The Rise of Contactless Shopping: Exploring Touchless Retail Technology

Contactless shopping is something that many of us take for granted these days, but while the technology has been around since the late 1990s, it’s only become commonplace in the last few years. While contactless payments are the most obvious aspect of the touchless retail sector, various other developments in the field have revolutionized how consumers approach buying goods.

Of course, the COVID-19 pandemic was a huge catalyst for accelerating the adoption and rollout of contactless shopping technology, but now the shift is just as notable for its advancement in convenience and the protection of personal space. We’ve written this blog to break down the demand for contactless payment, delivery, and other retail technology, expanding on the tech itself, and offering some tips for incorporating it into a retail business plan.

The Growing Demand for Contactless Shopping

When contactless shopping options first appeared in US retail stores back in 2014, they took a little while to pick up traction. It wasn’t until 2018 when Visa started issuing contactless cards that “Tap to Pay”, alongside the release of Apple Pay, that shoppers started to use the system regularly.

The COVID Effect

While contactless payments were originally about convenience, the COVID-19 pandemic hitting in early 2020 forced widespread retail outlets to adopt and roll out the technology rapidly. With people only allowed to leave their homes for essentials and instructed to practice social distancing, it only made sense that tap-to-pay was necessary in retail settings.

Beyond touchless payment options, it’s also worth noting that contactless delivery became more prevalent during the pandemic. Rather than ensuring that customers had to be home to sign and receive goods in person, it’s now common for couriers to simply arrive at a customer's home and leave the package on their doorstep.

It’s worth noting that despite these practices becoming more common during the pandemic, they’re here to stay long after the lockdowns, with many customers preferring the reduced levels of interaction.

Touchless Payment Options and How They Work

With touchless payment being a pillar of contactless shopping, it’s important to understand the systems readily available for retail and hospitality settings along with how they work.

NFC (Near Field Communication): The most common of the contactless payment systems – otherwise known as Tap and Go. This system allows contactless transactions to take place by allowing two devices, namely a card and a reader, to communicate when they are near each other.

QR Codes (Quick Response Codes): QR codes are scannable patterns that direct users to online platforms, often used for marketing purposes. They can be used to facilitate transactions by directing users to relevant platforms or even processing payments directly.

Mobile Wallets: These are “wallets” on people’s smartphones, storing information from bank cards or other online payment systems, allowing people to make transactions directly from their phones. The two primary mobile wallets are Apple Pay and the Google Wallet.

Benefits of Touchless Payment

Reduction of Physical Contact: By reducing the need for physical contact between customers and payment readers, the risk of virus transmission. Contactless transactions also help to reduce the risk of card cloning, protecting customers from financial theft and fraud.

Faster Transactions: The speed of contactless far exceeds that at which chip/signature transactions can take place. This means retail sites can move through customers faster, along with lines moving faster, making shopping easier for the patrons.

Versatility and Convenience: Introducing tools like QR codes and Mobile Wallets has allowed for more convenient transactional experiences for customers. Eliminating the need for always needing a card or cash has made purchases easier for customers.

Examples of Touchless Payment Systems:

Retail Chains: Most retailers and hospitality businesses have integrated NFC technology into their payment systems, with brands like Walmart and Target arguably leading the charge in this development.

Restaurants: When restaurants reopened during the interim periods of the pandemic, many of them integrated QR code-based menus and ordering options for both dine-in and takeout orders. Many have maintained this practice with restrictions lifted.

Transportation Services: Many cities with active public transportation systems, such as New York, London, and Berlin have adopted contactless payment methods, such as NFC-enabled pre-paid transit cards or mobile ticketing apps, allowing for smoother travel experiences.

The technology of contactless shopping has extended far beyond the reach of traditional retail transactions, with touchless transactions being commonplace in everything from hospitality to transport. Their convenience and safety provision have made them an essential part of the modern economy.

Self-Checkout Kiosks

Another important aspect of the contactless shopping experience is the existence of the self-checkout kiosk – a system in which the customer essentially acts as their own cashier. With systems including weight sensors, scanners, and in-built card readers, the self-checkout kiosk has offered shoppers a faster way to shop without interacting with staff.

Advantages of Self-Checkout Kiosks

Efficiency & Preference: Self-checkout speeds up the checkout process for customers, while also increasing the customer’s sense of autonomy. This also reduces the wait times for customers in lines for checkout at the desk, enhancing the shopping experience for every party.

Increased Time & Productivity: In the past, busy times would see indiscriminate supermarket staff having to occupy the counters, meaning other jobs could not be completed. Self-checkout allows staff members to focus on stocking shelves, cleaning up messes, or answering customer questions.

Saving Costs: Many stores face labor shortages, meaning they have to consider cost-cutting strategies to stay afloat. By investing in self-checkout, they can reduce their overarching labor budget, allowing them to reinvest in different directions.

Considerations for Implementation and Optimization

User-Friendly Design: The user interface of self-checkout systems must be intuitive and easy to navigate for customers of all ages and technological literacy levels. If the system is confusing, it will only serve to slow down traffic in the store.

Sufficient Staff Training & Availability: When implementing new systems, staff members must be fully trained in how they operate, ensuring they can offer sufficient assistance to customers if necessary. It’s also important to keep some dedicated staff on shift to provide such assistance.

Security Measures: Despite the convenience and autonomy provided by self-checkout systems, customers are also more likely to steal from them. Stores must invest in sufficient security measures to minimize losses from theft.

The jury is still out on self-checkout systems, with some major retailers starting to backpedal their implementation in locations. However, the majority of customers still prefer to use them when compared with traditional checkouts, showing that with the right approach, they can significantly enhance the customer experience.

Online & Mobile Ordering Solutions

Mobile ordering is fast becoming a core element of the contactless shopping experience, allowing customers to purchase goods more conveniently and efficiently. Mobile ordering in advance means customers can arrive at the store and pick up their goods without moving through the store, while it can also be used by retail staff for stocking tasks and customer experience provision.

It’s also worth noting tools like Dash Cart, recently developed by Amazon as an alternative to their failed Just Walk Out technology. This mobile ordering tool is a “smart shopping cart” that allows customers to scan goods, link to online shopping lists, and then check out from their carts.

Benefits of Mobile Ordering

Better Inventory Management: Mobile ordering systems used by customers and staff allow for better inventory management. By tracking what needs to be in stock and when retailers can ensure they keep the store properly equipped for customer requests at all times.

Customizable Customer Experiences: Through online and mobile ordering systems, retailers can collect data facilitating more customizable customer experiences. With personalized recommendations, offers, and stock alerts, customers feel more valued and appreciated.

Saving Time: By ordering goods in advance, customers can simply show up to stores and leave with everything they need. This saves time and effort significantly, minimizing the people customers need to be around or interact with during their shopping experience.

Considerations for Implementation and Optimization

Create a Dedicated App: Stores should develop dedicated apps for mobile ordering, ensuring user-friendliness, compatibility with multiple devices, and seamless payment options. These apps should also have some customization options for bespoke customer experiences.

Offering Various Pickup/Delivery Options: Mobile ordering shouldn’t be limited to counter pickups alone. On one app, customers should have options to pick up goods in-store, from lockers/curbside, or have products delivered to their homes.

Keep Customers Informed: It’s important to provide customers with order tracking notifications, so they know how far along the ordering or delivery process things are. Confirmation, preparation, and pickup/delivery times should all come in automated messages.

Whether starting with a mobile ordering app or investigating the viability of a more high-tech solution like Dash Cart, mobile ordering can be a significant part of a contactless shopping strategy. As with any cloud-based strategies, it’s important to comprehensively integrate the technology across your business, fully training your staff on its operations.

Conclusion

There are various reasons that contactless shopping experiences are becoming more and more commonplace across the retail industry. For one, in a post-pandemic world, customers need safer shopping options. Similarly, as customer autonomy and convenience grow in importance, the various contactless shopping options are becoming less negotiable and more essential.

If integrating contactless shopping into your operation, it’s important to remember some core strategic concepts to make the shift as seamless as possible.

Prioritizing user-friendly design
Sufficiently training your staff
Allowing for multi-channel experiences
Guaranteeing plenty of security measures are in place
Clear instructions for first-time users
Responding to customer feedback

These new, exciting systems aren’t going away soon, so it’s important to keep up with the technology and understand how to integrate it when makes sense for your business.