Why businesses must invest in innovation during COVID-19
Businesses have been asking themselves whether they can afford to invest during the pandemic, with so many other priorities to consider. But the question shouldn't be whether they can afford to invest during COVID-19, it is whether can they afford not to.
As with many other decisions stemming from the pandemic, businesses are being forced to weigh up competing priorities when considering how best to combat the new conditions presented by COVID-19. On the one hand, the potential negative financial impact of the pandemic coupled with the sheer upheaval to day-to-day operations is forcing some businesses to adopt an ultra-defensive stance.
On the other, it is clear that the world is changing. Trends that we thought were identifiable but were not expected to have a tangible effect for some time have accelerated dramatically, and their impact will be permanent. So, it can be argued that businesses can’t afford to not invest in evolution, as this will put their long-term future is jeopardy.
This dilemma is clear when thinking about the checkout. Businesses are at a crossroads, confronted with the choice of investing in more modern solutions or maintaining the status quo in hopes of a turnaround that sees customers revert to their pre-COVID in-store shopping habits. The impact of this choice is reflected in our recent Lost in Transaction research, in which 49% of in-store businesses said that COVID-19 has caused them to delay their plans to upgrade their checkout, due to conflicting priorities.
Can the checkout be a competitive advantage?
Although many in-store businesses are currently hesitant to invest in innovation, it is not for a lack of acknowledgement that there is a corresponding need. Our research shows that COVID-19 has changed the way that 67% of in-store businesses think about payments. This may be because only 57% of in-store businesses currently see their checkout experience as a competitive advantage, stressing such upgrades as emerging needs rather than voluntary features.
And where stores have made upgrades to their checkout already, there is evidence that this has been effective. 88% of stores have offered customers at least one new way to pay since the start of the outbreak, including contactless payments on delivery, and 35% have integrated a new payment method into their store checkout. Of these businesses, 80% attribute additional sales to their checkout upgrades.
Q: How have you upgraded your checkout since the outbreak of COVID-19? Select all that apply.
Q: What impact have these upgrades had on your sales?
The case for adopting a more advanced checkout process that accommodates a broader range of alternative payment methods is strengthened further by the long-term benefit of building customer loyalty that can be sustained well into the future. By embracing this mindset in the short-term, businesses can establish a competitive advantage that could help build momentum and even thrive in the face of COVID-19. Whether it is in two months or two years, the implementation of such solutions will eventually be viewed as the rule rather than the exception.
That long-term view aligns with the 51% of in-store businesses that say the impact of COVID-19 on their operations will be permanent. One way of countering that impact is to make an investment that could be similarly influential and drive growth potential where none previously seemed to exist.
Potential for online growth
Our research supports innovation in online expansion leading to growth during COVID-19, as of the 39% of in-store businesses that said revenues increased since the start of the pandemic, only 17% sold more at their physical locations. Conversely, 64% of businesses credited online purchases with their overall increase in sales, with 60% of these businesses actually launching their online checkout during the pandemic.
Q: Do you attribute your increase in business to online sales? (To businesses that reported an increase in sales during COVID-19)
While these results should give reason for optimism when it comes to the impact of introducing an online checkout, it should also create a sense of urgency on the part of businesses still mulling this next step in their evolutionary process. Presenting customers with this choice will become increasingly ubiquitous but businesses that act now can still use it as a means of differentiating themselves from the competition.
Evolving the in-store customer experience
Keeping the customer experience top of mind, our research also shows that 61% of businesses think consumers are still too concerned to enter stores and 46% said that even when customers do enter, business has been lost due to an inefficient checkout process. This not only highlights the urgency with which checkout issues must be addressed but also how a relatively simple change, especially given today’s technology and speed of integration, could encourage more fruitful results with minimal delay.
One overarching theme of our research is that despite the unavoidable challenges of the last several months, many businesses still feel spurred by the future of technology and what it means for their checkout process. Enthusiasm for the potential of 5G caused 47% of businesses to say that it would end the traditional checkout experience, while 53% said frictionless checkouts are the future of retail. Taking this to the next lofty yet logical step, was the 77% that foresee enabling customers to make in-store purchases via a mobile app checkout within the next two years.
Q: To what extent do you agree with the following statements?
The toll that COVID-19 has taken on businesses, particularly those small and mid-sized, cannot be overstated. Fortunately, their success is often driven by teams that are willing to evolve and adapt to support long-term stability. Based on that determination, supported by our research results, there is an anticipation that more of these businesses will ultimately see COVID-19 as something to inspire rather than deter them from implementing a modern checkout experience that serves a growing customer need.