Retail and coronavirus: Data reveals shifting buying behavior
A study of the impact of the pandemic on retail e-commerce reveals how government support and quarantine orders shaped consumer behavior.
Though COVID-19 continues to incite changes, it’s still hard to imagine what it’ll be like months from now. However, recent developments are highlighting two COVID-19 retail trends that will cause the rise or fall of retailers in the new retail landscape.
First: adjusting to new consumer behavior.
Second: accelerating tech-enabled shopping and omnichannel retail.
According to Barbara Kahn, a marketing professor at Wharton, now is the time to perfect the seamless integration of digital and physical shopping.
Mild optimism on retail’s current state
While the health crisis is far from over, there have been glimpses of good retail news – this includes not only essentials like food and grocery but also fashion and home furnishings.
From Bed, Bath & Beyond and Wayfair to Gap and Kohl’s, retailers have been relying on online sales to weather out store closures and stay-at-home measures. But it’s not just big retailers: Shopify sales and merchant ad spending also jumped during this period.
Since the declaration of a global pandemic, online sales rose by 46% according to Signifyd. The provider of online fraud protection also observed an uptick in first-time online shoppers—especially among older generations. Overall, the shift from in-store to e-commerce sales is speeding up by a year or two.
COVID-19 retail trends: The future of technology in retail is now
Integrated store and online shopping technologies have been helping retailers make sales. In addition to new consumer behavior, this is foreshadowing what’s to come.
Gartner, through Sandeep Unni, a senior director analyst, expects more investments in technologies that deliver omnichannel retail experiences. To augment supply chain challenges, retailers will also look at AI (artificial intelligence) and machine learning solutions.
From here until the new retail landscape becomes clearer, how can retailers be innovative and use the right technology to survive and win post-pandemic?
1. Keeping in touch with customers online
History has shown that marketing or advertising during a crisis is crucial and companies that did not cut back ended up with greater sales. Stay on top mind of your customers and keep them interested.
For instance, Nike made the premium version of its Nike Training Club app available for free. Because it is connected with Nike’s eCommerce store, online sales rose by 30% in China during the lockdown as more people do home workouts.
Find out where your customers are and what makes them tick. Now is an opportune time to interact with them and build online experiences with a lasting impact.
2. Considering innovative self-service solutions
Shoppers are limiting interactions with other human beings. Self-service solutions powered by AI, facial recognition, and infrared technology can make online and in-store experiences better for customers.
To reduce support and service calls, introduce self-service tools on your website like chatbots. In physical stores, consider investing in contactless payments, smart tablets, digital kiosks, even robots.
Even after the crisis, your customers will want more control over their shopping journey, whether online or offline. Technologies that promote self-service behavior such as better product search tools can make shopping more intuitive, helping customers find and buy the items they want—faster and easier.
3. Exploring new ways to fulfill orders
COVID-19 retail trends have made BOPIS (buy-online pick-up in-store) and curbside pickup increasingly popular. According to Adobe Analytics, compared last year, orders placed online and picked up at stores grew by 208% from April 1st to 20th.
As your customers stick to social distancing even after COVID-19, provide them the convenient options of BOPIS and curbside pickup.
One way to make up for unplanned and spontaneous purchases from in-store foot traffic is intelligent recommendations. For instance, you can improve the out-of-stock experience on your website or app, by suggesting visually similar products to unavailable items your customers are interested to buy.
4. Offering 100% visibility into inventory
An EIQ survey found another shift in consumer behavior. People are becoming more thoughtful and deliberate as online pre-shopping activities have increased. Meal planning, price comparing, and reading product reviews. All of these impact loyalty as shoppers consider product availability when deciding which store to buy from.
Giving your customers full visibility into your products—availability and location—has never been more significant. This is especially true for customers who don’t want to linger in stores.
RFID (radio-frequency identification) technology enabled Lululemon to know real-time the status of their stocks. It made things more efficient. Now, they are fulfilling online orders from their physical stores.
5. Preparing for omnichannel retail
The ultimate goal. Meeting, engaging, and delighting customers wherever they are. While it has been on the radar for years, COVID-19 did encourage the acceleration of omnichannel retail. It’s now a must.
For 2020 and beyond, Bed, Bath & Beyond is investing around $250 million in omnichannel operations. Another retailer scaling up digital investments is Levi’s. Not only to engage customers but also to streamline operations. They introduced 3D technology for sampling and design, eliminating the need for physical samples to sell to merchants.
Begin small. Find out how your customers shop. Figure out ways to always be relevant for them. Then introduce tools that unify the whole shopping experience.
Retail moving forward
There seems to be a future of customers less keen on staying long in stores. And more customers opting to shop online, especially as older age groups adapt to digital shopping. According to Statista, 31% of consumers aged 65+ expected to increase spending on goods from online marketplaces because of the pandemic.
But as always, nothing is certain. So, retailers must not only have a robust technology foundation. But also an innovative and agile mindset to prepare for what’s to come.
Reimagining the new retail landscape seems futile right now. However, unprecedented changes are bound to happen. It’s always better to be prepared to ensure the business is ready to run even in the most challenging times.
As recent developments show, early adopters of smart shopping and omnichannel solutions seem to be one step ahead and are poised for success post-pandemic. In this case, technology makes the difference.
