4 realities facing retailers today

For almost two years now, retailers have done their level best to adapt to the ever-changing landscape that is commerce during a global pandemic.

It’s been no easy feat. Before the pandemic, roughly 80% of retail transactions happened face-to-face, with only 20% online. All of a sudden, stores were closed and ecommerce came to represent almost the entirety of people’s shopping. 

Retailers had to react quickly. And many did, navigating each wave of lockdowns, public safety guidelines, and consumer sentiments to connect with their customers in new ways. The result was an acceleration of digital transformation unlike anything the retail industry’s seen before.

Today, it’s nothing special to see shoppers paying with digital wallets, contactless credit cards, or using self-serve kiosks. This rapid adoption of new payment experiences has undoubtedly happened ahead of industry expectations, but the result is the next stage of retail is here.

In our episode of The future of retail podcast, we welcomed Oracle’s Stephen Horton, Solution Director, Global Solution Management - Omnichannel, and Adyen’s Angus Blest, Head of Commercial Partnerships, for a conversation on how COVID-19 has tested commercial models and what retailers can do to stay one step ahead. Here are four takeaways from that discussion.

1. The changes retail has seen were going to happen anyway

While they might have happened years ahead of the industry’s expected schedule, most of the changes we’ve seen in retail during the pandemic were going to happen anyway. Take contactless payments. Pre-pandemic, many cards were already NFC-enabled for tap-and-pay purchases. While adoption varied country by country, it took COVID-19 to make contactless usage soar. The result was in 2021, more than four out of 10 US smartphone users had used a contactless payment at least once – a figure comparable to South Korea.

Of course, there was also the fast tracking of ecommerce. Brands like Brooks Brothers suddenly saw 100% of their shopping volume come through ecommerce after closing their brick and mortar stores. Even after reopening, the company still saw over 50% volume on their online side, compared with 25-30% pre-pandemic. The investments they made in unifying their internal systems and payments partners mean they’re now set up for success going forward.

“Processes retailers brought into play to support the fact that stores were closed, they’re now refining those and looking at how they can improve them even more,” says Stephen. “Those that have been really successful, we’re now seeing retailers keeping, adapting, and expanding.”

2. Shoppers want a consistent experience across channels

Gone are the days when a customer might forgive disparate experiences across sales channels. Whether they interact with a retailer online or in-store, they want consistency now, especially at checkout. Meeting this expectation with a unified approach is well worth the effort – Adyen research shows customers spend 40% more when they shop on more than one channel.

Embracing unified commerce has helped brands like Joe & The Juice deliver seamless shopping experiences throughout the pandemic. Although COVID-19 initially forced their doors to close, the company was able to pivot quickly and continue serving customers through its pre-order app – thanks to their centralized payments and established digital channel.

“If you’ve got a common payments solution that’s sitting across channels, it presents you with the same breadth of payment methods where appropriate to shoppers across all those channels,” says Angus. “It also enables cross-channel journeys. And there are some ancillary benefits, things like helping you recognize who that shopper is across channels.”

3. The role of the sales associate in-store is evolving

Historically, sales associates have been relegated to either behind the counter or on the floor restocking shelves. But with the adoption of curbside pick up and mobile POS, associates are slowly being freed to move around within a store to better serve shoppers.

“The move to getting the associate out from behind a fixed location to being flexible in-store is significant,” says Stephen. “Once I move the associate out onto the shop floor with a mobile device, I can start to interact with a customer at the selection stage. Now I can engage with them at the point they’re considering product. The opportunity to drive the upsell, the cross-sell, comes into play, because the associate now has a reason to engage early.”

One thing Angus and Stephen called out is that being able to serve customers wherever they are on the floor will take more than just an investment in mobile POS. The quality of training is different and retailers should factor that cost into their budgets when jumping on this trend.

4. Buying in-person isn’t going away anytime soon

There’s no doubt consumers have missed shopping in person. But as they return, they want to see an upgraded experience that reflects the times they’re living in. Whether that’s making better use of store layouts, embracing mobile POS, or making it easier to purchase with digital payment methods, retailers have a unique opportunity right now to make in-person even better.

“One of the key things that we’ve identified as we come out of the pandemic is the experience of shopping,” says Angus. “Over the last 18 months, as we’ve been in and out of lock down, because we have omnichannel, multichannel, people have been able to buy the same things they’ve always been able to buy. But what they have missed is the experience of shopping. What retailers are now able to do is make that experience better. So those store associates are engaged with making that experience for the shopper a past-time. People are so excited to get back out again and have those experiences because they haven’t been able to in a long time.”

Want more Oracle and Adyen insights on the future of retail?

Although the last eighteen months have been a trial by fire for retailers, alongside challenge bloomed opportunity. From contactless payments to the return in-store, retailers have a chance to harness these factors and come out of 2021 stronger and more flexible.

During their conversation, Stephen and Angus touched on the many ways COVID-19 has forced retailers to rethink their sales channels as traditional retail models were challenged. Along the way, they explored technologies and strategies retailers can adapt to prepare for what’s next.

To hear more from these two industry veterans about how brands like yours can get ready for the future of retail, we invite you to listen to the full podcast episode on Adyen’s website here. We know things are changing fast and to help, you’ll also receive a copy of our Adyen Retail Report.