Could click and collect become the new norm to shop?

Could click and collect become the new norm to shop, asks Madhur Mehra, MENA head of merchant sales & acquiring at Visa. Just about any brick-and-mortar store owner will tell you that the coronavirus pandemic has undoubtedly turned the present and future of retail upside down.

Even while businesses across the UAE have reopened, large populations are still sticking to working remotely, physically distancing and limiting time shopping in-store, driving a surge in demand for contactless commerce.

Visa’s global ‘Back to the Business’ study, which assessed the financial impact of COVID-19 on small and micro businesses (SMBs) worldwide, found that 9 out of every 10 consumers in the UAE have changed how they pay for purchases. These included 59% preferring to shop online when possible (59%), using contactless payments (52%) and avoiding the use of cash (40%).

Nearly all (90%) shoppers also said they would switch to buying from a store that installed contactless payment systems, and almost three in four said they wouldn’t shop at a store that only offers payment methods that require contact with a cashier or other shared devices.

Also read: Contactless transactions set to double digital payments business

So how do you keep your physical store alive in a time when footfall has plummeted, and people are still cautious about spending hours browsing for non-essential retail in-person?

Prompting consumers to use omnichannel services like buy online, pick up in-store (BOPIS) could be the way forward.

Stores, both large and small, have been experimenting with the BOPIS model and or curbside pickup services amid COVID-19 to compete against their online-only rivals. On the one hand, they have been upping their digital presence to make it easier for customers to browse their store online; on the other, they have geared up for the logistics of contactless customer pickups.

BOPIS bridges the in-store and e-commerce divide. It allows shoppers to buy online but experience the instant reward of retail therapy by safely picking up their items within hours rather than waiting for a delivery. Most importantly, consumers are thrilled to save on shipping fees.

A 2018 report titled ‘The ROBO Economy’[1] (Research Online Buy Offline), which studied consumer behaviour at more than 30 global retailers, signalled the already growing trend that has now been accelerated by the pandemic. The report found that online research before buying linked often to online purchase behaviour, but that almost $5 is spent in-store for every dollar spent online following online research.

Meanwhile, more recent research by global marketing firm Criteo noted that 80% of the US customers research their purchases online, but 75% still prefer buying products in physical stores[2]. The Shopper Story report[3] also referred to 2020 consumers as “detectives” because it found that a more significant share of shoppers began their product hunts outside of search engines and marketplaces in 2019 compared to 2017, and instead started their searches on retailer or brand websites.

We see our digital-savvy population in the UAE and the broader Middle East positively reflecting this global trend at warp speed. With physical outlets still facing tremendous challenges, a hybrid value proposition like BOPIS has the potential to become the new way to retail in a pandemic and post-pandemic era. In addition to driving in-store visits, the model also provides opportunities to upsell and gives logistical relief to online distribution. The curbside pickup variant allows sellers to limit in-store traffic for long periods still and provides a faster checkout experience.

But while BOPIS supports social distancing, and helps customers get their orders sooner than typical e-commerce delivery as well as avoid shipping fees, sellers must also make sure to account for security risks. Sellers may be exposed to an increased risk of fraud because BOPIS transactions may contain less information for a business to assess risk, such as a shipping address. Unlike conventional in-store transactions, a BOPIS transaction also does not benefit from the secure capture of payment data like chip-on-chip or tap-to-pay methods.

Visa has developed a best practices guide for fraud prevention strategies[4] that include implementing an actively maintained e-commerce fraud management solution with dedicated rules for the transaction types and employing a manual review process for high-risk or high dollar transactions. Sellers can also benefit from investing in device profiling technology to link the transaction to other known positive or negative transaction history.

So, could click and collect become the new norm to shop?

No matter what happens in the coming months, one thing is clear – COVID-19 has turned contactless commerce into a key differentiator for retailers in the UAE, and rapid adoption is now critical. As retailers work to drive shoppers back to their stores safely, BOPIS is a transformational step towards creating a seamless omnichannel shopping experience to achieve better sales.

By Madhur Mehra, MENA Head of Merchant Sales & Acquiring, Visa

[1] https://www.bazaarvoice.com/resources/the-robo-economy-infographic/

[2] https://www.criteo.com/insights/shopper-story-2020/

[3] https://www.criteo.com/insights/shopper-story-2020/

[4] https://usa.visa.com/dam/VCOM/blogs/bopis-best-practices-visa.pdf