The future of retail: How to shop in a contactless world

Published on 17/09/2020 by Sonia Navarrete

The beginning of lockdown meant for many a dramatic change to their daily routines. Both work and education were shifted towards online education and remote working. For retailers, this meant that physical shops had to close down and shoppers had to readapt to the online world.

the future of retail in the UK in a post-COVID world

We asked 1,045 respondents in the UK to understand if their shopping habits had changed since the beginning of the lockdown and what does the future of retail looks like for UK retailers and consumers. (The full research methodology is at the bottom of the article.)

The future of retail: 5 new ways of shopping 

We have identified five new ways that are starting to be used more by UK consumers, some of them accelerated by the pandemic, and could hold the key to the survival of smaller retailers. 

#1: Shopping by chat 

At the end of last year WhatsApp unveiled the ‘virtual catalog’ in the UK, allowing customers a new way to browse what a shop has to offer. The business can add information on price, images, description and product code. Users can switch from the personal app to the business app. They can’t run at the same time, but it allows business owners to have that app running without having to lose all of their personal one.

You don’t need to add a website, so if you are a traditional physical store, you can add to your products. However, if you use eCommerce software , then you can take the user through the whole journey, from browsing to purchasing.

 

whatsapp for business as a new way of shopping

 

Only 5% of respondents state having shopped using this WhatsApp virtual catalog, however, it could become an effective way for small businesses to reach out to younger consumers. Users can now see the entire catalogue of goods right from within the app and not having to switch to a website.

#2: Shopping by voice

This is a trend that has been around for some time (Amazon’s Alexa was launched in 2016 in the UK), however, it is still taking off—only 12% of respondents state shopping using voice assistants.

According to a poll from YouGov, consumers are using the devices such as Amazon Alexa or Google Home to play music and ask general questions, however, these are not being used for buying. 

Despite the low adoption, it is worth keeping an eye on this. AI virtual assistants can help SMEs with the customer journey, by personalising their experience and also provide a post-sale service.

#3: Social media buying

16% of respondents state using social media to buy. This, also called social commerce, differs from social media marketing in that in social commerce  the buyer’s journey (from browsing to purchasing) is done on social media platforms.

At present Instagram is the most popular platform, with buyers landing on a product and completing the customer journey on the platform. 

New research shows that consumers in the UK are keen to use social media for buying. For example, 79% state they buy more products via social media compared with two years ago.

#4: Shopping without paying in-store

Amazon Go, the ‘Just Walk Out Shopping’ model, was implemented in 2016 in the US. Here’s how it works: Users need to have an Amazon account, download the Amazon Go app, add items to their shopping cart via the app, and then purchase the items. Then, they can walk into an Amazon Go store, pick up the items they added to the app’s shopping cart, and walk out without queuing or paying at the tills. 

Amazon uses computer vision, deep learning algorithms, and sensor fusion, which means that the items have a weight sensor so when a product is taken from the shelf it automatically updates the stock. There are also sensors and cameras that a machine learning system is showing in real-time what the user is actually putting in the bag. 

In the UK, it has been reported that Amazon will open at least 30 physical stores in 2020. With a third of consumers (24%) in the UK avoiding going into physical stores as a measure of prevention for COVID-19, Amazon Go it will be interesting to see the adoption of this new way of shopping.

#5: Shopping using AR/VR

The use of Augmented reality (AR) and Virtual reality (VR) in retail is expected to grow in the next few years. According to Gartner, by the end of this year, almost half of retailers (46%) planned to deploy either AR or VR solutions to meet customer service experience requirements.

A number of retailers have already started offering it to its customers, focusing on clothing, furniture, accessories (such as handbags) and make-up. A recent survey showed how UK consumers are willing to use AR technology for shopping, with over half of them stating they would be happy to try it if it was available online or in-store.

A change in customer behaviour towards online shopping and mobile payments

The pandemic has accelerated digital adoption and some of the methods above have seen a boost since the beginning of lockdown. Health has become a priority issue for consumers and avoiding physical contact the key focus for them when looking to incorporate new ways of shopping.

However, the pandemic has impacted consumer behaviour for both online and in-store shopping:

  • Long-term change: 62% of respondents state that their shopping behaviour has changed for good since the crisis. 
  • More online choice: 24% state buying more online than they did before in physical stores, with 13% stating this choice is due to the reduced risk of infection.
  • Cashless payments preferred: The preferred method of cashless payment is by debit card (55%), Paypal (49%), and credit card (40%).
  • Brick-and-mortar shops chosen to support the local economy: (53%) that prefer to shop at a retail shop, (34%) stated that they would choose a physical store to support the local economy.

The crisis has also impacted the way in which consumers have adopted cashless payments since the beginning of the crisis.

  • Mobile wallet usage on the rise: Over half of respondents have a mobile wallet installed (55%). 
  • Health reasons behind choosing mobile wallet: 30% consider is safer to use a mobile wallet during COVID-19 to avoid contact.
  • 100% cashless society: 43% would feel comfortable in a cashless society only if 100% of stores would accept a cashless solution.

Building resilience for the future

Businesses that traditionally had been brick-and-mortar retailers saw how they had to rapidly switch to an online model to survive.

In fact, over a third of companies (39%) didn’t have a business continuity plan in place before the crisis. In addition, 51% of SMEs have had to make an investment in software in response to the COVID-19 crisis.

So what does the future of retail look like?

The future of retail should look at combining emerging technologies that can help retailers bridge the gap between the online and in-store experience. 

Retailers that were traditionally offline have had to quickly adapt to be able to continue doing business online at a time when physical shops were closed. These unexpected changes have left many traditional retailers struggling to find different ways to serve customers effectively using other channels.  

Those retailers that already had an online presence have adapted quicker, either using an eCommerce platform or as part of Retail Management Systems

We have seen how for many consumers the crisis has meant a change in shopping habits. As restrictions ease and consumers start to shop again, retailers need to think about a  long-term strategy. 

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* Survey methodology

Data for the “Capterra Cashless Payments Survey” study was collected in July 2020 from an online survey of 1,077 respondents that live in the UK.

The survey data used for this article comes from 1,045 participants who qualified to answer.  The information in this article corresponds to the average of all surveyed participants.

Note: There were several answer options available for the graphics so that the total of the percentages exceeds 100%.

The criteria for participants to be selected are:
  • Employed full-time
  • Employed part-time
  • Freelancer
  • Full-time student
  • Retired
  • Participants that lost their job as a result of COVID-19 crisis
All participants come from different industry sectors.

 

This article may refer to products, programs or services that are not available in your country, or that may be restricted under the laws or regulations of your country. We suggest that you consult the software provider directly for information regarding product availability and compliance with local laws.