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Coronavirus is making touch-free shopping a necessity

coronavirus

Amazon Go stores, delivery drones and contactless terminals will play a big role for consumers.

Burger King has started airing ads about making its drive-thrus contactless for both payments and pickups. Publix, the Florida-based grocery chain, this month said it completed its rollout of tap-to-pay registers at its more than 1,200 locations across the Southeast. And Walmart, the largest retailer in the world, late last month said it will provide no-contact pickup, delivery and in-store checkout.

There are many uncertainties about how the coronavirus will impact people's health, their jobs and the economy, but some consumer trends have already become so obvious that they suggest a long-lasting shift in people's behavior when the COVID-19 crisis finally departs. One of them is the move toward contactless transactions in the US getting supercharged, as shoppers try to restrict what they touch in stores -- if they go out at all -- to avoid catching the virus. Studies have shown that the coronavirus can live for 24 hours on cardboard and several days on hard surfaces.

Now retailers that remain open are scrambling to respond to this new consumer need. When thousands of other merchants reopen following the pandemic, they will have to reevaluate how they operate their stores to coax shoppers back. Where backers once pitched contactless technologies for their convenience, retailers will give them new consideration for their health and safety benefits.

These technologies range from the mundane, with payment terminals at your local grocer enabling contactless payment services like Apple Pay, to the futuristic, with Amazon Go stores, delivery drones and sidewalk robots getting more enthusiastic support from the public because they enable social distancing.

"I do believe this is an opportunity," said Oz Alon, co-founder and CEO of HoneyBook, a financial tech startup in San Francisco. "This is a huge event in the world, people are going to change their behaviors and a lot of things that have struggled for adoption will get a new push."

The expected shift to contactless tech comes as the retail world has faced enormous challenges during the outbreak. Grocery stores and online retailers that have stayed open are dealing with a flood of new shoppers. Other retailers face an uncertain future, with iconic brands including Apple and Nike closing their retail locations. Consumers, too, will be forced to reconsider every aspect of their shopping, even things that were second nature: Is it OK for me to pick up a piece of fruit at a grocery store and put it back? Should I sign my receipt after payment? Do I sanitize my boxes of cereal?

As the federal and state governments start to discuss what reopening the economy will look like, contactless technologies are going to be part of the equation, especially in busy places like transit systems and stadiums. It's important to note, though, that all this sophisticated tech still won't replace health professionals' recommendations to wash hands and wear a mask in public.

More Apple Pay, less cash

People reading this story in other countries might find it strange that the US is so far behind in contactless payments. After all, places including Canada, England, Australia and Poland have already made contactless the default form of in-store payment when using plastic.

Visa and Mastercard have been working to convince consumers to make the switch, seeing tap-to-pay as an easier and faster way to conduct a transaction compared with cash, magnetic stripes and chip card payments. If you have a more enjoyable experience using your card, you're more likely to use it again and again -- and that's good for these payment processors.

This work has been slow going, as retailers have replaced old payment terminals with contactless ones and as banks mail out new contactless cards to their millions of customers. These efforts are now getting ramped up as consumer interest increases. Mastercard said it's reinforcing its messaging on contactless methods during the crisis.

Transit authorities have already been introducing contactless payments, and that should make it a little easier for people to venture outside again. New York's Metropolitan Transportation Authority turned on contactless payments in some subway stations last May, allowing people to tap and pay at turnstiles. That helps people avoid waiting in line, tapping a pay-station touchscreen and dipping a card -- all activities commuters likely want to avoid these days.

Last year, the payment industry widely believed these types of tap-to-pay transit terminals, which also accept Apple Pay and Google Pay in phones, would spark the move to contactless transactions in the US. It appears it will likely be the coronavirus instead.

"I can see consumer behaviors changing for sure from the situation we're in," said Linda Kirkpatrick, president of US issuers for Mastercard. "When those consumer behaviors change over several months, they tend to stick."

While Mastercard declined to offer recent data on contactless transactions, Kirkpatrick said she's already seen several merchants put up signs directing shoppers to use that form of payment. To cut down on touching shared objects, she added, her company is also encouraging retailers to stop requesting signatures for transactions, something Mastercard, Discover, American Express and Visa stopped requiring two years ago.

Drones, sidewalk robots and Amazon Go

There are a wide variety of newer retail technologies that are likely to get a push in adoption due to the pandemic.

Delivery drones, which are limited in the US by strict regulations, have already experienced this increase in demand. Alphabet, Google's parent company, has seen orders using its Wing drones in rural Virginia, where it's running a pilot program, more than double.

"The technology is particularly useful at a time when people are homebound in many cases and the need to limit human-to-human contact is important," Wing spokesman Jonathan Bass told Bloomberg this month.

Starship, whose sidewalk robots deliver snacks and breakfast, said it's seeing a surge in demand too.

"We are working as quickly as possible to expand our robot delivery service so we can help more people and we've had grocery stores, restaurants and other delivery companies get in touch to ask for assistance," the company said in a statement. "We have gone from a convenience to an essential service for many people. The community is asking us to expand quickly."

Another concept is Amazon Go's Just Walk Out system, which lets you check in at a turnstile at the front of a store using your phone, pick up whatever you want to buy, then leave without stopping at a cashier.

Amazon has created about two dozen of these stores so far, and only its Seattle locations remain open during the pandemic. Early last month, Amazon started offering this technology to other retailers, a concept that may have seemed unlikely at first since competing stores are loath to work closely with a major rival. Now it would surprise no one if Amazon is getting more requests for the tech than it can handle. Amazon declined to comment for this story.

Moving to digital money

The growth in cashless services is likely to weaken the oldest lasting form of payment: cash.

Kickfin, which essentially operates as Venmo for businesses, said it's seeing a surge in interest from restaurants during the crisis. Kickfin's service allows restaurants to pay out tips to their workers digitally, instead of in cash.

"No one's touching cash; no one's paying with cash," co-founder Brian Hassan said.

While plenty of people are likely to avoid banknotes, the World Health Organization last month said there's nothing wrong with handling cash these days, so long as you wash your hands, especially before handling or eating food.

Also, the concept of a cashless society has been criticized as discriminatory against people without bank accounts and cards and creating the potential of tech companies vacuuming up too much personal data. Those concerns about getting rid of cash will persist even after this health emergency.

Jane Barratt, chief advocacy officer at financial tech company MX, said the move to contactless transactions is part of a much broader trend, with people being more careful with their money during a financially unstable time. Consumers are now digging more deeply into their banking apps and finding new tools like touchless payments.

With this added interest in contactless methods, she said, a lot more companies will likely pitch new payment technologies for a post-coronavirus world.

"I think there will be an explosion of services and functionalities that will come out in the next few months," Barratt said. "Necessity is the mother of invention, and there's a whole lot of necessity right now."

 

This article was originally published by Ben Fox Rubin, cnet.com

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