Retail

Why Large Retailers Are Mandating Masks

Digital 3.0 Retailers Focus On Safety, Speed

Sometimes a mask is more than a mask. When Best Buy, Starbucks, Kroger and Walmart mandated that all customers wear masks to mitigate the spread of COVID-19 this week, they weren’t just being compliant as corporate entities. And while they made the move with their customers' well-being in mind, they were actually focused on more than that. All four companies — as well as other retailers — are fitting into the framework of a platform PYMNTS calls Digital 3.0 FIT®.

As a result of eight weeks of COVID-19 research, the new PYMNTS framework has drawn several conclusions about consumer behavior during the pandemic, as well as what it might look like after it fades. It has set out four major elements for how all companies — particularly retailers — must organize their go-to-market strategies and business models for the short term, with an eye toward the behaviors that will stick if and when the pandemic ebbs.

The first is basic: health, which is where Walmart, Best Buy, Kroger and Starbucks have shown up. It is the wood, nails and basic structure of the Digital 3.0 FIT® framework. Today, consumers are making decisions about every aspect of their lives — how they live, work, shop, buy food, do their banking, eat, travel, work out, socialize (or not), spend their leisure time and just about everything else — with an eye toward protecting their downside risk of loss from contracting the coronavirus, dying from it and/or spreading it to others.

So far, retailers have done a decent job here. Companies like Kroger have published playbooks about how to achieve social distancing in stores. Organizations like the National Retail Federation (NRF) and the Retail Industry Leaders Association (RILA) have advocated for government mask mandates to take the onus off retailers and in-store sales personnel. These efforts have met with varying degrees of success. The retailers mentioned at the beginning of this piece have taken a stance on health that should have been taken by federal and local governments. If they want to get, keep and grow within the Digital 3.0 framework, these health-based decisions will need to become commonplace.

“We know some people have differing opinions on this topic,” admitted Walmart in a statement. “We also recognize the role we can play to help protect the health and well-being of the communities we serve by following the evolving guidance of health officials like the CDC."

After the structure of the framework has been built, the next element of Digital 3.0 FIT® will be eliminating friction. This will include some basic and predictable elements, such as contactless payments. But that’s not all. The success or failure of any digital platform is its ability to remove friction — to make it easier for people and businesses to interact at scale and to turn a profit. Getting to scale, profitably, is always make-or-break. So removing friction can involve anything from contactless payments to efficient customer service to clienteling. To enable strong customer relationships in the Digital 3.0 era, eliminating friction should accomplish the goal of easy interactions at scale. It’s what consumers expect. Meeting those expectations has been key to retail success long before the pandemic.

Eliminating friction has been less transparent than the focus on health. Clienteling is a perfect example. If a consumer can’t get to the boutique to browse and try on a new summer outfit, for example, the friction stems from a concern about health. Before the pandemic, retailers could simply keep feeding the customer emails and text messages about new clothing options, with an invitation to come to the store at her convenience. Digital 3.0 FIT® says the retailer needs to accept and honor consumers' health concerns. To be FIT, the next move is to extend the capability to eliminate the friction. That might mean assigning a personal shopper with a special app to show augmented reality (AR) images of inventory.

The third element relates to inertia. Companies that want to be Digital 3.0 FIT® must find ways to lower the resistance to change. Consumer inertia tends toward the familiar. The FIT® framework says inertia must be rerouted by moving consumers toward a digital-first experience. The digital platforms and enabling technologies created a decade or more ago made these pandemic-fueled shifts an easy transition, breaking whatever inertia might have prevented them in years past. With that inertia finally overcome, the consumer’s decisions to stick with a digital-first experience become a safe and attractive alternative that saves time and eliminates the friction of being exposed to the virus.

How to reroute potentially retrograde inertia? Removing analog options is one way. One example is what Apple has done with Apple Pay. The company has removed the option of getting the Apple Card outside of Apple's digital ecosystem. And it has added the positive options of new partners, such as Afterpay. Future options will include using the digital wallet to remove payment friction by enabling the use of QR codes. The inertia is then pushed toward the digital experience.

The fourth element is time. After capital, it is the consumer's most precious commodity. The Digital 3.0 FIT® company will design digital experiences to save time — and also to make provide an efficient and profitable experience. Time is related to eliminating friction, because a seamless digital experience will save time. It also relates to inertia, because the options presented to push consumers toward the Digital 3.0 experience will also save time.

But saving time is not as cut and dried as it may seem. Take appointment selling, for example. This can be a digital experience when clienteling is involved. It might not be purely digital, because in some cases it invites consumers into the store, as Best Buy does with its appointment selling. But it fits the Digital 3.0 FIT® framework because it takes the consumer’s health into consideration first, eliminates friction, moves the inertia toward a new experience and saves time.

The Digital 3.0 FIT® framework is still in its nascent stages. But as retailers and other companies adjust to the digital shift, we can expect to see more examples of health-first experiences followed by the triumvirate of eliminating friction, rerouting inertia and saving time.

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NEW PYMNTS DATA: HOW WE SHOP – SEPTEMBER 2020 

The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.

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