contactless

The contactless revolution is here — are you ready?

Embracing up-to-date solutions is increasingly vital moving beyond 2020

By John Kelly

Looking only at the data for the first two months of 2020, you might have been tempted to declare — and not without good reason — that it was shaping up to be a banner year for brick-and-mortar retailers. In the last week of February, national in-store traffic was up 3.5% compared to the previous year.

The U.S. had experienced 23 consecutive quarters of GDP growth, one of the longest such periods in modern history. The Dow Jones Industrial Average soared to record heights, peaking at nearly 30,000 points on February 11. It felt to many like there was nothing that could cool down America’s red-hot economy.

And then, beginning in early March, the bottom fell out.

COVID-19 and industry-wide decline

As the novel coronavirus outbreak proliferated across North America and around the world (and as state and local governments wrestled with how to control it), foot traffic dropped precipitously across the board.

By the end of the month, U.S. nationwide retail walk-ins were at a paltry 27.1% of the previous year’s figures. The country hit its low point in mid-April when in-store traffic was down 75% from the previous year. Obviously, that is a huge decline and, to all knowledge, the U.S. has never seen such a precipitous drop in foot traffic. 

From the period of mid-April through June, America saw a slow but steady increase in foot traffic, climbing back up to 50% of last year’s numbers. Now, that is still quite a bit down from normal, but the trends were looking encouraging. However, from July to mid-October, we saw a flattening of retail traffic, and in the past month or so we’ve observed some downward movement in the trend lines. Clearly, foot traffic to retail shops, restaurants, and offline venues across the country remains depressed quite significantly.

And looking at the available data, it is obvious that the coronavirus pandemic is as bad as it’s ever been on a countrywide level. In just the past week, the number of daily cases, deaths, and hospitalizations have risen significantly, as did test positivity rates among reported tests. The country recently surpassed 250,000 confirmed COVID-19 deaths and is now approaching 300,0000. Ominously, since mid-November, the daily number of new cases has broken its own record numerous times.

Further adaptation is required

These figures are the clearest indication yet that COVID-19 is something that we will all have to live with for another several months at the very least. And understandably, a large portion of the public still has serious health and safety concerns about patronizing brick-and-mortar businesses in this environment.

The good news is that there are reasons for offline retailers to be optimistic.

A number of studies have shown that despite the explosive growth of ecommerce, the tactile in-store shopping experience is still very powerful, as evidenced by the fact that even during a global pandemic, half of all consumers are still shopping in stores. 

But with consumers so clearly on edge, it is imperative that merchants lean in to enhanced safety and sanitation measures — practices like limiting store capacity to encourage social distancing, frequently disinfecting pens and surfaces, and implementing mask mandates. After all, the more businesses that adopt these changes, the more consumers will come to expect them and begin identifying these measures as standards.

The contactless revolution

A very important (yet often overlooked) callout involves contactless solutions, which have become quite popular this year. According to one study, 53% of consumers have used a mobile contactless payment option for the first time since the pandemic began, and an astounding 85% 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% of shoppers will actively avoid a retailer that doesn’t offer a contactless payment option and instead choose one that does. 

Fewer in-person interactions

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. Telemedicine companies like Teladoc have seen their stock values rise tremendously in 2020. 

You could 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.

Government adoption

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 many 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 — governments are not exactly known for being leaders of innovation. The fact that states and municipalities across the U.S. are leaning into contactless solutions shows just how powerful and far-reaching this trend really is.

Zenreach has seen similar trends with regard to another contactless solution: restaurant menus. Our 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. 

Alleviating customer concerns

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 payments, price checks, and even in-store assistance—should go a long way toward alleviating consumer concerns. 

To survive the pandemic, retailers need to take a hard look at contactless solutions. 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 ecommerce 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.

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