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Contactless pickup is here to stay: How retailers must adapt

Retail
(Image credit: Image Credit: WNDJ / Pixabay)

As a direct result of the Covid-19 pandemic, many retailers have had to adapt to significant changes in delivering products to their customers. Using new technologies to improve customer experience is something the retail industry has done and continues to do — it's more critical now than ever before.

In March 2020, the immediate lockdowns in multiple states caused brick-and-mortar retailers to close their doors. They had to find innovative ways to continue selling their products, even with state restrictions in place. There was no other option — from this point on, it was sink or swim. So some tried e-commerce and web sales even if this was not their traditional approach.

For most, curbside pickup and the emerging buy-online, pick-up-in-store (BOPIS) business models quickly became a norm for retailers worldwide. The goal was to benefit customers and essential employees by limiting face-to-face interactions to reduce the deadly virus's spread. Unfortunately, spending time in a store meant an increased risk of exposure, which was enough to keep customers from entering shops as they usually would. 

All of this you know, but it's worthwhile to note while setting this scene. Those of us working in and serving the retail sector know the devastating impact the pandemic had on our sector of the economy. Even now, as restrictions wane though we still wrestle with managing the effects of Covid, retail's digital transformation throughout the worst of it to this point brought about revolutionary change. 

Some of this evolution will remain. For example, contactless technologies to support customer shopping and experience, i.e., delivery of goods and last-mile delivery, likely won't recede in the months ahead. One significant change likely to continue permeating our collective conscious is the implementation and full-scale use of intelligent lockers that customers can use to access products without waiting in a long line or interacting with employees. In some cases, these solutions are being added to the likes of UPS stores, for example, and college libraries, and are ever-more becoming amenities in multi-residential complexes – all good things for retailers who wish to continue capturing market share of customers who transformed the way they shop throughout quarantine.

Retail technology trend surges started long before the pandemic 

However, if we take a closer look, we can see that many of retail's most nascent trends started long before March 2020. Let me explain. In 2015, it was expected that retailers would rely on technology, automation, and mobile applications to help their businesses grow and thrive in a competitive market. Trying to identify what customers crave from their shopping experience is always a challenge, but retailers must take on this responsibility to grow their footprint. 

More collaboration between retailers and their customers began to be the norm, seen more often now and will likely continue in the future. In addition, the use of mobile devices emerged as a powerful tool for both retailers and consumers, leading to ever-present cashless and cardless payment methods. Options like Apple Pay, Samsung Pay, and Google Wallet are popular payment alternatives customers use to complete transactions. These payment methods substantially increased over the last year.

Automating manual processes in retail stores was another milestone that trickled into existence over the last decade and is not fully realized. More retailers are using artificial intelligence (AI), too, to help drive revenue growth and gather real-time data regarding sales. Insights collected and analytic data are more reliable and accurate compared to traditional retail processes. All good things. 

But as we said here and as all in retail know, the pandemic forced all of us to adapt. Covid-19 accelerated the unprecedented changes that were already headed to the retail sector. There's now a steady demand for contactless, secure, and safe pickup methods, and retailers must adopt this trend if they want to stay ahead of the competition. But, again, this trend is likely not going the way of the dinosaur. One contactless communication tool that experienced a re-birth through COIVD is QR codes. The application for these was often wondered about, for years, until contactless everything gave wind to their embers, and now their use is on fire (from menus, product information, and retailer's website directs.

One step further, smart lockers 

Some of America's biggest retailers — such as Macy's, UPS Store, and Foot Locker — continue to adapt how they service customers by deploying smart lockers to provide secure contact-free pickup of items sold through their websites. These modular lockers innovate the BOPIS model, offering retail customers comfortable and convenient 24-hour, no-contact, self-service retrieval, and return access using superior technology.

Smart lockers benefit both the customer and the retailer. Our firm announced in January that it had reached the 100-million-packages-delivered through smart lockers. For the customer, it means fast, safe, and secure pickup and return processes that can be done without contact. For the retailer, smart lockers pave the way to a better bottom line because of reduced labor costs — and the technological upgrade allows them to compete in a similar arena with online giants like Amazon.

According to a study commissioned by Forrester Consulting, conducted at one of the country's largest home improvement retailers, the cost-benefits of a smart locker system are palpable. The Total Economic Impact (TEI) study reveals store-based lockers are directly responsible for a total internal labor savings of $57.6 million — the data shows 5.4 minutes in employee time saved whenever a locker is used. In addition, an overall ROI of 227 percent is reached over 10 years.

The study also indicates these lockers have a positive impact on customer satisfaction in multiple ways. First, locker users are 5 percent happier than their counterparts forced to stand in line at a customer service desk. Second, the mere presence of these lockers improves a store's image with all customers. Third, these shops are growing faster than their competitors, who have yet to embrace this trend.

Happier customers are likely to spend more, and Forrester Consulting data estimates the retailer studied will directly enjoy an additional $14 million because of this increase in customer satisfaction. This plays a significant role in the success of a retailer and the employees working in-store. 

Smart lockers in the future of retail 

It's no wonder that the pandemic caused spikes in the usage of smart, contactless lockers. As large corporations and small to medium-sized businesses become more aware of using smart lockers in their operations, they will become more prevalent in the retail industry. 

The benefits of using smart lockers to provide customers with the convenience of retrieving their items outweigh any drawbacks. As a result, expect to see more retailers using this new technology to drive sales and retain loyal customers.

Josh Middlebrooks, president, Luxer One

Josh Middlebrooks is president of Luxer One.