Consumers in 2020 spent USD 861.12 Bn in online shopping, 44% higher than in 2019 at USD 598.02 Bn. During the pandemic, retail institutions, namely Chuck E. Cheese, Brooks Brothers, and JC Penney, filed for bankruptcy because they were late at the online game.
In the 2020s, the bulk of the world’s middle classes are forecast to move from North America and Europe to the Asia Pacific and other emerging markets, presenting retailers with new business opportunities and challenges.
The rising real-estate costs prompted the need to think differently. We started to consider new tactics like store-in-a-store, pop-ups, and smaller and accessible customer outlets or adaptive rental rates based on footfalls instead of costly networks of huge stores.
Changing Dynamics of Retail
However, the COVID-19 hit underlined more challenges. New digital business models disrupted the industry with big e-commerce players and innovative startups using personalization, auto-replenishment, monthly subscriptions, value chain extensions, additional service offerings, and much more.
FMCG companies and consumer goods manufacturers are moving towards retail, with some of them exploring direct-to-consumer models, blurring the lines between retailers and manufacturers. Online sales rose by 46% since the pandemic that includes first-time shoppers from the older generations.
Traditional retail players like Bed, Bath & Beyond, and Gap to Wayfair rely on online sales to weather out their pandemic-induced store closures. In a reverse trend, digital-native brands are increasingly operating brick-and-mortar stores, further disrupting the traditional retail landscape and validating physical retail stores’ relevance.
Technology-led Post COVID-19 Retail Trends
We already see investment in technologies that deliver omnichannel retail experiences. Retailers are using AI and ML solutions to augment supply chain challenges. Let us look at a few retail trends we will see.
Keeping customers engaged and informed
Marketing during a crisis is crucial. Companies that did not cut back on their spending came out with higher sales numbers. Retails must keep customers interested even during and after the crisis. Companies will increasingly use remote interactions to talk to consumers staying at home.
When Nike made its premium Nike Training Club app available for free, its online sales in China rose by 30% during the lockdown as more people worked out at home and bought their products on Nike’s e-commerce store connected to the app. These customer-focused interactions will persist beyond the pandemic.
Encouraging self-service solutions
Startups are working on self-service solutions powered by AI, facial recognition, and infrared technologies to improve customers’ online and in-store experiences. Customer service till use chatbots to reduce support and service calls.
Big retail players are experimenting with contactless payments, robots, smart tablets, and digital kiosks in their physical stores. This trend will continue beyond the crisis, giving customers control over their shopping, whether offline or online.
Technologies will fulfill customers’ self-service behavior with better product search tools, making shopping intuitive and helping customers find and buy items faster.
22% of consumers worldwide used digital wallets to buy at least one product in a physical store during the COVID-19 pandemic. Contactless and mobile payment systems will reduce or replace cash handling or touching of POS terminal keypads in stores.
Amazon Go is a case-in-point for technology-powered stores that is low-touch. Low-touch can be a haven for shoppers and a retail outlet model that can support the customer journey.
Fulfilling orders and improving browsing experiences
The crisis has brought innovative fulfilling methods to the limelight, and omnichannel approaches like buy-online pick-up in-store (BOPIS) popular. As per Adobe Analytics, the BOPIS approach grew by 208% from April 1st to 20th of 2020. The popularity is such that 56% intend to continue BOPIS post-pandemic.
Additionally, retailers will use intelligent recommendations to fulfill unplanned and spontaneous purchases from in-store traffic. Further, websites and apps are improving out-of-stock experiences by suggesting similar products to unavailable items to customers.
Offering inventory visibility
As people become more thoughtful and deliberate about their purchases online, there is another shift in customer behavior. Meal planning, price comparisons, and reading product reviews impact customer loyalty as shoppers consider product availability during buying decisions.
Retailers will give customers complete visibility into their products – including their location and availability, significantly impacting their experience. Athletic wear retailer Lululemon used radio-frequency identification (RFID) technology to know the real-time status of their stocks, helping them fulfill online orders from their physical stores.
Reaching customers through omnichannel solutions
COVID-19 encouraged the acceleration of omnichannel retail, making meeting, engaging, and delighting customers easier. Bed, Bath & Beyond recently invested USD 250 million into omnichannel, while Levi’s introduced 3D for sampling and design, eliminating the need for physical samples to sell to merchants.
Providing shopper safety
Smart building technology can help keep shoppers safe. Heatmaps, smart HVAC, and IoT sensors throughout the stores can ensure air quality is good enough for shoppers to stay and continue shopping or not.
Retailers can keep their websites and social media apps updated about store safety with the latest health details. Shoppers can learn when the store is closed for maintenance purposes.
Learning and predicting customer behavior
Computer vision and edge computing will help retailers learn how people are shopping and reacting to offers on store shelves. Data science can predict customer demands so that retailers can stock with only necessary inventory, leaving only little unsold inventory and enjoy better margins. Manufacturers can use the data to stock up both in their stores and also at retail outlets.
To conclude, many players are reimagining the new retail landscape, and unprecedented changes are bound to happen. Nothing is certain even in a post-COVID world. Yet, retailers must have an agile and innovative mindset and a robust technology foundation to prepare for what’s to come.
Recent developments show that early adopters of technology and omnichannel solutions that facilitate physical and online shopping seem to be one step ahead and poised for post-pandemic success.
With, Draup both retailers and manufacturers can prepare for further disruption.
Draup for Sales, an AI-driven sales intelligence platform, empowers sales teams with comprehensive account and stakeholder intelligence, enabling microtargeting.
With the retail sector seeing rapid disruption, sales teams are racing to obtain real-time and 360-degree knowledge about prospects, digital efforts, technology investments, outsourced alliances, and the ecosystem. The platform’s dual taxonomy-driven technique provides hyper-contextualized insights, aiding faster and better deal closure.