Cash: Post Covid-19

Relationships and Trust are at the core of human interactions. We will not soon forget the heroic actions of health care workers, first responders, and store clerks working under great personal risk to keep us afloat. Post COVID-19 will likely be a new normal while we mourn the loss of loved ones, and experience a period of store closings, bankruptcies, debt, and lower credit limits. Although almost impossible to forecast changing consumer behaviors, it is likely that relationships and trust will guide trends.

Consumers will expect stores to operate safely and efficiently, and stores will need to adjust to changing consumer behaviors while protecting associates and operating profitably. Stores turning away cash customers, handling cash in a perceived unsafe manner, or inefficiently may be shunned.

For retailers, many stores were not in good financial shape prior to COVID-19. The losses, debt, and unsold inventory brought on by this pandemic will likely result in store closings, bankruptcies, and a further decline in shopping mall attendance. Fewer stores, and possibly more online commerce may be the result. However, we can expect debt and credit limits for retailers and consumers to tighten budgets – which will slow down purchase power. Therefore, cash usage may increase as consumers work to manage credit card debt.

Job losses, debt burden, concerns about safe health practices and uncertainty about a potential COVID-19 resurgence may change shopping behaviors towards e-commerce, and more efficient and perceived safer store experiences.
Two of the nation's biggest banks reported plummeting profits during the first three months of the year as they sought to prepare for an onslaught of defaults in debt that ranged from credit cards and mortgages to business loans during a recessionary 2020.

The recovery will be hard fought and linger. Unemployed workers may find businesses and stores they worked for closed, or jobs replaced by automation. Retail discretionary spending will significantly drop, and AI automation forecasted for 2035 may accelerate replacing employees and eliminating many cashier positions faster than anticipated.

At the onset of the recovery the unbanked community - whose ranks may grow - will continue to rely on cash. And the banked community struggling with credit limits and tight budgets may use cash more often. While consumers haven't necessarily over extended credit usage, job losses slow their ability to service existing debt. It will take time to rebalance credit, and the pendulum may swing away from credit to cash.

Average US credit card debt for households carrying a balance (42%) was $9333 going into the pandemic. During the pandemic and early recovery, the number of households that carry a balance and the average debt may climb as workers struggle to find jobs. Credit and mortgage acceptance will be stricter and harder to find.

A Few Things to Come…

• Expect retailers to launch projects to meet changing consumer behavior. • Expect multiple retail projects to compete for limited funding.

• Use remote sessions to quickly calculate ROI justifications, required KPIs, and project plans. • Provide creative financing options to ease implementations and protect against bankruptcies.

For stores not already engaged in commerce omni-channel retail, a stiff and expensive learning curve may be ahead while they struggle to reopen and operate stores with minimum expense and safely. For brick and mortar stores, a faster return on investment may be to automate customer transactions at the point of payment. Retailer segments that are menu driven including QSR, sandwich shops, coffee shops, movie theaters and others, benefit from Kiosk consumer menus and payment stations. Kiosks free up store labor from order and payment tasks and are more efficient than cashier interactions. Kiosks that include kitchen and delivery options enhance store productivity, hygiene, and customer service efficiency. Kiosks increase average transaction values and, when equipped to accept cash and dispense change back, drive up usage. We can expect consumers to look for innovative kiosk solutions making store experience more efficient and hygienic; and cash recycling at the point of sale does just that.

Grab and Go stores show strong interest but are inefficient for cash customers and expensive to implement. Expect scan and go solutions to develop using contactless payment to pay at the exit with cards or cash. E-commerce is growing and will likely accelerate as a result of COVID-19 but excludes cash customers.

Expect e-commerce cash as an on-line payment option that uses QR to complete the transaction when cash is paid to local retail shops like convenience stores, gas stations, or coffee shops. Opening e-commerce to cash customers enlarges potential e-commerce customers, aligns well with omni-channel retail efforts, and brings needed traffic to local merchants to satisfy cash payments.
Retail and Financial industries will experience a recessionary period while at the same time struggle to meet changing customer expectations. How cash automation companies respond will reshape the industry.