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Touchless shopping is here to stay — but at what cost?

The new technology could displace workers and imperil women's economic recovery from the pandemic, critics say.
Customer making payment with nfc technology at supermarket
While touchless payments may continue to make shopping easier and safer, retail workers fear their already precarious jobs are at risk. Luis Alvarez / Getty Images

Touchless shopping is here to stay, as consumers still skittish over the coronavirus look to buy items with as little contact as possible — but labor groups argue that technology’s rapid rise over the last year could displace workers, especially women.

As retailers prepare to reopen their doors to shoppers, stores from Aldi to Foot Locker to 7-Eleven are adding self-checkout stands and tap-and-go smartphone payments, bolstering the contactless systems they put in place when the pandemic began.

The convenience store chain 7-Eleven rolled out mobile checkout last summer and an in-app wallet later in the year. The airport store chain Hudson announced its second location using Amazon’s “just walk out” technology, at Chicago Midway International Airport, so shoppers can walk in with a credit card, grab an item and leave.

“Even before Covid, we were on a path to updating and being more progressive with digital payments and, really, customer convenience,” Frank Bracken, CEO of North America Foot Locker, which recently expanded its mobile payments at its stores, told NBC News. “Consumer behavior has been migrating toward less cash. … Covid gave us a pause but also motivation to roll out the technology.”

Foot Locker said its expanded payment options through FreedomPay allow shoppers to use Venmo or PayPal to buy items instead of handing over cash or swiping a credit card.

Nike, which offers shopping via app and as well as a buy online, pick-up-in-store (BOPIS) option, said it sees contactless shopping as a way to help shoppers discover new items in the app and check out quickly at a store.

But what digital checkout also brings is more data collection on customers.

“When you walk in to one of our [stores] we know you — your sport preferences, your purchase history, your sizing,” Nike told NBC News in an email. “We use signals from our activity apps to help design programming and product assortments across our fleet to match the sports we know they obsess.”

The company saw shopping on its app grow by about 200 percent in the first quarter last year and its BOPIS soar by 800 percent during that same time, the company told investors last year.

"Covid gave us a pause, but also motivation to roll out the technology."

For digital payment companies, the pandemic has also been a boon for business. PayPal, which owns Venmo, said nearly 1 million merchants are now accepting QR payment codes in stores, adding to $6.4 billion in sales in the first quarter of this year. Square’s contactless technology used to account for about one-third of gross payment volume, but it surged to “well over” 50 percent in April 2020, the company told investors last year.

As the country laps a full year into the pandemic, contactless payments appear here to stay, said David Marcotte, senior vice president of market insights with Kantar Retail. Reach3, a consumer insight company, found 38 percent of Americans said they are likely to continue to use touchless payments when shopping. But the challenge for retailers will be how to continue turning a profit from expensive contactless delivery and technology upgrades, Marcotte said.

“Technology is good if it makes my job easier — but if it takes my job away, what good is it?”

“This year the pressure is going to come down,” he said. “You can’t just do home delivery without a serious financial analysis: Can I make money on this or is this a strategic competitive move? It's not automatic.”

While touchless payments may continue to make shopping easier and safer, retail workers fear their already precarious jobs are at risk.

“At a time when millions of Americans are already struggling, when most Americans are one paycheck away from disaster, what does it say that some of our nation's largest retailers are using automation to eliminate the jobs real people need?” said Marc Perrone, president of the United Food and Commercial Workers International Union, which represents 1.3 million workers in various industries, including retail.

"This pandemic has made clear that our country’s retail and grocery workers are essential as we have looked to our neighborhood stores to protect access to the food and critical supplies we need during this crisis,” he said in an email.

In the next 10 years, about 17 million workers in the U.S. are going to need to change their occupations or change jobs within an occupation, according to a February report from the McKinsey Global Institute.

Moreover, about 80 percent of those jobs fall into categories dominated by women, including administrative support, customer service, sales and food service. Already, the pandemic has had a disproportionate impact on women, with more than 2 million falling out of the labor force since the pandemic hit. If the labor force were to grow at the same rate as the latest jobs report shows, it would take at least 28 months just to get back to pre-pandemic levels.

The growing tension between drastic innovations in retail along with a global pandemic has thrown the issue of automation front and center between workers and retail companies. Recently, Macy’s workers, who earn commission on sales, won a case against the department store for violating its bargaining agreement by not crediting employees for sales made through its app.

Still, employees like Joe Jarmie, who has worked at Stop and Shop in Madison, Connecticut, for 35 years, see the writing on the wall. The store recently underwent renovations that included five new self-checkout stands and a robot named Marty that scans floors for spills and dropped items.

“Technology is good if it makes my job easier — but if it takes my job away, what good is it?” he said.

Stop and Shop said its investments in technology are aimed at improving customer convenience while also improving efficiency among its workers. Marty's functionality enables associates who previously walked through aisles for messes to focus on other tasks like helping customers or replenishing shelves, Maura O'Brien, a spokesperson for Stop and Shop, said in an email.

"As we have in the past, we’ll continue to use technology to enable our associates to serve our customers and communities even more effectively — and free up our associates from certain work to allow them more time to focus on customer-related activities," she said.

“The supermarket business is changing," Jarmie said. "It's a sign of the times.”