The changing face of retail post COVID-19

The changing face of retail post COVID-19

For years now, brick-and-mortar stores have been faced with the challenge of competing with online competitors that may be offering a broader range or cheaper products. The result, says Paulette RoweCEO, integrated & eCommerce solutions at Paysafehas been a decline of footfall on the high street.

So creating a customer experience in-store has been key to survival, and many businesses have invested heavily into this concept to stop the eCommerce takeover.

Before the COVID-19 outbreak, there was a very clear strategy for delivering a superior in-store experience. This focused on attracting customers into the store, and creating experiences that engaged with them on both a physical and emotional level that online retailers could not compete with. Tactics to achieve this included personalised shopping assistance, free testers, in-store only offers, or even culinary treats.

However, the pandemic has decimated this strategy, because today the opposite must be the primary concern. In the main, consumers are still rightly wary of the dangers of indoor interactions, so with government rules on the number of visitors in a store at one time, one-way systems in place, and health concerns at the forefront of shoppers’ minds, making the shopping experience safe and frictionless as possible is now key to the future of in-store.

The evolving checkout

Despite the introduction of one-way systems, reductions in customer services interactions, and other in-store social distancing measures, there is still one element of in-store shopping that remains the greatest potential bottleneck to a safe experience; the checkout. For this reason having the right payment options available is crucial to entice consumers back to the high street and through the door.

According to research from Paysafe’s latest Lost in Transaction report, 11% of consumers said that during the height of the pandemic they were no longer shopping in stores at all (18% of shoppers also said that they shopped online for the first time during COVID-19), and a further 30% said that they were using only contactless payments wherever possible to limit interactions at the checkout.

Contactless payments must be the minimum

Contactless payments must now be offered as a minimum, with more than half of all consumers (54%) saying that using contactless payments more often during COVID-19 means they are more comfortable with using this payment method.

In the UK, acceptance of contactless payments is closing in on being ubiquitous, and it became an even more attractive proposition when the value of payments that could be accepted using this method was increased. For smaller retailers that haven’t integrated this option yet the time to do so before becoming almost completely uncompetitive is certainly running out. 

But stores need to go even further

Stores were already moving towards less friction at the checkout, but the COVID-19 pandemic has made this even more of a pressing need. New experiences have emerged that are enabling consumers to shop without having to interact with staff members or queue up to pay for goods.

This might take one of several forms. Ordering and paying digitally via an app such as the ones that many bars and restaurants have installed is one example. Marks and Spencer’s Mobile Pay Go is another; consumers can scan items using their smartphone as they shop and pay through the app, negating the need to queue and ring items through a till.

In the long term, stores will need to consider even more sophisticated frictionless checkout experiences that enable customers to simply walk in, pick out what they want, and walk out, with their account being charged automatically.

Checkout convenience is key, and something stores need to get right as 38% of consumers say they are planning to shop more online following the conclusion of the pandemic, because they find it more convenient (65%) and more enjoyable (42%).

Blurring the physical and digital experience

Enabling shoppers to scan items and pay via an app, or place an order using their smartphone are examples of the blurring of the physical and digital experience. This is another trend that will accelerate in the coming years, particularly as 5G technology becomes more ubiquitous.

Technologies such as virtual reality (VR) and augmented reality (AR) will enable retailers to offer a “physical” experience digitally, such as projecting furniture into a room or trying on clothes or sampling beauty products virtually. The associated checkout options high street stores offer will need to match this level of enhanced experience.

And the growth of subscription services for physical products is another trend we can expect to see accelerate to reduce the need for physical checkouts. Pret a Manger’s recent launch of a subscription service, by which consumers can have up to five hot drinks a day for a fixed fee of £20 (€22.11)per month, will become more commonplace as retailers compete for customers.

Looking ahead

Getting the checkout experience correct is vital for stores if they want to survive. There are already proof points that large contagious diseases do accelerate transitions from physical to digital. The link between China’s SARS outbreak and the shift to digital payment methods such as Alipay and WeChat is perhaps the most striking example of this. The long-term impact of COVID-19 may prove to be similar.

Payments are no longer seen as a generic service; they must be convenient and safe. In the UK 54% of consumers have used a new form of payment since the COVID-19 outbreak began, and 84% globally admitted they were now thinking differently about how they make payments. Businesses must do the same. 

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