One Year Later: Retail’s Jump Into the Future

A little more than one year ago, COVID-19 presented itself as an unlikely disruptor for retailers. Government safety measures changed the retail landscape seemingly overnight, and in doing so, forced a shift in customer needs and shopping behaviors. The past 12-plus months saw the accelerated adoption of long-predicted technology needs that enabled many retailers to not only navigate shifting challenges but to emerge even stronger than before. Now consumer trends such as curbside pickup; buy online, pick up in-store (BOPIS); and Scan and Go hold a prominent stake in retail’s evolution, with online and mobile shopping becoming a highly sought-after consumer preference in both convenience and safety.

According to a recent forecast, 2021 retail sales are projected to reach $4.4 trillion, with online sales accounting for an estimated 18 percent to 29 percent, or $1.4 trillion to $1.9 trillion in growth. Enticing as it might be for retailers to pivot back to a pre-COVID blueprint, 2020 has shown us that retail’s future lies with mobile devices more than ever. Beyond this, online shopping will continue to play a key role in the consumer journey even after states reopen at full capacity.

As we move forward into 2021, here's how the retail landscape will continue to adapt to changing online consumer shopping behaviors and what new processes and technology retailers can implement for successful mobile and contactless shopping experiences as demand soars.

Contactless Becomes a Permanent Staple in the Customer Shopping Journey

Lockdown constraints throughout the pandemic ushered in a new era of e-commerce, with retailers accommodating cautious consumers who relied on their mobile and other smart devices to make fast, contactless payments and well-informed shopping decisions.

Collected data shows contactless payments increased 10 times at the virus’s peak in April 2020, and further showcased how consumers encountering uncertainty favored safety and convenience over the typical out-of-wallet card experience.

In order to meet these contactless expectations while also retaining customer loyalty, retailers will continue to leverage online services for at-home-delivery, curbside pickup and BOPIS post-pandemic and beyond. At the same time, retailers must also reassess the approach to create omnichannel strategies that integrate app-friendly online channels for a strong lasting digital presence throughout the customer shopping journey.

The Adoption of Virtual Services and Mobile Scanning Technology

Pre-pandemic, retailers could count on more predictable trends, as consumer expectations and changes to online shopping behaviors evolved at a more gradual pace. But an October 2020 McKinsey report revealed an accelerated timeline as retail executives needed to shift their strategies more quickly. Seventy-two percent noted the importance of quickly embracing new digital technologies to succeed early on during the crisis. Beyond this, 67 percent disclosed investing more in advanced automation elements than their competitors. As retailers look to the future, technology adoption will become table stakes to remain competitive. Leveraging emerging tools and technology such as virtual servicing can sustain profitable margins by making ongoing needs across inventory management and product fulfillment more efficient and effective.

Mobile devices with high-performance computer vision technology are already playing an integral role in maintaining safety and flexibility within today’s retail workforce. They also provide a user-friendly experience specifically designed for assisted selling as well as a more sophisticated approach to order fulfillment.

While consumers will return to in-person shopping, they will do so with elevated expectations. Retailers will need to address the desire for the convenience and personalization of online shopping, from fast order fulfillment to custom recommended offers and product comparisons. Virtual servicing apps that incorporate augmented reality features and offer outstanding user experiences can significantly contribute to this customer demand as well.

Retailers Will Stay the Course With Mobile and Contactless Shopping

Retailers undoubtedly felt the shift from in-store to digital throughout the last year, but it's critical to acknowledge what this transition means for businesses going forward. As we become watchful of pandemic cases reducing in number and the economy stabilizing, one development retailers should consider as a "sure bet" in their business model strategy is the continued growth of mobile and contactless shopping.

Scan and Go technology and cashier-less shopping are two critical components of this future business model. Before the pandemic, nearly 98 percent of U.S. grocery sales happened in-store, according to McKinsey & Company. Now we’re seeing grocery chains benefitting heavily from implementing technology that elevates the shopping experience as customers once again return to stores. An example of this is machine learning software that detects a shopper’s movement, including what they pick up and put back on shelves. Collecting this data can help retailers understand their shoppers better, impacting everything from the store format and product displays to pricing.

Retailers have learned how complicated shopping can be for consumers over the past year and now understand how simplifying a shopper’s experience will pay dividends for the long term.

The past year has been the industry’s tipping point as retailers were forced to respond to quickly changing environments and consumer habits. But much was learned and many of the changes that retailers made will enable them to thrive in an evolved shopping environment. By taking calculated risks in implementing new strategies and technology, we're in turn upgrading the consumer shopping experience and paving the way to a more profitable future.

Christian Floerkemeier is the chief technology officer and co-founder of Scandit, a leading technology platform specializing in mobile computer vision, barcode scanning and augmented reality to improve business solutions and consumer experiences.