Virus makes touch-free shopping a necessity
Burger King has started airing ads about making its drive-thrus contactless for both payments and pickups.
Publix, the Florida-based grocery chain, this month said it completed its rollout of tap-to-pay registers at its more than 1,200 locations across the Southeast.
And Walmart, the world’s largest retailer, late last month said it will provide no-contact pickup, delivery and in-store checkout.
There are many uncertainties about how the coronavirus will affect people’s health, their jobs and the economy, but some consumer trends have already become so obvious that they suggest a longlasting shift in people’s behavior when the COVID-19 crisis finally departs. One of them is the move toward contactless transactions in the U.S. getting supercharged, as shoppers try to restrict what they touch in stores to avoid catching the virus.
Now retailers that remain open are scrambling to respond to this new consumer need. When thousands of other merchants reopen following the pandemic, they will have to reevaluate how they operate their stores to coax shoppers back.
Where backers once pitched contactless technologies for their convenience, retailers will give them new consideration for health and safety benefits.
These technologies range from the mundane, with payment terminals at your local grocer enabling contactless payment services such as Apple Pay, to the futuristic, with Amazon Go stores, delivery drones and sidewalk robots getting more enthusiastic support because they enable social distancing.
“I do believe this is an opportunity,” said Oz Alon, co-founder and CEO of HoneyBook, a financial tech startup in San Francisco. “This is a huge event in the world. People are going to change their behaviors and a lot of things that have struggled for adoption will get a new push.”
The expected shift to contactless tech comes as the retail world has faced enormous challenges during the outbreak. Online retailers that have stayed open are dealing with a flood of new shoppers.
It’s important to note, though, that all this sophisticated tech still won’t replace health professionals’ recommendations to wash hands and wear a mask in public.
People in other countries might find it strange that the U.S. is so far behind in contactless payments. Places such as Canada, England, Australia and Poland have already made contactless the default form of in-store payment.
Visa and MasterCard have been working to convince consumers to make the switch, seeing tap-topay as an easier and faster way to conduct a transaction compared with cash, magnetic stripe and chip card payments.
This work has been slow going, as retailers have replaced old payment terminals with contactless ones and banks mail out new tap-to-pay cards to their millions of customers. These efforts are now getting ramped up as consumer interest increases.
Transit authorities have already been introducing contactless payments, and that should make it a little easier for people to venture outside again.
Last year, the payment industry widely believed these types of tap-to-pay transit terminals would spark the move to contactless transactions in the U.S. It appears it will likely be the coronavirus instead.
“I can see consumer behaviors changing for sure from the situation we’re in,” said Linda Kirkpatrick, president of U.S. issuers for MasterCard. “When those consumer behaviors change over several months, they tend to stick.”
A variety of newer retail technologies are likely to get a push in adoption due to the pandemic.
Delivery drones, which are limited in the U.S. by strict regulations, have already experienced this increase in demand. Alphabet, Google’s parent company, has seen orders using its Wing drones in rural Virginia, where it’s running a pilot program, more than double.
“The technology is particularly useful at a time when people are homebound in many cases and the need to limit human-tohuman contact is important,” Wing spokesman Jonathan Bass told Bloomberg this month.
Starship, whose sidewalk robots deliver snacks and breakfast, said it’s seeing a surge in demand too.
“We are working as quickly as possible to expand our robot delivery service so we can help more people, and we’ve had grocery stores, restaurants and other delivery companies get in touch to ask for assistance,” the company said.
Another concept is Amazon Go’s Just Walk Out system, which lets you check in at a turnstile at the front of a store using your phone, pick up whatever you want to buy, then leave without stopping at a cashier. The growth in cashless services is likely to weaken the oldest lasting form of payment: cash.
Kickfin, which essentially operates as Venmo for businesses, said it’s seeing a surge in interest from restaurants during the crisis. The service allows restaurants to pay out tips to their workers digitally.
“No one’s touching cash; no one’s paying with cash,” co-founder Brian Hassan said.
While plenty of people are likely to avoid bank notes, the World Health Organization last month said there’s nothing wrong with handling cash, so long as you wash your hands.
Also, the concept of a cashless society has been criticized as discriminatory against people without bank accounts and cards.
Jane Barratt, chief advocacy officer at financial tech company MX, said the move to contactless transactions is part of a much broader trend, with people being more careful with their money during a financially unstable time.
“I think there will be an explosion of services and functionalities that will come out in the next few months,” she said. “Necessity is the mother of invention, and there’s a whole lot of necessity right now.”