Click-and-collect fulfillment and contactless payment have led the expansion of contactless retail. However, new variations on "contactless," including automatic replenishment and other forms of engagement streamlining and purchasing, are growing. These options give consumers safe and convenient ways to shop and receive products while providing retailers new ways to develop brand loyalty, increase share of their customers' wallets, and reduce costs.

Contactless retail may have gotten a push from the pandemic, but the convenience consumers experienced introduced new expectations for online journeys, flexible fulfillment, and the role technology can play for retailers and customers. Consumers have become more familiar and comfortable with allowing retailers to have visibility into their locations. They allow them to connect with their smart appliances and gain insight into their behaviors. All in the services of making better recommendations and promoting products and services. This comfort is dependent on retailers providing clear value and efficiencies. But, as retailers are tasked with creating innovative ways to meet these new consumer expectations, they must balance it with maintaining brand loyalty.

Value Transactions

While the most recognizable value transaction in retail is money for products or services, there are other transactions that deliver value for both retailers and their customers. Exchanging preferences and product ratings for better recommendations, or personal information for coupons or other discussions, are two such transactions. Now, retailers are exploring additional value transactions. In some cases, asking for permission to monitor smart appliances can make replenishment of food or other consumables easier for consumers. Retailers may also ask for information about the personal lives of their customers to put together curated shopping experiences or offer related products and services. Is it worth sharing your family's birthdates with a retailer to get reminders to order a birthday cake? Or recommendations for the year's most popular gifts for a 12-year-old boy? Both can be ordered online and delivered curbside, taking that contactless experience to the next level for a busy parent.

Flexible Fulfillment

Curbside, Buy Online/Pickup In Store (BOPIS), and home delivery are the most common contactless fulfillment methods. Pickup (and return) lockers are seeing rapid expansion in quick-service restaurants, hardware stores, and others. These fulfillment methods allow for customers to receive packages at their convenience and require little or no contact with store personnel. Retailers are also partnering with rideshare and other third-party delivery services to expand fulfillment options for home delivery. This trend of allowing customers to decide when, where, and how they receive their orders is expanding through innovative partnerships. For example, shipping pick-up at the local pharmacy allows customers to decide when they will receive any order, not just those orders delivered directly from a retailer or restaurant. This kind of partnership reduces costs for the shipping company and drives traffic into the retailer as consumers pick up their packages and make impulse purchases.

Payment

Contactless payment has also seen significant expansion. Adoption of payments via mobile devices and applications has grown over the past two years. Retailers have also incorporated stored-value capabilities in their apps that allow consumers to "reload" with a credit card, debit card, or bank account transaction. These options reduce the amount of cash consumers need to carry and minimize the contact required at purchase or order delivery. The increased convenience for consumers, and the limited transaction fees for retailers, deliver benefits to both parties. Retailers also see less fraud at the register and better cash management metrics due to the overall reduction in cash transactions.

Summary/Conclusion

Less contact with customers does not mean less engagement or loss of mindshare with them. Providing more options for contactless shopping, payment, and fulfillment gives retailers new opportunities to provide value and develop brand loyalty. Because of the pandemic, consumers were essentially forced to use contactless options. But as "contactless" transitions to optional, they will reassess the value they are getting from those contactless channels. Retailers need to do more than simply offering to deliver orders to customers' cars; they need to think about the value and efficiencies these new contactless models can provide to both themselves and their customers.

See how Cisco's portfolio of retail solutions provide the capabilities retailers need to expand their contactless retail offerings.