Insights

Frictionless Commerce is Here to Stay

Subhodip Bandyopadhyay General Manager- Emerging Digital Technology, UST

When the world changed overnight in early 2020, consumers quickly altered their habits; and the retail sector had to change. For the benefit of consumers and their frontline employees alike, stores embraced new strategies and technology to get people in and out quicker.

Fear of catching the virus and strict government regulations for public places made the in-store shopping experiences less-than-optimal for consumers. They turned to online shopping for items of daily need usually purchased at nearby micro-markets, departmental stores, and grocery stores.

The initial phase of hoarding led to instant stock-outs for retailers. Decreased customer footfall and negligible monthly sales, a need for drastic in-store format changes, and outdated infrastructure and technology cumulatively added to their misery. In short, customers were looking for as close to a frictionless experience as possible to avoid unnecessary exposure to COVID.

Key takeaways

• Consumer habits changed overnight during the pandemic, prioritizing online ordering whenever possible.
• Retailers that had already embraced digital transformation had frictionless options, rising to the challenge of meeting customer demands.
• Retailers are bracing for more challenges in their operations because consumer habits continue to change.
• The rise of same-day delivery services will further push retailers to demonstrate their value and commitment to ease of shopping at their locations to stay competitive.

What is frictionless commerce?

Frictionless commerce uses technology and data from various devices, apps, and websites to integrate buying opportunities seamlessly. Consumers today don't like delay or frustration when completing a transaction. Frictionless commerce enables them to buy a product or service anywhere, anytime, with few clicks or steps, get what they need quickly, and exit without waiting in lines.

Frictionless business solutions reduce the hassle and shorten the time and distance between customers and the products and services they want.

4 reasons why frictionless commerce is here to stay

The increasing adoption of frictionless commerce is no mere pandemic stopgap. It has ushered in a movement of convenience that consumers will not give up anytime soon. Here are four reasons why:

Preference for a safe and hassle-free shopping experience

In-person shoppers have been more inclined to prioritize stores that made getting in and out as quickly as possible in the last two years. Customers have hugely benefited from frictionless or contactless shopping experiences and are in no hurry to go back to the old ways of shopping. While mask mandates are going away, many still wear them and may wish to minimize the unnecessary time they spend among crowds. A frictionless customer experience is the best way to serve these customers.

Ultra-convenient one delivery at a time

There is an accelerated interest in door-to-door delivery businesses, many of which are raising millions in funding. Though some of these businesses have been around for a while, the dramatic change in consumption dynamics has created a high-demand market that was relatively small before the pandemic.

Expectation of cost-savings amid inflation

Consumers are now hyper-conscious of costs and expect retailers and convenience stores to help them save money. This puts downward pressure on those stores to reduce costs to pass savings onto consumers. It would only be possible when the retailers themselves reduce the costs such as labor, infrastructure, and others to transfer the benefits to consumers. Providing a frictionless shopping experience is the best way to serve customers while reducing costs.

Low cost of switching

Consumers are forcing retailers to differentiate, but the low switching costs between retail outlets are also helping. Businesses have realized the importance and benefits of a hybrid model in the post-pandemic era, involves a good mix of online and physical shopping for daily needs. Addressing the changing dynamics, large and medium retailers across the globe are adopting an omnichannel business approach with both online and physical presence to create a connected and customer-focused experience. The omnichannel model enables shoppers who begin browsing on a brand’s website to have the same experience whether they visit the brand’s mobile app, social media accounts, or brick-and-mortar stores. The user experience is also seamless across devices like mobile phones, tablets, desktop computers or laptops.

The emergence of frictionless commerce

While online shopping exploded during the pandemic, it seems in-store shopping is slowly returning to normalcy. Most people will opt for a convenient hybrid shopping experience that delivers quality and saves time and money. A frictionless store is the best path forward for retailers. There is immense opportunity for retailers to bring the best digital insights into their physical reality and integrate both for a seamless customer experience. Retailers must modernize their brick-and-mortar stores within an omnichannel framework that integrates all channels seamlessly into one whole. Customers want to browse anywhere, buy anywhere, and have their orders fulfilled anywhere, and retailers need to deliver on all three at scale.

UST has created a smart hybrid frictionless solution for retailers operating in the supermarkets and convenience stores segment. It caters to consumers who wish to have a frictionless experience when shopping in person.

For a more in-depth read on the topic, read our eBook/report titled Frictionless Commerce: Delighting Customers with Autonomous Checkout

To learn more about our unique approach, download our eBook Frictionless Commerce for retail in 2022 and beyond.