Contactless Pay Is the Next Big Pivot in Retail CX
Remember when Amazon launched Prime? The entire retail customer experience (CX) changed overnight — for everyone. The bookseller-turned-everything-seller suddenly offered low prices and fast and free delivery, leading traditional retailers to pivot drastically to keep up with their mega-competitor.
But sometimes, unexpected CX overhauls are a good thing — especially when competitors have to pivot, too.
The vast ramifications of Covid-19 have devastated retailers and their employees in many ways, from furloughs to shuttered businesses. And the stores that remained open implemented precautions — such as curbside pickup, mask mandates, and contactless checkout — to keep their customers safe. Of course, many accommodations are likely to taper off as cases wane, but others (such as offering contactless payments) will become permanent fixtures in the retail shopping experience — serving the dual purpose of keeping stores safe and creating a customer-centric experience tailored to their preferences.
What the Retail Survey Data Reveals
During fall 2020, SYKES conducted a retail survey to explore consumer perceptions leading into the holiday season and analyze what those perceptions will mean for retailers. Of the findings, several stand out as future indicators of consumer behavior:
- 76% are now relying on non-cash forms of payments (credit cards, mobile payment apps, digital wallet, etc.)
- 47% are more inclined to shop at brick-and-mortar stores committed to contactless payment options
- 41% are prioritizing online retailers, while
- 40% are shopping more at physical stores, despite the ongoing pandemic
Clearly, consumers aren’t ditching brick-and-mortar for online shopping — at least, not entirely, and not in response to either Covid-19 or the convenience of virtual stores. But those in-person shoppers want to be safe and have their preferences prioritized.
The lines dividing brick-and-mortar and virtual stores are foggier than ever, and consumers are simultaneously looking forward to a return to the traditional while also reaping the benefits of online shopping. How then should retailers pivot to welcome returning customers, exceed the expectations of the e-commerce crowd, and ensure the experience is the same either way?
It’s simple: offer contactless payment options.
What Contactless Payments Mean for Consumers
Contactless pay at in-store retailers may not be a direct result of Covid-19 (like, say, mask mandates), but it is being amplified as a major benefit moving forward. Not only does contactless pay remove hand-to-hand exchanges (and therefore, germs), it’s also a more secure way to buy. Tap and chip-insert technology has long been able to mask credit card numbers — therefore making them useless to thieves — as well as minimize the potential to leave credit cards at the checkout counter. Now, in the face of a global health emergency, its benefits have taken on an entirely new level of context.
The promise of safe and convenient transactions at brick-and-mortar retailers is the first step in removing the gap between the physical and the digital — the ultimate CX move. E-Commerce is on the rise during Covid-19 for an obvious reason: Those customers simply don’t want to risk exposure. Tack on the convenience of curbside pickup or free home delivery, and it would seem customers have little reason to return to physical stores. With one notable exception: They want to return to physical stores.
Of course, means to this end vary. Of the survey respondents, 22% will return when cases are under control in their respective area, 22% will return when cases are under control in the United States, and 26% will return when a vaccine is available to them. By meeting the evolving expectations for those returning customers, retailers will reap the benefits far more than non-committing competitors. Ultimately, though, adopting contactless pay encourages the return to physical stores by adopting a major draw of online stores — and in doing so, bridges the CX divide between them.
Furthermore, in light of the pandemic, consumers are recognizing how much they have to gain from advanced purchasing power, as evidenced by a summer 2020 financial technology report. When asked to predict their post-pandemic purchasing behavior, this is what they had to say:
- 37% believe they will purchase more items online or through an app
- 23% say they will rely more on same-day ordering with curbside pickup
- 12% will only use contactless payment going forward
How Retailers Should Respond to Consumers’ Plans
Consumers are no longer swayed by doorbuster sales, the touch-and-feel test, or dressing rooms try-ons in the same way they once were. The same deals (or better ones) are available online, and expedited delivery means that if a product isn’t up to expectations, or the fit isn’t right, they can simply return the item right from home. On the other hand, consumers still value the traditional ways of shopping, and when accommodated, they will go in-store.
Those lines are foggier than ever due to Covid-19, and retailers shouldn’t panic when they pivot. Instead, they should embrace the opportunity by giving their customers seamless and great experiences both online and in-store.
By implementing contactless payment options, retailers will free customers to visit brick-and-mortar stores while knowing it will be safer and more convenient than ever. This is the blend of e-commerce and brick-and-mortar that retailers have dreamed of for years and puts customers in the CX driver’s seat — however they choose to shop.
Carlos Zapatero is a Business Development Executive at SYKES.