electronic shelf labels, which enable digital price-setting and reduce the need for employees to check manually.
The way retailers buy and consume technology is changing, particularly since cloud subscriptions provide them with flexible payment options and eliminate the need for costly up-front investments. This is a welcome change, especially since shifts in consumer expectations — and the customer experience — are driving retailers to invest in technology as it enables them to remain competitive.
Take touch-free payments for instance: A study by Forrester and National Retail Federation found that consumers’ increased desire for contactless payments have been driven by the pandemic. One-fifth of consumer respondents indicated they made their first contactless payment during the pandemic, and 57% said they will continue to do so once it’s behind us. The same study showed that in 2020, 58% of retailers accepted contactless cards — a 40% increase over 2019.
The bottom line is this: Retailers that innovate — whether through BOPIS or self-checkout or contactless solutions or another newer method — and anticipate customers’ changing habits will be the ones to succeed and set the stage for the customer experience of tomorrow. They will be the ones who will make up for last year’s lost proceeds and continue bringing shoppers back for more.
David Wilkinson is president and general manager of NCR Retail.
Many of the holiday weekend receipts still need to be tallied, but a look at the early results indicate what many have been predicting: Consumers are looking to stores for experiences but heading online for conveniences.