Is COVID-19 Presenting Businesses With the Ideal Opportunity to Invest in Innovation?

In-store businesses continue to confront evolving challenges, competing priorities, and a sense of uncertainty when it comes to the sustained impact of COVID-19 on their operations. One of the most pressing questions being faced is whether to invest in solutions that offer customers a more convenient and innovative checkout experience.

While forward-thinking in-store businesses already recognize changes in customer expectations, 49 percent of those businesses in our recent Lost in Transaction research said that conflicting priorities due to COVID-19 have caused them to delay plans to upgrade their checkout.

Is COVID-19 a Catalyst for Change?

Taking a closer look at how COVID-19 is forcing in-store businesses to re-evaluate their current setup, 67 percent of those in our research said that the pandemic has changed how they think about payments. Moreover, only 57 percent said they currently see their checkout experience as a competitive advantage, showing how important it is for upgrades to become a larger focus.

To explore the opportunities inherent to implementing a more innovative checkout experience, it's equally important to acknowledge the significant resource constraints faced by today’s retailers. For those prudently weighing the benefits and risks of such investment, our research provides encouragement regarding the growth potential that innovation can unlock.

For example, there are the 88 percent of stores that introduced at least one new way to pay during COVID-19, including contactless payments on delivery, and the 35 percent that have integrated a new payment method into their store checkout. Eighty percent of these businesses credit these upgrades for generating additional sales.

In determining whether to invest in the opportunities that innovation presents, while simultaneously addressing the current daily challenges of running an in-store business, retailers need to evaluate for the long term. As our research shows, more than half (51 percent) of in-store businesses say the impact of COVID-19 on their operations will be permanent, suggesting that long-term planning could give way to more retailers embracing innovation in their checkout.

Responding to Customer Needs

Further highlighting the sense of urgency with which retailers should approach the future of their checkout process is the 39 percent of in-store businesses that said revenues increased since the start of the pandemic. Only 17 percent of these businesses sold more at their physical location, while 64 percent credited online purchases for their overall increase in sales. Just as revealing is that 60 percent introduced their online checkout during the pandemic, showing that now is the time to act for those hoping to differentiate themselves from the competition.

Key to differentiating one’s business in the current landscape is being able to engage customers by responding to their shopping and payment preferences. Our research shows that businesses are keeping this top of mind, with 61 percent finding consumers are still too concerned to enter stores, and 46 percent saying that business has been lost due to an inefficient in-store checkout process. Fortunately, advances have been made to help facilitate the rapid integration of innovative and cost-effective solutions, which can help businesses modernize and adapt to current market challenges.

The extent to which innovation will continue to change the customer-merchant dynamic cannot be overstated. Our research shows that many in-store businesses are anticipating that future, with 47 percent saying that 5G technology will end the traditional checkout experience. In addition, 53 percent believe that frictionless checkouts are the future of retail.

As retailers face unprecedented challenges that drive difficult questions about investment and resource allocation, it's important to consider the emerging opportunities presented by COVID-19. Innovation in checkout will not be a focus tied solely to the pandemic, but rather a new normal that will benefit those quick to adapt.

Afshin Yazdian is CEO, U.S. Acquiring, Paysafe, which provides simple and secure payment solutions to businesses of all sizes around the world.