Contactless offerings surge, but may be ‘duct-tape solutions’ for now: report

Dive Brief:

As the past few months pushed consumers online more, retailers upped their virtual tech capabilities. Sixty-three percent of brands now have a live chat capability, an increase from 38% in 2019 and 33% in 2018, according to a report from NewStore emailed to Retail Dive. Because many businesses have had to limit store operations, retailers have repurposed staff into omnichannel associates, the report said.
Most brands provide contactless payment options for consumers, with 83% this year indicating they use the technology, an increase from 75% last year and 57% the year before, according to the report. Ads for contactless payments have spiked 152% from last year.
Brands have not reached their potential with contactless engagement, the report said. While 30% are avoiding it, 23% are struggling with it and 28% are surviving, compared to those evolving (17%) and thriving (2%).

Dive Insight:

The COVID-19 pandemic has accelerated the adoption of certain technologies, including live chat and contactless payments. NewStore's findings echo those of the National Retail Federation, which said in a recent survey that 67% of retailer respondents accept contactless payments of some kind.

The effectiveness of those technologies, however, may not yet be up to par. Retailers' implementation of contactless service offerings, whether payments or pickup, could be described as "duct-tape solutions," NewStore said. Hurdles like cost and internet connectivity can stand in the way of contactless payment adoption, experts told Retail Dive earlier this year, and implementation in a short time frame can be difficult for retailers. However, the pandemic has accelerated the pace of adoption.

Consumers, for their part, are gravitating toward touchless interactions: half of the respondents in one recent survey said they expected to use curbside or contactless pickup this holiday season, according to an analysis from BlackFriday.com and Survey Gizmo. Contactless payments have also been a trend this season. In October, Visa unveiled its Visa Tap to Phone product, which lets merchants with Android devices accept contactless transactions without additional equipment.