Retail Customer Experience “2020”

Early in 2020, retailers were busy putting a lot of effort into reinventing the retail customer experience. Key trends involved modernizing queueing systems, remodeling stores, and knocking down the point-of-sale cash wrap that created a constant barrier between retail reps and customers.
They were replaced with tablets and other mobile devices that allow reps to roam untethered throughout the store’s footprint alongside customers, browsing freely and helping customers give the merchandise a hands-on try.

Suffice to say, customers liked the change, and it was this experience and level of service that were keeping their love affair with brick-and-mortar retail alive, in spite of the surge toward e-Commerce across many industries in recent years.

Enter pandemic

Then along came the COVID-19. Schools were rapidly shut down, businesses closed, shelter-in-place orders put into effect, and all but the most essential retail brick-and-mortar shuttered across the nation in an attempt to flatten the curve through social distancing. COVID-19 punched the “fast forward” button on consumer adoption of e-Commerce and tested the limits of most retailers’ digital transformation efforts as consumer transactions shifted almost overnight to eCommerce, home delivery, and emerging models like Buy Online Pick Up in Store (BOPUS) and Curbside Pickup.

Consumers who had previously resisted these models were left with no choice but to adapt – and quickly. Many found themselves pleasantly surprised by their experiences. In fact, a late April CommerceHub survey1 found that many of these pandemic-driven trends are here to stay: 68% of consumers plan to continue to use an e-Commerce-based home delivery service for essential items and 59% plan to continue to use curbside pickup – even after the COVID-19 crisis subsides. During a time of crisis, consumers have found not only convenience, but also comfort in these options, with 65% saying home delivery remains the safest option.

Retail in a post-COVID19 world

So as we turn the page on the next chapter in the COVID-19 story – the one that allows us to safely resume daily life amidst a pandemic that still poses substantial threat – what does all this mean for our brick-and-mortar retail operations as we re-open? As we bring our employees back to work and re-open our stores’ doors, will the shoppers return? And if they do, what will it take to ease the fear that occupies their minds as they move through a store?

According to a survey by First Insight2, less than half of consumers feel safe returning to stores as they re-open, with only one-third saying they’d feel safe visiting a mall or department store. A McKinsey survey3 published this August found that as consumers decide where to shop in-stores, they are looking for increased sanitation procedures and enhanced precautions, such as moderated or controlled store entry, clean carts, social distancing, one-way aisles, plexiglass dividers at checkouts, and masks or gloves on patrons and employees.

According to a BCG study4, 40% say social distancing will be a permanent part of their lives. Nowhere is this more likely to be true than in the retail shopping experience, with a Shekel survey5 reporting 87% of shoppers say they would prefer to shop in stores with touchless or robust self-checkout options.
All of the above are very strong evidence that if we want shoppers to feel safe returning our stores, it’s time to re-imagine the retail customer experience for a “touchless” post-COVID world. And there’s little doubt your Retail leads are already pretty busy right now doing just that.

Risk Management for “touchless” retail

But the real question is, what can the Risk, Fraud & Financial Crime teams do to help their Retail partners – and customers – achieve this “touchless” retail reality?

The answer lies in first revisiting your pre-COVID retail workflow – and, particularly, your new customer onboarding and customer service authentication procedures – from the vantage point of your new post-COVID perspective:

• How often do they require close contact between the retail rep and the customer?
• How often do they involve a shared tablet, mobile device, keypad, kiosk, or pen between retail reps or customers?

Once you’ve identified the risk-related processes that are hurdles to a touchless retail experience, borrow some lessons from the digital transformation we’ve witnessed in e-Commerce during the COVID-19 crisis:

  1. Consider a shifting to a mobile- or digital-first authentication experience. Integration of technology that allows a rep or your systems to trigger a link to a digital authentication workflow to a customer’s mobile device or email from your retail point of sale (POS) system has several advantages.

    It can be executed in both a pre-shopping or real-time shopping workflow, and puts the process directly in the customer’s hands, eliminating the risk of revealing sensitive personal information to retail reps, the need to pass potentially contaminated identity documents between individuals and the need for customers to touch shared screens, PIN pads and signature devices. Customers can scan their own identification documents and the process of authenticating them can be automated, leaving less to retail rep judgment and creating valuable workforce efficiencies.

    Finally, there are likely to be few situations in which a customer cannot access the link via a text or email. Morgan Stanley6 reports that 9 out of 10 consumers have their mobile phone within arm’s reach 24/7, while Retail Me Not7 reports that about 7 out of 10 are already using it while shopping to compare products, research ratings and reviews, or search for a deal.
  1. While you’re at it, make a move to mobile- or digital-first application, payment and on-boarding processes. Again, triggering a link to a customer’s device or email that drops them into a digital application, payment and onboarding workflow not only eliminates a lot of risk associated with sharing sensitive personal information with retail employees, but also eradicates the need to touch screens that are used by tens (if not hundreds) of other employees and customers.

    In addition, once a customer has been properly authenticated and they prove to be low-risk, verified data associated with the customer can be used to pre-populate the customer’s application, eliminating hundreds of keystrokes and creating a more frictionless experience for good, trusted customers. This digital-first experience can then be integrated from your website to your POS systems to deliver the credit decision, payment processing outcome, and any signed on-boarding documents back to retail employees to close out the process. Again, this type of workflow can support a pre-shopping or real-time shopping experience.
  1. Implement digital identity intelligence into both of the above for extra fraud and financial crime protections. Another key advantage of shifting retail authentication, application, payment and on-boarding processes to digital or mobile is the ability to use the unique data exhaust created by devices to further secure the transaction.

    Digital identity intelligence technologies are typically passive in nature, meaning that the customer generally feels zero added friction in the process, even though the intelligence may be leveraged throughout multiple points of the customer journey (i.e. authentication, application, payment, etc.). They also bringing valuable data to the table that can be used to automate and orchestrate a risk-appropriate workflow that allows good, trusted customers to sail through the process unabated, while injecting more friction for suspected fraudsters associated with higher-risk transactions by way of step-up authentication solutions.

    Again, shifting to digital-driven step-up authentication further eliminates the need to expose large amounts of personally identifiable information to retail reps as well, snuffing out social engineering attempts by fraudsters and creating a more secure transaction for consumers.

    In addition, risk workflows can also leverage location intelligence gathered by digital identity intelligence solutions to assess financial crime compliance risk without creating undue friction for customers. For example, location intelligence gathered by digital identity solutions can be used to examine the increasing sanctions risk by a transaction and automate any follow-on investigation that may need to ensue.
  • Make sure your digital identity solution is powered by comprehensive shared intelligence. While many digital identity solutions exist, they are not all created equally. Look for one powered by a global data consortium of shared intelligence of a scale that will allow you to leverage the vast behavior other merchants and online entities have observed about the identity across hundreds – if not thousands – of faceless transactions across the ecosystem. The LexisNexis® ThreatMetrix® solution is one example of a digital identity consortium of this size and scale.

    Some key areas to research that will help you sort the wheat from the chaff when it comes to digital identity solutions:
  • Size and scale of the digital identity consortium
    o How many companies participate in the consortium?
    o How many transactions does the consortium see monthly?
    o From across what industries and countries?
    o What specific data elements are collected?
  • Identity linking technology and methodology
    o Is the data organized around a single device profile? Or a more holistic digital identity represented by many devices?
    o What methodology is used to link the data associated with devices or digital identities?
    o What is the network’s digital identity recognition rate?
  • Location intelligence
    o What location signals are collected by the consortium?
    o Can it pierce proxy to identify true location of a transaction?
    o What artificial intelligence, machine learning or other analytics can be used to triangulate them and spot anomalies?
  • Privacy by design
    o What information must you contribute to the consortium?
    o How is it secured, protected and stored?
    o If the data is anonymized or tokenized, what is the process?
    o Is the solution compliant with GDPR, CCPA and other applicable privacy law?
  • Performance, availability, flexibility and scalability
    o How easily does the solution integrate into your website and existing systems?
    o Does it have a policy engine that can be easily configured to score risk based on your company’s risk appetite?
    o Does it allow for integration of other authentication solutions to automate complex workflows based on risk?
    o Can it easily integrate other data and solutions into policy and automated workflows?
    o Can it scale reliably while injecting minimum latency into the customer experience?
    o What is its track record of performance and availability?

The Bottom Line: Digital-first risk management can help deliver touchless retail experience, while also preventing more fraud

The Risk Management team has a big role to play in helping Retail deliver the touchless retail experience that is likely to become our new normal for some time. If you think about it, legacy Risk processes represent the majority of retail interactions that create social distancing and sanitation concerns in a post-COVID world.

The good news is that by getting hands-on with Retail to create a new touchless workflow that leverages the very technology consumers turned to in the midst of the COVID-19 crisis to create more touchless interactions between reps and customers in retail, Risk can not only be a key driver of the evolution, but also create more value for the business through additional fraud prevention, substantial workforce efficiencies, and improved customer experience.

1 CommerceHub:
2 First Insight:
3 McKinsey:
4 BCG:
5 Shekel:
6 Morgan Stanley:
7 Retail Me Not: