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Retail Business Review | Saturday, October 08, 2022
Contactless stores indicate a suite of technologies and customer experiences that retail chains have implemented to reduce friction or delays experienced by customers at various touchpoints and minimize human contact in the buying experience.
FREMONT, CA: The retail industry has experienced significant changes in the last decade as prominent retail brands invested greatly in digital transformation underpinned by cloud computing progress and the widespread acceptance of e-commerce.
The pandemic in 2020 and the succeeding reopening of the economy have further hastened changes driven by varying customer expectations and informal demands of Millenials and Gen Z customers.
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What are contactless stores?
Contactless stores indicate a suite of technologies and customer experiences that retail chains have implemented to reduce friction or delays experienced by customers at various touchpoints and minimize human contact in the buying experience.
Technologies and processes that allow a contactless buying experience incorporate e-commerce buy online and pick up in-store (BOPIS), self-service checkout kiosks, NFC-based payment cards, mobile wallets, and cashier-less checkout experiences like Amazon’s Just Walk Out.
What are the critical drivers for contactless stores?
While e-commerce, BOPIS/Curbside, and contactless shopping experiences are not new, COVID-19 hastened the roll-out of contactless technologies and delivery models as customers and retailers redirected to overcome social distancing norms and safety concerns.
• As per Visa, tap-to-pay transactions in everyday segments in the US, including grocery and pharmacy, have grown more than 100% over the last year (2019). Thirty-one million Americans tapped a Visa contactless card or digital wallet in March 2020, up from 25 million in November, with overall contactless usage in the US growing 150% since March 2019.
• As per Square, “Mobile wallets have accelerated in popularity due to the low- or no-touch interactions customers can make to complete transactions. And for businesses, the tap-to-pay technology can decrease wait times at checkout.”
• eMarketer approximated that BOPIS sales revenue in the United States grew 107% in 2020 and will continue to grow upwards of 15% till 2024.
Technology implications of implementing contactless stores for retailers
• Based on the extent and scope of contactless store implementation, retailers may have to review bandwidth availability, LAN/WAN/wifi capabilities, network security, and security camera coverage at the store.
• Cashierless stores need a bevvy of technologies to work together. Computer vision, artificial intelligence-enabled cameras, infrared lead sensors, microphones, RFID strips, and mobile apps work together to proffer the convenience of walking in and leaving the store without checking out.
• POS systems may need an upgrade to offer additional payment options and integrate POS with sensors. In some implementations (for example, Amazon’s Just Walk Out), the concept of POS, as we know it today, may not even reside as a virtual shopping cart is updated in real-time as the customer adds items into the basket.
• Self-checkout, digital wallets, and BOPIS need a recalibrated approach to lose prevention to address theft and online fraud. As per Visa, “Unlike conventional online orders, a BOPIS transaction may contain less information to leverage in assessing the risk of the order (for example, a BOPIS order may not contain a shipping address). Unlike customary in-store transactions, a BOPIS transaction doesn’t benefit from the secure capture of the payment, like chip-on-chip or tap-to-pay methods.”
• Customer privacy concerns can turn into an issue when every customer is singularly identified and tracked across the store. While mobile loyalty apps and guest wifi systems are already trailing customer behaviour in-store, innovative contactless stores depend on enhanced customer movement tracking, which may raise questions regarding customer privacy.
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