The future of retail: How technology is improving the way we shop
In the wake of the pandemic, the retail experience has become more engaging, customized and convenient
To say 2020 has been a year of transformation is an understatement. As our worlds moved indoors, our collective reliance on technology increased significantly and new habits began to emerge.
Change can be jarring, but it can also be refreshing. Over the past several months, many of us realized that meetings are just as productive over video calls and almost everything is better when it's delivered directly to your doorstep.
In response, many businesses have had to re-imagine their connection to consumers, particularly where retail shopping is concerned. The adoption of new technologies has been accelerated to remove friction from the physical store environment, making in-person purchases seamless and customized, and payment more secure. Online retailers have responded by making shopping from home experiential rather than simply transactional.
"COVID-19 is dramatically affecting the retail landscape in many ways," says Amber Mac, host of The AmberMac Show. "What might have taken five years, in terms of retailers adapting to selling online, has now taken five months. There is no more ignoring the importance of digitizing your business."
More than ever before, merchants are alleviating pain points and enhancing customer interactions. "This is all just focused on building the best solutions, experiences and technologies to help the consumer," says Stephane Wyper, Senior Vice President, Retail Innovation, Mastercard.
The new normal, at least where shopping is concerned, is more engaging, more customized and more convenient. The following five trends, which surfaced at the beginning of the pandemic, are driving innovations that will inevitably shape the way we shop forever.
E-commerce is more popular than ever
COVID-19 has accelerated the digitization of how we work, live and shop, and recent research reveals that we've become even more interested in purchasing everything from groceries to garments online.
According to a new report by Mastercard, which analyzed overall retail sales across all payment types including cash and cheque, e-commerce sales in Canada more than doubled (123.2 per cent) in May compared to the year prior, as shoppers increased their use of online shopping and curbside pick-up.
"This is obviously largely driven by the fact that most of us, for a portion of time, were not… going into physical stores but were relying heavily on e-commerce as a mechanism to purchase," Wyper explains.
In an effort to further enhance the e-commerce experience, Mastercard is expanding Click to Pay to Canada in early 2021. Click to Pay with Mastercard is designed to make the online guest checkout experience simple and secure for consumers across web, mobile sites, mobile apps and connected devices. This technology not only tokenizes your payment information to keep it safe, it also allows you to pay with just a few clicks, rather than having to remember account numbers and passwords.
Online shopping is becoming more immersive
As stores shuttered at the onset of the pandemic, customers began to crave the same high-touch, in-person service they'd come to expect from their favourite brands in the digital space. In response, virtual concierge services, through which customers book one-on-one interactions with store employees from the comfort of home, began to take off.
This nods to a trend Wyper says he's noticed emerging over the past several years – a move towards shifting e-commerce experiences from simply transactional to something that is much more experiential in nature.
He points to a partnership between Mastercard and goop, a lifestyle brand founded by actress Gwyneth Paltrow, which leveraged technology called 'immersive commerce' designed to provide a deeper online shopping experience. goop opened up a physical store in downtown Toronto in 2019 and 3D video was captured of the location, which was brought to life digitally.
"Shopping online through a browser it almost felt like [you were] walking around the store interacting, learning more about products and getting recommendations as [you were] going through that journey," Wyper explains.
Brick and mortar experiences have been elevated
Amidst the proliferation of online purchasing options, Mac and Wyper both still see a place for innovative brick and mortar stores.
"I do think that a warm, inviting and positive in-person experience in retail will absolutely be a reality for some creative retailers," says Mac. "We are human, which means we crave connection, and there is no better way to do that than in a shared space. However, it can't be an ordinary experience; it must be an extraordinary experience."
"I think that's one thing I'm excited about: The evolution of the physical store," Wyper admits. "They're going to continue to change and I think you're going to see a lot of technologies being embedded in that environment. The focus will be on trying to provide a unique or contextual experience for shoppers."
From product recommendations and navigating store aisles, to enabling visual search and tracking consumer preferences, Artificial intelligence (AI) will play a big part in shaping these customized customer interactions in the physical stores of the future.
Wyper says Mastercard is already using AI to enhance customer experiences at drive-through restaurants, citing recent partnerships with American fast food chains White Castle and Sonic Drive-In.
"We've created an AI solution to help the menu become contextualized based on specifics around location. So, weather, time of day, purchasing patterns, etc.," Wyper explains. "The intention there is to try and make the in-store experience much more seamless, and really help the shopper identify products they want to purchase in a much faster way."
Cash is becoming a thing of the past
Scrounging around for change to pay at the local cash-only coffee shop or fruit stand may soon be a distant memory. As fears of COVID-19 transmission grew, many of these businesses moved away from accepting cash entirely. Consumers, too, abandoned bills and coins in favour of contactless payments.
"We all knew the contactless world was coming, but now we're moving in this direction in the interest of safety," says Mac. "My guess is that, whether you run a kiosk at a farmers market or an independent clothing shop, cashless transactions are in your future."
"We've really seen an uplift in contactless adoption within Canada," Wyper explains. "As part of a survey Mastercard conducted globally with about 19,000 consumers, there was a real shift in terms of the interest and level of adoption for contactless as a preferred payment mechanism."
Mastercard is taking contactless payments one step further by introducing new technology that will eliminate the need to check out entirely.
The Shop Anywhere platform, which is currently being piloted at select Circle K convenience stores and Dunkin' Donuts locations, allows these businesses to do away with wait times and checkout lines, while offering secure payment options. This technology can also give shoppers access to exclusive merchandise and store entry outside of normal opening hours.
Circle K's computer-vision-based activations mimic futuristic vending machines that allow customers to grab snacks and drinks simply by opening an app and scanning a QR code, while Dunkin' Donuts' customers will be able to approach select stores, pick up their coffee and doughnut, and walk away without any face-to-face interaction.
Social media is the new storefront
Window shopping no longer requires, well, windows. Social media platforms looking for a piece of the e-commerce pie have evolved to make perusing products from the comfort of home easier than ever.
Instagram Shop and Instagram Checkout, which launched earlier this year, effectively transform the app into a one-stop shop catered to each individual shopper's algorithmic preferences.
After much success in China, live commerce, often referred to as QVC for Gen Z, is also making its way onto western social media platforms – a development which has many brands considering how they sell via social media direct to consumers.
"I think social media is absolutely the new storefront and influencers are the new greeters," says Mac. "I think the next phase in this shift to social commerce is live commerce. We know how successful the shopping channels have been over the past few decades, so I expect that model will soon be live featuring our favourite influencers in our feeds."
"Across North America, [brands] are thinking about how they enhance their digital experience, how they make it more experiential, and equally how they extend their reach into the new ways that we, as consumers, are purchasing specifically through social channels like Instagram and YouTube," says Wyper.
The future of shopping, according to Wyper, will be channel agnostic — melding social interactions with digital and brick and mortar touchpoints and leveraging technology and data to predict individual consumer needs so sellers can respond to them.
"I think what we're going to see is this idea of a unified singular experience," he explains. "We're going to start interacting in a blend of ways with brands. I think that is the thing that we will see coming out of this that will continue: we'll shift away from separate physical and digital experiences and view it as the same experience."
This is paid content produced on behalf of Mastercard. This is not CBC journalistic content. To learn more about Advertising and Paid Content on CBC click here.