By John Kelly
There’s no question that the coronavirus pandemic — along with the accompanying lockdowns and restrictions — forced brick-and-mortar businesses, from retailers to restaurants, to find new ways to serve their customers and spurred a wave of innovation across many industries.
As the coronavirus vaccine rollout expands and, ultimately, we move towards a state of reopening, we will begin to understand which innovations and trends developed or accelerated in response to the pandemic will remain a part of our lives even after we return to some semblance of normalcy.
This past January, Steve Lamar, president and CEO of the American Apparel and Footwear Association (AAFA), observed that his organization’s member businesses, which includes such retail giants as Calvin Klein, Levi Strauss, and Ralph Lauren, “implemented 10 years of innovation in the last 10 months.” Continuing, Lamar noted that “we’ve really seen a great deal of innovation on every angle: retail, supply chain, sourcing, technology, you name it.”
One way that many merchants adapted was to shift at least a portion of their business online. So it comes as no surprise that 2020 was an absolutely massive year for ecommerce, with consumers spending more than US$860 billion online with U.S. merchants — up 44 per cent over 2019 figures. It was the largest year-over-year growth for ecommerce in at least 20 years.
But even at the height of the pandemic during last year’s holiday season, in-store walk-ins were still holding at around 40 per cent of the previous year’s numbers. Four out of every five retail dollars are still spent in-store, meaning that a majority of shoppers still enjoy a tactile shopping experience where they can test out the merchandise. In fact, 82 per cent of shoppers say that interacting with a product in-person makes them more likely to buy.
Furthermore, research has consistently shown that consumers tend to spend more when shopping in person versus online. One study found that more than 70 per cent of in-store customers spend over US$50, and more than a third spend over US$100. Compare that to just 54 per cent of online shoppers who spend over US$50, and 21 per cent who spend more than US$100.
Strong incentives for restaurants
Restaurants, too, have strong incentive to keep guests coming into their physical locations.
By only focusing on delivery and takeout, dining establishments lose the opportunity to make a lasting impression on guests by “wowing” them with an incredible dine-in experience. They also forfeit the ability to upsell on items like alcohol, appetizers, and desserts. And they cannot offer guests the full benefits of the dine-in experience.
It’s clear that innovations that impact the in-person shopping or dining experience will be a huge area of focus for consumer-facing businesses for the remainder of as we make our way out of the pandemic.
One such innovation that we predict will continue to be widely implemented and expanded is contactless solutions. According to one study, 53 per cent of consumers have used a mobile contactless payment option for the first time since the pandemic began, and an astounding 85 per cent of consumers say that it is important that a retailer offer the choice for contactless payment.
There’s also evidence showing that stores that haven’t implemented some sort of contactless payment solution are at a competitive disadvantage. The same study cited above indicated that 28 per cent of shoppers will actively avoid a retailer that doesn’t offer a contactless payment option and instead choose one that does.
A contactless world
And it’s not just payments that are going contactless. Many local grocery stores and online delivery services like Instacart are now offering the option to leave your goods at your door without any consumer interaction or hand-off. Medical appointments, too, have seen a large shift to contactless online interactions and telemedicine companies have seen their stock values rise tremendously in 2020.
You could literally go down a list of industries and observe that most of them are moving toward fewer in-person interactions. Hotels and other hospitality businesses have been embracing contactless check-in services. Contactless fitness companies like Peloton, Tonal, and Mirror have seen their sales explode over the past several months as homebound workers seek to stay trim in quarantine. Want to park your car on the street but don’t want to deal with touching a meter or pay box? In many cases, you can simply pay via mobile app.
The contactless revolution has extended beyond the private sector and into government, as well. Governments have increasingly adopted no-touch solutions like online portals to facilitate activities like traffic ticket payment, vehicle registration, and residency changes. Remote visits by social workers have also enjoyed growing popularity in 2020. And, south of the border, even U.S. government agency call centres have begun using chatbots to aid with support so that fewer people need to be physically present to handle surging demand.
These last developments are particularly surprising — as the government is typically not known for being a leader of innovation. The fact that states and municipalities across the country are leaning into contactless solutions shows just how powerful and far-reaching this trend really is.
We have seen similar trends with regard to another contactless solution: restaurant menus. Zenreach’s contactless menu capabilities rolled out several weeks ago, and since then, we have observed that those merchants which have deployed contactless menus are seeing consumers sign up at twice(!) the rate of those merchants who do not have contactless menus. This is just another strong indication of consumers’ desire for contactless solutions.
It’s truly amazing that technology has evolved to the point where customers are able to have a contactless retail experience at a brick-and-mortar establishment. Contactless solutions — for menus, payments, price checks, and even in-store assistance — should go a long way toward alleviating lingering consumer health and safety concerns.
To survive the pandemic (and continue to thrive afterward), restaurants and retailers need to take a hard look at contactless solutions. Your business benefits from having them and your consumers want them, so give them the experience they’re looking for.
John Kelly is Zenreach’s CEO. He has extensive experience in both e-commerce and ad tech. Prior to joining Zenreach, he was Head of Seller Growth at eBay and VP of sales at Criteo, a company that pioneered retargeting technology. John has a B.A. from Brown University, a J.D. from Georgetown University, and is a Fulbright Scholar.