Contactless Convenience Is the Next Normal
Once you experience something new, there’s always a chance you’ll try it again down the line. If you experience the same thing a few times, and become familiar with it, you will likely form a habit. It’s in our nature to seek out what we know. As a result of the pandemic, people have developed new habits during distancing. Will the consumer habits formed in the new normal carry over into the next?
To find out, SYKES for FinTech recently conducted a survey to assess new consumer trends and discover how Americans view the next normal. SYKES polled 3,000 adults about their experiences with contactless financial technology (FinTech), like mobile banking, as well as touch-free purchasing, curbside pickup, delivery services, and other contactless customer experiences. The survey responses, collected in our report, offer insights into the marketplace of tomorrow.
Macro Reliance on FinTech
Perhaps unsurprisingly, Americans are increasingly using and relying on FinTech like mobile banking, direct deposit, and contactless payment as a result of Covid-19. While many mobile or touch-free services are not new, they’ve undergone massive expansion thanks to increased use as Americans seek to reduce direct human contact while continuing to manage their personal finances.
Of our respondents who reported using touchless payment apps like PayPal, Apple Pay, or Venmo, 11% said they used the apps for the first time in response to the pandemic. In addition, 37% of all respondents and 43% of respondents in the 55+ age group ordered groceries online, or through an app, for the first time ever. Merchants are embracing digital-first strategies, which have paved the way for digital payments. (PayPal just reported its best quarter in the history of the company).
While consumers are likely doing a lot of “firsts” in response to Covid-19, psychology tells us that as long as customers have good experiences, they’re likely to repeat these new behaviors. The familiarity principle, or mere-exposure effect, leads us to believe customers prefer to engage with the brands and apps with which they’re familiar. So, as safety-conscious consumers flock to contactless solutions now, there are durable signs that consumers will keep them due to convenience later.
Consumers Are Adopting Convenient At-Home Services
Beyond banking, consumers in all age groups are increasingly opting for safe, convenient services from home. Interestingly, a significant number of Americans, and a large number of younger respondents, are shifting away from the traditional brick-and-mortar grocery store. Twelve percent of all respondents and 21% of those age 25 to 34 state that they’ve signed up for a meal kit or grocery delivery service since the start of the pandemic.
It isn’t just food, either. The world of online fitness is also steadily growing, with new users young and old, as 10% of all respondents (and 17% of respondents age 18 to 24) say they’ve now subscribed to virtual fitness classes, like at-home yoga, cycling, or streaming aerobic classes.
Perhaps the most important takeaway, users of all age groups are reporting that they intend to continue using contactless services after distancing measures ease. Forty-four percent of respondents age 25 to 34 and 29% of the 55+ age group reported that they will likely purchase more items online or through an app than they did pre-pandemic.
Looking ahead, if these online, contactless goods or services prove more convenient, or possess better value to the average consumer, it seems likely that consumers will continue to use them going forward.
Contactless Convenience Is the Future
According to the SYKES for FinTech survey, 12% of all respondents, as well as 19% of respondents in the 18 to 24 age group, claim that they will only use contactless payment options for future purchases. Does that mean consumers will flat-out ignore businesses that fail to offer certain payment options? It’s entirely possible.
Studies show consumers consistently value convenience over other variables. In fact, according to a recent National Retail Federation poll, 97% of respondents reported abandoning a purchase in the past based on an inconvenient purchasing process. That means lost revenue. According to the same NRF poll, more than half of polled consumers stated that they were willing to pay more money for added convenience. Based on the data, if a product, payment option, or customer experience is more convenient, consumers are willing to pay a premium. Companies like Uber Eats, GrubHub, and Postmates are proof of the convenience-over-price concept.
While plenty of people might prefer to return to how things used to be, it’s clear to most that there has been a monumental shift for the long term. The continued existence of Covid-19 and the habits consumers have formed as a result, will require retailers to innovate toward convenience or risk losing customers for good.
Consumer habits of today have already affected the marketplace of the future. Retailers who learn from consumer trends and work toward offering more convenient options for delivery, payment, or otherwise are likely to succeed no matter what the next normal has in store.
Hilary Hahn, vice president of emerging brands and FinTech at SYKES.