Three hot retail tech trends from the summer of ‘new normal’
As summer 2020 draws to a close, it is time to look back on how COVID-19 helped shape some key developments in retail technology.
Three retail technology trends that stood out during this summer were online grocery delivery, contactless payment, and virtual product pitch events for small-to-mid-sized businesses (SMBs). While the pandemic-driven “new normal” was not strictly responsible for any of these trends, it helped accelerate their development and frame their direction.
Here is a brief overview of each trend.
Online grocery delivery began surging in popularity when much of the country shut down due to COVID-19 in mid-March. The trend has only intensified even as stores reopen. On-demand delivery platform DoorDash began partnering with several supermarket chains as it launched online grocery delivery earlier this month.
In addition, retailers that have launched or expanded online grocery delivery offerings since June include Target, Walmart, Hannaford, Stop & Shop, Fresh Direct, Fresh Thyme, and even Big Lots. Grocery has long been a popular vertical for home delivery of online orders.
However, customer desire to minimize exposure to crowds and public spaces during the pandemic, combined with the unavoidable need to purchase groceries on a regular basis, have sped up the shift to online delivery in grocery. The movement by non-traditional players such as DoorDash and Big Lots into the space speaks to how prevalent the trend became this summer.
Like online grocery delivery, contactless payment was an existing trend which perfectly fit customer needs as the COVID-19 pandemic became a fixture in shoppers’ lives. According to the 2020 State of Retail Payments study released by the NRF in August, 58% of retailers accept contactless cards and 56% take digital wallet payments on mobile phones.
Since January 2020, no-touch payments have increased for 69% of retailers surveyed, of whom 94% expect the increase to continue over the next 18 months. Kroger, CVS, and Circle K are just three retailers to begin pilots or wider rollouts of contactless payment programs this summer.
In addition to providing an additional layer of social distancing, contactless payment offers several benefits that should outlast the pandemic. These include the immediacy of payment, elimination of queues, and ability of shoppers to conduct payments with their own devices.
Virtual SMB product pitches
Several retail platforms have issued calls for small-to-mid-sized businesses (SMBs) to enter virtual product pitch competitions this summer. Walmart and QVC/HSN offered virtual versions of existing contests that had previously been held in-person, while global e-commerce heavyweights Amazon and Alibaba both introduced new virtual programs.
The decision to run these competitions virtually during a global pandemic is fairly obvious, but there is at least one other underlying reason for the heightened interest in SMBs. The homogenization and consolidation of retail occurring in the wake of COVID-19 is leaving two types of retailer standing – the mass and the niche.
By recruiting SMBs to their platforms, mass retailers can easily fill gaps in their assortment and differentiate themselves from competitors offering generally similar merchandise and prices. In particular, Walmart’s, Amazon’s and Alibaba’s emphasis on high-volume products from established brands may dissuade SMBs, driving these retailers to reach out to them with tailored online competitions.