The dust has settled following the “retail apocalypse” of 2018, and the numbers reveal that retail’s radical transformation is more nuanced than we once thought. While headlines in early 2019 spelled the end of retail, data from IHL Group shows otherwise. In 2019, retailers announced 2,965 more store openings than closings.
Certain retailers led the charge and emerged from the 2018 retail slump stronger than ever. In evaluating why, this much is clear: merchants that are thriving are leveraging their technology investments to evolve how they interact with consumers. Today’s consumers arrive in-store looking for expertise and an experience, and merchants need to bring this to life with technology.
Those making technology investments that allow them to offer the new kinds of experiences today’s consumer wants out of a shopping trip will come out on top of the pack. In fact, IHL Group also revealed that the brands leading their segments are investing in technology at a rate 70 percent higher than their competitors. To keep pace with the industry and outrun the current market leaders, retailers must leverage their tech investments in new and innovative ways. Here are three technology trends retailers should watch closely in 2020.
Contactless Payments Hit Their Turning Point
Contactless payments have been growing rapidly around the globe, and in 2020, adoption in the U.S. will finally reach its tipping point. By the end of 2020, we expect 50 percent to 60 percent of credit cards to have contactless capabilities enabled. Most merchants have the technology in place to accept contactless payments, but that doesn’t mean adoption will happen overnight. The real challenge will be educating consumers on the benefits and opportunities of contactless, much of which will be tasked to the card companies and merchants themselves.
Prioritizing the implementation of contactless payment technology is less about adding a new payment option and more about empowering the consumer who wants fewer steps between entering a store and leaving satisfied. Contactless payments offer the quick and frictionless experience today’s busy shoppers want, and 2020 will be the year this changes from nice-to-have to non-negotiable for many U.S. consumers.
The Evolution of Mobile
The retail industry has been talking about mobile for years, but in 2020, retailers will have no choice but to incorporate mobile point of sale (POS) more creatively as consumer demand for it reaches its peak. Recent research shows that 45 percent of retailers consider mobile POS to be essential within their omnichannel strategy.
Mobile payment technologies can turn even a big-box store into a consumer experience focused on individualized service. Mobile POS devices can also help customers skip the line to complete a transaction, leaving them with a faster, more positive in-store experience.
Those using mobile creatively — be it Starbucks with its mobile app or restaurants with pay-at-the-table technology — are designing experiences that create more loyal customers.
Biometrics Become the Norm
Each day is bringing new biometric applications, most recently with Whole Foods testing human hand scans for payment. This trend will continue to gain steam in 2020, as payment methods that were once perceived as invasive are now seen as innovative and even more secure. Consumers are quickly becoming more comfortable with fingerprint scans and facial recognition, thanks to daily interaction with these biometrics on their smartphones. Merchants would be wise to take advantage of this new consumer acceptance when planning their 2020 strategies.
The popularity of biometrics will only continue to rise as other digital payment methods, like contactless and mobile, accelerate in the new year. Retailers that embrace these technologies in new ways in 2020 will set themselves up for continued success … even in the face of another “apocalypse.”