Category Archives: Industry Trends

by Jennifer Bosavage

Your Shoppers Have Gone Omnichannel. Have You?

female shopper at laptop, looking at her smartphone to check retail payment

It was a long time coming: Retailers have for many years positioned themselves with the technology and supply chains to become not simply multichannel, but omnichannel.

Whether shopping through an app, their computers or by walking through the door, customers are shopping again.

As a result of COVID, consumer behavior has changed, with e-commerce gaining steadily in popularity. During the pandemic, online buying increased by leaps and bounds: A survey from PYMNTS found that roughly 36% of consumers were buying goods online in the second half of 2020, up from 29% in mid-April when most brick-and-mortar stores were locked down.

The Statista Digital Market Outlook reports that total revenue from e-commerce in the United States came to $431.6 billion in 2020, and estimates that by 2025, revenue will rise to $563.4 billion.

Combine that with the U.S. Census Bureau’s findings that consumers spent $211.5 billion online during the second quarter of 2020– a 31.8% increase quarter-over-quarter–and it’s clear that shoppers have embraced the convenience of e-commerce.

Embracing Digital Sales

While COVID-19 propelled brick and mortar retailers to get creative with their approach to sales, it was the catalyst for some shoppers to take their business digital.

According to a March 2020 consumer survey by Statista, nine percent of U.S. consumers bought a product online for the first time ever due to physical distancing and quarantine mandates during the pandemic.

And although brick and mortar retailers may have long had online components to their shopping experiences, COVID-19 forced many to try to integrate them into the in-store experience, including buy online, pick up in-store offerings and curbside pick-up.

For some retailers, omnichannel operations were assembled quickly as a way to keep revenue coming.

Now, as retailers are reopened and slowly lengthening their hours of operation, they have the time and experience to make adjustments for the long-haul, rather than just meeting the needs of the moment.

To standardize operations and make them scalable, retailers will need to optimize use of their technology. The Retail Pro Prism POS and retail management software acts as a platform for unifying data across channels and helps retailers manage omnichannel tasks in-store, including curbside pickup and order management.

Mobile POS for curbside shopping

With the web-based Retail Pro Prism software, retailers get full POS functionality on the mobile device of their choice and integrated EFT to complete the transaction where it began – whether on the salesfloor or sidewalk.

Retailers with using Retail Pro Prism POS on mobile devices can be ready at any time and in any place to take credit or debit card payment for items, and the shopper can stay outside.

mPOS systems can also be used for curbside pickup, a solution crafted out of necessity but now — without a doubt– certain to stay. The ease of convenience of curbside pickup is not lost on anyone who has ever done errands with a toddler.

Order management & data visibility across channels

black woman standing at a desktop displaying an inventory spreadsheet and chart

Around the globe, people have changed their shopping habits in response to COVID, and retailers are needing to streamline order management across channels.

In Vietnam, more customers are shopping online and ACFC as the market leader is doing its best to bring a convenient shopping experience to its customers by launching the company’s eCommerce platform, Magento, as part of its New Retail program.

ACFC has more than 200 stores in major city centers across the country, and it plans to expand soon to 250. It is the exclusive retailer of well-known brands including Nike, Gap, Banana Republic, Tommy Hilfiger, Calvin Klein, Levi’s, Old Navy, Mango, Dune London, Cotton: On, Typo, Owndays, Parfois, Mothercare, Fitflop, OVS and French Connection.

With service from their Retail Pro Business Partner, LBC International, ACFC has successfully integrated Retail Pro Prism with the company’s eCommerce platform, helping the retailer satisfy the increased demands of shoppers who prefer to buy online and pickup in-store through the interface between the two systems.

“With data integrated between Retail Pro Prism and our ecommerce, it is easy to keep track of inventory and display online whether an item is out of stock or ready to be picked up, resulting in less frazzled associates and happier customers,” commented Vo Thi Phi Phuong, Managing Director at ACFC.

“When customers buy and pay on the eCommerce website, that order information is sent to Retail Pro Prism at the store, and the goods will be picked and packed, ready for customers to collect. The transaction data is also being captured, so stores will collect data on which styles are popular, which will influence product orders in the future,” explained Ms. Vo. An omnichannel retail strategy strengthens the customer experience and provides more avenues for shoppers––whether it is on mobile, web or in physical stores.

Going to the

2022 Retail Technology Show?

26-27 April 2022 | Olympia, London | Stand 6e28

About Pinnaca Retail & IT Solutions

Founded in 2015, Pinnaca Retail & IT Solutions is a family-run business offering retail solutions, specialist management consultancy and IT services. Our company is UK based, with offices in London, and a client base across the globe.

We work with all levels of business to define and develop strategies focused on our clients’ needs and objectives. Our tailored solutions are developed and optimised to fulfil your key business demands.

Over time we have added to our 20 years’ experience in the field and built up a team of experts, with a wide range of experience and in-depth knowledge, who are eager to help your business succeed and grow.

About DataScan Retail Systems

Datascan Retail Systems are a leading UK and European supplier of solutions to the retail sector, from small businesses through to mid-tier and international enterprises. We have vast experience in the analysis and design of retail IT and the implementation of EPOS and Stock Control Systems and provide all the services required to plan, implement and maintain an effective Retail Management System. We are committed to match the Retail Pro System to the exact needs of the retailer, utilising our development, training and help desk teams.

About RIOT

RIOT is turning traditional RFID solutions for retail on their head with RIOT Insight​. Insight is RIOT’s real-time inventory accuracy service offered as a simple but powerful add-on to a retailer’s existing systems. 100% inventory accuracy to support Omni-channel is now yours on demand.

About PAR

PAR Technology Corporation provides industry leading software and hardware solutions that are always there when you need them but never in your way.

  • State of the Art Point of Sale Systems.
  • Tablets and Portable Devices.

About XRetail

XRETAIL is a Global leader in Unified Commerce solutions, with a prime mission to empower enterprise retailers by helping to boost their sales and retain their clients. Through state-of-the-art technologies, integrations, and solutions, the XRETAIL platform creates unified sales channels including eCommerce, Mobile commerce, and Social commerce. XRETAIL’s Cloud-based platform creates seamless end-to-end solutions allowing enterprise retailers to blend brick-and-mortar and digital retailing into one unified platform, with notably enhanced customer experience both online and offline.

About Loqate

Combining leading technology with the richest data, Loqate provides several solutions to help bring businesses across the globe closer to their customers:

Address Validation
A faster, easier way to capture and verify addresses in real-time for your online forms and checkouts.

Email validation
Increase email delivery rates, boost customer marketing and reduce bogus registration when you verify email addresses upfront.

Mobile & phone validation
Take the guesswork out of reaching customers. Capture the right phone number, mobile or landline at the point of entry.

Data maintenance
The foundation of any customer management strategy, Loqate’s cleansing and maintenance software helps build lasting customer relationships.

by Ulyana Avetisov

Augmented Reality and Social Shopping: Better Together

Design photo created by rawpixel.com – www.freepik.com

Augmented reality – once associated with the wearing of clunky glasses and feeling disoriented – is finally coming of age. By teaming up with social media, brands have successfully implemented AR to allow prospective customers to virtually “try before they buy.”

Augmented Reality goes social

Heart photo created by rawpixel.com – www.freepik.com

The social media platform Snapchat may have pioneered it, but Facebook, Instagram, Pinterest and TikTok quickly followed with their own lenses, filters and effects. And retailers from Target to Gucci have realized its value not only for entertainment and brand awareness, but also for selling products.

The technology was given a huge boost in the wake of the retail lockdown last year, a result of the COVID pandemic.

Stuck at home and bored, would-be shoppers wiled away the hours with AR filters and lenses available on social media. Advertisers soon took notice of how filters and lenses could be used for virtual try-on and other experiences.

Seeing how that pair of Gucci sneakers is as easy as pointing a cell phone camera at your feet. And experimenting with makeup is much less messy using Sephora’s Snapchat lens.

Developments in AR

While the technology has improved greatly recently, there are still some limitations.

For example, while a customer can visualize just how stylin’ those kicks will be, AR can’t size the shoes. That’s unfortunate, because returns are a huge sore spot for retailers, particularly those selling apparel. The issue is that today’s cameras depth perception can’t accurately determine size.

Once AR technology improves enough to reliably size clothing, demand will likely skyrocket; currently, Snapchat says it has 200M daily AR users. That could translate into millions in revenue.

Social shopping to drive in-store traffic

Well-established brands such as Sephora have the best of both virtual and physical commerce. Using Snapchat, customers can take and share pictures of themselves trying on new makeup styles.

Social shopping lets the customer’s friends weigh in on the buying decision, and the product can be purchased directly through the app.

But the experience online helps to drive in-store traffic as well. Creating a fun, memorable AR experience on a social network helps customers remember the brand, which can prompt them to visit it in-person.

Those companies become “top of mind” for particular types of products. In addition, social shopping apps can promote store events and are effective for location-based marketing as well.

Snapchat’s “ephemeral” nature helps create a sense of urgency and builds a sense of exclusivity. Today’s Generation X shoppers in particular crave exclusivity and limited-time offerings.

AR can attract the “right” buyers by providing an engaging customer experience on social media platforms. That interactivity can benefit a brick-and-mortar channel as well, by bringing attention to the brand as an innovator willing to meet customers’ needs in person as well as virtually.

2 Retail Uses of Artificial Intelligence in a Post-COVID World

Contactless payment and Augmented Reality: CX aids during COVID

by Jennifer Bosavage

Why in-store fulfillment is a must for retail & how to pull it off with less resource strain

Photo by: https://burst.shopify.com/@matthew_henry

Today’s customers are looking for a seamless purchasing experience, whether that’s in-store, online, or a combination of both. But the so-called “last mile” — the time it takes for a shipment to reach a customer —can be a thorn in the side of a retailer. Enter in-store fulfillment. 

Benefits of in-store fulfillment

curbside fulfillment - girl wearing mask holding shopping bags sitting against her open trunk

Mounting shipping costs are costly for retailers who are reluctant to pass them along to customers who are looking for the best price for every item, as well as free shipping. 

By offering in-store fulfillment, the delivery process can be seamless as customers choose from curbside delivery, click and collect, and buy online/return in-store options. 

Employees can address customer requests in real-time, monitor inventory, and deliver attentive service.

In-store fulfillment means retailers no longer have to route products exclusively to a warehouse.

Nordstrom and Kohl’s are excellent examples of putting the strategy into practice. 

They can fulfill orders from the store closest to the customer’s location, leveraging their stores as fulfillment centers and shipping orders directly to customers, reducing costs and speeding up deliveries.

Requirements for in-store fulfillment

sales associate executes sale fullfullment using Retail Pro Prism POS

While the benefits are clear, implementing in-store fulfillment requires an omnichannel strategy in which inventory data is tightly integrated across ecommerce and the in-store POS. 

Ship-from-store, ship-to-store, and in-store pickup can then be handled with one solution that optimizes in-store inventory usage and reduces the time and cost for fulfilling online orders.

Perhaps the most daunting part of the process is getting a 360° view of inventory by connecting data from e-commerce sales with in-store transactions. 

Determining the correct timing for syncing online data and orders with in-store POS is vital; solutions can be configured to sync data at any interval, including real-time, hourly, nightly, or at other intervals that make sense for a retailer’s operations and network capacity.

If syncing lags, inventory can fall behind, and there’s a risk of selling out of products that have already been committed to online orders. 

With seamlessly connected channels, shoppers can buy products online and pick them up in the store that same day. 

Store associates can receive pick lists to select and package the products ordered online. 

Selecting off-the-shelf products increases inventory turn and decreases the duplication that comes with holding a separate online order inventory.

In-store fulfillment completes the frictionless purchasing experience. 

Customers get quick, free delivery — often receiving their items even faster than ordering online. 

Retailers, in turn, move inventory more rapidly, helping to maintain price stability. 

Both shoppers and retailers benefit from a more efficient customer experience.

delivery man holding box up as person receiving it signs an ipad

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safe retail shopping during COVID

In-store shoppers, in-store fulfillment: Planning for inventory challenges

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How To Simplify Omnichannel with Inventory Management in Retail Pro

by Jennifer Bosavage

DTC brands have a big impact on traditional retail

modcloth, bonobos and jet logos in a walmart shopping cart, harry's, casper, and care/of in target shopping cart. DTC brands impact traditional retail

Direct to consumer (DTC) products have been wildly popular in the past few years, and as they slowly infiltrate big box retailers’ shelves, brands such as Casper, Harry’s and Bonobos are gaining more attention and getting an even bigger sales boost.

But traditional retailers are learning from them as well.

For the biggest retailers, partnering with DTC has been mutually beneficial. Walmart bought men’s fashion retailer Bonobos in 2017 for $310 million. Target is partnering with Harry’s to sell the well-made, discount-priced razors in stores, as well as Casper mattresses — which can also be found in top-tier stores such as Nordstrom’s.

Mutual gains

two businessmen shaking hands - DTC brands impact traditional retail and it's mutually beneficial

Part of the draw of those and many other DTC brands is their popularity: They will drive customers into stores and online. Forging partnerships with newer, more sought-after brands helps retailers attract and create relationships with a new segment of shoppers who may not have otherwise shopped with them.

In addition, what big retailers such as Walmart, Target and Nordstrom’s can gain from well-established DTC brands is digital expertise. These products have successfully launched and sold products online with no physical stores. They are marketing powerhouses, and big box stores are learning from their strategies, particularly for their own private-label merchandise. For example, Target’s partnership with Harry’s spurred it to step up its men’s grooming selection by expanding its own Goodfellow & Co’s offering to more than 30 products. (Target is clearly focusing on the segment and rounding out its offerings by also incorporating Ulta Beauty shops this year into 100 locations this year.)

Fluid shopping

dark skinned woman with big short curls wearing orange shirt shopping on laptop on couch, DTC brands impact traditional retail - teaching big box stores about online marketing

What these relationships mean for consumers is that brands and retailers are becoming more attuned to the future of shopping. Customers are fluid in how they want to shop: One day they may opt for a personal, immersive experience at Sephora and the next they’ll order lipstick online. Convenience is a driving force, but it doesn’t always mean ecommerce. Sometimes, convenience is the ease of being able to go to a physical location and try on, inspect, and ask questions.

Successful retail has always meant providing what customers want, when they want it. Today’s technology merely widens the possibilities, and requires retailers to be intuitive and flexible.

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by Ulyana Avetisov

Specialty brands partner with big box retail to boost foot traffic—and sales

It’s a retail conundrum: Foot traffic in malls is decreasing, and brick and mortar stores are losing ground to ecommerce – yet shoppers still want to visit stores to touch and try out products before buying.

To capture more sales and remain relevant to shoppers, big box stores are thinking out of the box and partnering with popular name-brand product manufacturers.

Bringing Apple to you at Target

rendering of mini apple store in all white target store with light wood kiosk and shelves. Featuring black male worker behind the kiosk in red shirt wearing a mask greeting a white lady customer wearing a mask approaching
Image from Target

Target recently announced it will double the size of Apple’s footprint in 17 locations, expanding offerings in stores and online. In addition, Target team members will receive specialized training from Apple.

The retail behemoth has also partnered with Ulta Beauty to open 1,000-square-foot beauty shops, which will be staffed with Target employees who have been trained by the beauty retailer.

Notably, Ulta also provides customers with many services such as in-store hair salons, which drive considerable foot traffic: Salon customers reportedly make twice as many trips to an Ulta Beauty store as those who do not use those services.

And Target isn’t the only big box store looking to pretty itself up: Kohl’s will open 200 “Sephora at Kohl’s” locations this fall, with at least 850 locations planned by 2023. The cosmetics retailer will launch on Kohl’s website in 2022, offering more than 100 beauty brands, some of which are exclusive to Sephora.

Products across price points

smiling blonde salesgirl in all black holding product up for a customer

The beauty segment is notable because America’s department store makeup counters have historically been the place to purchase upper-end cosmetics.

The American beauty counter is iconic.

However, they’ve gradually been losing popularity as shoppers prefer to visit specialized retailers – such as Ulta and Sephora – which can provide a more extensive variety of products at different price points.

However, by collaborating with those same cosmetics retailers as well as be increasing their in-store footprint, department stores could win back many of those customers.

Department stores are using the popularity of brands such as Apple, Sephora and Ulta to lure customers back into their stores.

Once inside, the customers can be tempted to continue shopping for other products.

In a way, department stores function like mini-malls: From motor oil to bikinis to wrapping paper, these stores have it all.

The tough part today is getting the shoppers to come into the store.

The addition of top brand names will help provide the visibility needed to get shoppers in the automatic door.

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by Jennifer Bosavage

Post pandemic, big retailers think small

couple pan shopping wearing masks
photo by Anna Tarazevich

One of the big reveals during the past 13 months is that people need (and want) to shop, and that e-commerce filled that desire both for necessities and luxuries.

Small, neighborhood businesses with no online presence had the toughest time surviving, while online stores with brand recognition — ironically, often due to a brick-and-mortar presence — fared the best.

Most strikingly, big, traditional shopping mall “anchor” stores felt the sting of greatly reduced foot traffic, while also enjoying a significant uptick in e-commerce revenue.

For example, Nordstrom forecasts sales to increase more than 25% this year, with digital accounting for roughly half of all revenue. Malls have been losing foot traffic for years. Moody’s industry research arm Real Estate Solutions (REIS) forecasts that malls vacancy rates will reach 14.6% by the end of the year as retailers regroup post-pandemic and reconsider their store locations.

Brick & mortar format shift

two young women wearing face masks in a concept nike store look at a jacket one is holding up
Photo by RODNAE Productions

And yet, customers consistently report enjoying an in-person shopping experience. Nothing truly can replace an experience of being able to touch and feel merchandise.

A case in point is the venerable Macy’s department store, a 162-year-old retail institution, which announced a year ago it would be closing 125 stores in “lower-end” malls during the next three years.

Macy’s strategy was to focus on locations with stronger sales as well as online operations. Then came lockdown and the pandemic era, and as shoppers tried to avoid malls, stores found ways to adapt.

Macy’s mall exodus is not unique; Dillard’s, J.C.Penney, Kohl’s, and Belk are also reportedly looking at freestanding and strip center locations.

Nordstrom, too, has been successful with its small format stores and intends to continue expanding those outlets along with its digital presence as part of its “Closer to You” long-term growth strategy.

Small stores, customer-forward strategies

Photo by Taras Chaban

According to reports, the stores will have full-service and possibly self-checkouts as well as same-day deliveries.

In addition, they will offer “buy-on line, pick-up in store” or “click and collect” service, which often comes with curbside pickup.

Such smaller stores are embracing the concept of offering a curated product selection, a characteristic more often associated with luxury stores. It provides these large retailers an opportunity to be flexible, react more quickly to buying trends and become more relevant to today’s clientele.

By showing a willingness to experiment with innovative merchandising ideas, these prominent retailers may not only rediscover their place in the industry, but also once again become leaders.

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by Jennifer Bosavage

Gartner: Retail’s role in sustainability improvements

woman shopping in store

Increasingly, retailers are learning that sustainability matters to their customers, and the COVID season did not stop sustainability efforts.

Recycling, energy conservation and reduction of waste are all everyday topics of conversation.

That desire to help conserve Earth’s resources has helped unite customers who may otherwise be very different from one another.

To meet the increasing requests from customers for carbon-neutral packaging and products, retailers are offering more environmentally friendly options. Gartner has recommended three ways retailers could improve sustainability within their supply chains: source responsibly; use recyclable or minimal packaging; incorporate “recycled goods” into product offerings.

Source Responsibly

Image:  Tom Fisk 

Retailers can choose vendor and distribution partners who practice sustainability.

When reviewing vendors, retailers can weigh sustainability as quality.

Sustainability includes processes that mitigate the harmful impacts of pollution and waste on the ecosystem, including reducing freshwater contamination and greenhouse gases.

Retailers benefit too, because sustainable practices such as decreasing energy usage, cutting back on waste generated and eliminating equipment for pollution control lower operating costs.

Packaging

Image: Karolina Grabowska

Many suppliers are coming up with innovative packaging to reduce waste.

For example, dental floss can now be purchased in reusable glass vials, rather than hard plastic packages.

Not only has the product cut back dramatically on waste, but because of its very nature, it creates its own pool of customers who return to buy the floss replacement on a regular basis.

On the recycling side, L’Oreal cosmetics will market its first cosmetics in recyclable paper bottles to consumers this year.

“Re-commerce” Goods

Image: Nataliya Vaitkevich 

Thrifting — or shopping secondhand—is in vogue, and not solely because items are bargains or bespoke.

Because these goods are living a second life, they aren’t taking up room at the local landfill.

In addition, significant amounts of resources are saved by not creating a new product. For example, making a pair of jeans uses approximately 1,800 gallons of water.

The production process also generated greenhouse gases equal to driving more than 80 miles.

A number of retailers are focused on the “re-commerce” market, such as ThredUp and Poshmark, but some clothing brands including REI and Patagonia are selling their own gently used clothing, similar to the way in which luxury automobiles have sold “certified pre-owned vehicles” for many years.

Retailers wanting to strengthen or embark on a sustainability program should ensure their suppliers are committed to the same long-term vision.

Increasingly, customers are looking to buy from retailers and brands that share their values, and that includes companies that recycle, reduce waste and promote sustainable business practices.

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Millennials: the force driving thrifting’s upsurge

by Jennifer Bosavage

Retailer innovations during COVID aim to keep customers happy

Excellent customer service has always been the hallmark of well-established, highly respected retailers.

Nordstrom’s, Zappos and Trader Joe’s are a few of the best examples of retailers that make concerted efforts to make and keep customers happy.

Before 2020, many retailers were happy to let those top-rated companies be the standard bearers for superior customer experience.

Meanwhile, many retailers continued servicing customers with no real CX roadmap.

It appeared to the uninformed that the return on investing in the customer service wasn’t worth the time and money spent.

And, the truth was, mediocre customer service was tolerated – until COVID came and retailers were forced to answer a deluge of customer questions and provide new services without much preparation.

In 2020, customer service became the only thing that mattered to customers.

COVID led to an expanded definition of customer service

Image: Anna Shvets

Shopping last year meant dealing with lockdowns caused by COVID-19.

The global pandemic made getting to stores difficult, so, at first, many if not most customers were ordering online.

And while those retailers may have believed they dodged the CX bullet, they were in for a surprise.

Retailers learned the customer service is not simply to answer questions about shipping and billing, but it is also to offer information and help for those struggling with the Coronavirus.

Customers may be desperately searching for products or information on payment options because can’t pay a bill, or are otherwise frustrated by the pandemic hindrances to getting products they need are reaching out via texts, online chat and phone calls.

This year, Forrester predicts customers will continue to look toward retailers for sympathetic customer support.

Forrester Principal Analyst Ian Jacobs recently wrote, “With U.S. unemployment peaking in April, millions of individuals found themselves struggling to pay for food, bills, and other necessities. Organizations must react to provide high-quality, emotionally sensitive customer support in the flexible ways that consumers need.”

In Forrester’s retail predictions for 2021, Jacobs said digital customer service interactions will increase by 40%. That gives retailers many more chances than ever before to prove their mettle.

Self-service options improve customer experience

One way to improve CX, ironically, is to offer more self-service opportunity.

Customers have reported liking to use self-service options, if the process is quick and easy.

In a word, it must be frictionless. For example, a capable site search tool can be invaluable for customers.

Likewise, chat bots are particularly helpful for providing succinct answers quickly; in addition, bots with the power of artificial intelligence bots can reflect whatever personality a brand wants to project.

Adding relevant services based on discerned customer needs

Image: Laura James

Another way to differentiate customer service is to launch a virtual service based on fulfilling a defined need.

Online pet supply provider Chewy, for example, has seen a huge surge in business during the coronavirus pandemic.

But its newest offering, a telehealth service for pets, was launched in response to customers telling service agents about their pet’s problems – while they are ordering food, treats, toys, etc.

The virtual service was on the roadmap for years down the road, but the company saw the need was for now, and launched in October.

Which services will carry on beyond COVID?

Image: Anna Shvets

This year, consumers will let retailers know which innovations will “stick,” and become part of their future shopping expectations.

Top of mind are questions such as: Will the evolution of click and collect to curbside delivery remain a shopping option? Will jewelers continue to offer virtual consultations? How will retailers be able to support the expansion of the sales channel without spreading their staffs too thin?

Those and many others will be answered by 2021 shopping patterns. And perhaps some new “kings of customer service” will be crowned.

safe retail shopping during COVID

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by Jennifer Bosavage

Contactless payment and Augmented Reality: CX aids during COVID

Image: Karolina Grabowska

During the past year, brick and mortar retailers have struggled with encouraging people to visit their stores while keeping them as safe from COVID-19 as possible.

In addition to limiting the number of shoppers inside and enforcing mask-wearing mandates, contactless payments and augmented reality have suddenly seen significant growth as aids to shoppers’ experience in stores.

Contactless payments

Image: Cottonbro

According to the “Visa Back to Business Study – 2021 Outlook,” 56% of consumers have used contactless payments whenever possible in the past three months, making it the biggest shift in terms of shopping habits during the pandemic.

This past June, only 20% of SMBs had offered contactless payments; a few short months later, 39% have started to accept new digital forms of payments.

And a vast majority — 74% — expect consumers to prefer contactless payments once a vaccine is widely available.

In fact, the study found that 65% of consumers said that post-vaccine they are likely to continue to use contactless payments at least as much as they are currently.

Those numbers skew by generation: Millennials are the most likely to embrace contactless payments.

However, all age demographics seem to have a level of interest in contactless payments, perhaps due to the sanitary nature of the system.

Because of its wide acceptance—61% of Boomers have expressed a preference for contactless, according to Visa—it is likely here to stay.

Augmented Reality

Image: Fauxels

With consumers preferring to avoid contact even briefly during the payment process, it’s no surprise that dressing rooms are standing empty or even locked.

However, shoppers who try on clothing are much more likely to buy, so some retailers have replaced their shuttered fitting rooms with virtual ones.

In-store, shoppers can stand in front of a camera and see themselves on a large screen. They then select different products for their virtual self to model, allowing themselves to see exactly how they’d look in the selected outfit without having to try on a single piece.

Those mirrors could one day be linked to social media, which will provide an enriched interactive experience.

For retailers with an online presence, adding a dressing room widget to their websites allows customers to upload a single photo to instantly see themselves in selected clothing.

Using augmented reality to facilitate virtual try-ons also helps retailers reduce return rates.

As they head into 2021, retailers will be further developing those types of technology solutions, which helped get them through the pandemic.

Strategies that include contactless payments and AR will find expanded uses as the economy reopens in the second half of the year.

woman sits in bed with laptop on her lap and smartphone in her hand

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US retail’s recent rush to adopt contactless payments

by Jennifer Bosavage

US retail’s recent rush to adopt contactless payments

Image: Pixabay

The COVID-19 pandemic has motivated retailers to turn to technology to help their businesses plan better, increase productivity, and service their customers.

Contactless payments are one of the areas that, because of COVID-19, will change forever the way retailers do business.

Safer and faster checkout

safe retail shopping during COVID
Image: Anna Shvets

These RFID-enabled payments have been available for years but have surged in popularity during the pandemic.

Not only is contactless more hygienic – in the time of COVID-19, no one wants to touch cash that’s been touched by hundreds of strangers – but it also streamlines the entire checkout process.

While the pandemic may have provided a strong push toward a cashless society, customers could still choose to use a traditional payment card, rather than NFC technology, and be safer from virus exposure during the transaction because they are operating the card reader rather than handling cash.

However, because they use radio-frequency identification, contactless payments reduce time waiting in lines.

The “tap-and-go” process generally results in speedier transactions. While the transaction time for a chip-enabled card can take as long as 30 to 45 seconds, a contactless transaction can be as short as 10 to 15 seconds.

Global adoption of contactless payments

Contactless transactions build upon RFID and typically use NFC technology, the foundation for services such as Apple Pay and Google Pay.

Globally, this method of payment is very popular. 

The United States, however, has been slow to adopt contactless payments.

In 2018, only 3% of cards in use in the United States were contactless, compared with 64% in the United Kingdom and up to 96% in South Korea, according to global management consulting firm A.T. Kearney.

Even prior to the pandemic, Juniper Research reported that contactless payments would triple to $6 trillion worldwide by 2024, up from roughly $2 trillion this year.

OEM mobile wallet transactions were predicted to increase as banks expanded the use of contactless cards. 

In the U.S. market, contactless transaction values were expected to rise at an even higher rate than the global market, reaching $1.5 trillion by 2024, compared with the approximated $178 billion in 2020. 

Once COVID-19 hit, contactless payments began to surge.

By August 2020, the global contactless payment market was valued at $ 1.05 trillion by 2019 transaction value, and is now predicted to register a compound annual growth rate (CAGR) of roughly 20.01% between 2020 and 2027.

Today, the global contactless payment market value is expected to surpass $ 4.60 trillion by 2027.

Customers have enough friction getting out to the store today. By offering contactless payments, retailers can provide an efficient, safe method for purchasing goods and services while enhancing the customer’s overall experience.

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