Before Covid-19, visitors to Jared The Galleria of Jewelry browsed glass cases of engagement rings and diamond earrings and paid at a pin pad. But now this routine –culminating in the furious printing of a receipt – has been turned upside down.
And it’s likely to stay that way.
With two-thirds of its 3,000 locations shuttered, Signet Jewelers, owner of the Jared brand and other chains, has sold thousands of pieces a day via a new feature: video calls. After browsing online with a sales rep and paying, the shopper drives to a nearby store. A gloved and masked emploƒyee makes the delivery, and maybe something extra – a few weeks ago, a dozen roses were included and the buyer proposed in the parking lot.
As thousands of stores and restaurants across the United States reopen with shutdown restrictions easing, Americans are discovering a reshaped shopping experience. Along with all the plexiglass shields and social-distancing signs, comes the rapid adoption of contact-less checkout. This is safer for employees and customers, while also forcing the evolution of a US retail industry that has woefully trailed much of the world in technology.
"We see it as an opportunity to open the aperture for our customer experience, ” said Bill Luth, an executive vice president at Signet.
The traditional checkout experience – marked by cashier banter, scanning items, pressing a pin pad or handling cash – was fading before coronavirus arrived in America, and the outbreak has only quickened its demise. Mobile apps are increasingly being used in stores to place orders, get questions answered via chat and pay. To avoid any contact, more customers are opting for delivery or curbside pickup.
This shift will speed up purchases and let employees help consumers, instead of scanning items and swiping credit cards. It may also get customers in and out more quickly at a time when retailers and restaurants are required to reduce capacity as part of social-distancing measures. A diner that reserves a table from home and then orders and pays online will make a restaurant more efficient, according to Richard Crone, chief executive officer of payments consultant Crone Consulting.
Coffee giant Starbucks, which pioneered mobile ordering years ago, is now doing curbside pickup at some stores to help make up for lost walk-in traffic. For years, the chain has been successful at getting consumers around the world to use its app-based mobile payments, and Covid has accelerated that shift.
"We predict the mobile app will become the dominant form of payment, ” Chief Executive Officer Kevin Johnson said in a May 4 letter to customers.
But there are downsides. With more mobile transactions, retailers will be collecting even more data, and that could infringe on consumer privacy, an issue that’s been largely forgotten during the pandemic. Chains that cross the line risk alienating customers, and facing the ire of legislators and regulators who are already keen to impose tighter privacy policies.
Many of the new technologies are also pricey, although this can reduce labour costs by lowering the need for cashiers and making existing employees more productive. Using an in-house app also helps restaurants avoid paying fees as high as 30% to platforms like Grubhub, according to Crone. Adding pay features to a retailer’s application promotes usage, and engagement with customers, he said.
Mobile apps can also help merchants shift gears quickly. When the pandemic hit, From The Hearth Kitchen & Pie Shop, which runs a commercial bakery and five restaurants in California, laid off 38 employees, as revenue sank by 70%. Then the company redesigned its mobile app to allow pickup and delivery of not only restaurant food, but also grocery items.
While margins are lower, now sales are up 5%, according to John Dix, the company’s CEO. He has since hired back all the workers who were let go, while adding another 14 staffers to meet the rush of mobile orders. Once the lockdown ends, Dix plans to keep selling grocery goods.
At Boston-based startup Incentivio, which supplied the technology for From The Hearth’s mobile app, the rate of signing contracts has more than doubled recently, said co-founder Sashika Dias.
"The restaurant industry is going to change permanently, ” Dias said.
It’s not just restaurants. Companies ranging from Macy’s to Verizon have also reduced human contact with in-store mobile checkout. The Vitamin Shoppe rolled out mobile-pay options from Apple and Google to its more than 730 stores weeks ahead of schedule, according to CEO Sharon Leite.
Coronavirus "really changed the paradigm around how long it takes to execute technological enhancements, ” Leite said.
Autonomous locations, like Amazon’s convenience store, will become more common in using a mix of mobile applications, cameras and sensors to let customers grab items and go without checking out. Pilots globally are expected to balloon to 300 from about 100 over the next year or so, Crone said.
At AWM Smart Shelf, which offers autonomous-store functionality, there has been a boom in interest, according to Chief Executive Officer Kevin Howard. It’s been deployed in 13 stores, with more than three dozen being added in the next four months. Before coronavirus, he figured that mass adoption would take as long as five years.
"That timeline has been enhanced to 12 to 18 months, ” Howard said.
Rapitag, another vendor, has mostly tested its autonomous checkout technology in Germany, but the virus has spurred talks with five major US chains.
"It’s not a nice-to-have, ” said Sebastian Muller, a Rapitag co-founder. "It’s now really required.” – Bloomberg