COVID-19 Pandemic has Accelerated Shift to eCommerce and Digital Marketing
It’s no secret that online shopping has been steadily gaining ground on physical retail over the past ten years. The coronavirus pandemic, however, has catapulted eCommerce’s growth while the highstreet flounders. Although this is hardly surprising, given our newfound obligations to stay home as much as possible, and many stores closing altogether, the full extent of this shift may come as a shock; according to recent figures from the Central Statistics Office, the Irish public doubled their online purchases in the first half of 2020.
That being said, rumours of the highstreet’s demise have been greatly exaggerated. There exists a longstanding theory that the bricks and mortar of physical retail will remain, but must evolve to meet consumer needs. Physical retailers, both large and small, are adopting technology to cater to their now remote digital customer needs. Meanwhile, businesses with an already strong online presence rush to ensure they can support the surge in demand brought about by home-bound customers.
Whether online, in-store, or both, it is clear that technology is the facilitator for the future of shopping; helping retailers offer customers what they want, whichever channel they choose.
What customers want - Changing footfall and technology as a solution.
Trying to force customers to visit a physical store when they would rather shop online simply isn’t going to work. Instead, retailers should utilise technology to make themselves flexible in offering customers the service they want, through the channel they’re most comfortable with. Notwithstanding the huge shift to online shopping in pandemic times, people are still visiting stores; their behavior is just different when they shop. We see consumers shopping with far more purpose, less frequently, and less likely to browse.
We can infer some trends from these observations. Less frequent visits means a customer’s basket size and value is likely to be higher when they do venture out. The desire to avoid crowds has seen a decrease in weekend shopper traffic, but an increase in weekday shopping. Ultimately the emphasis for the customer is, as it always has been, convenience. It falls to the retailers to figure out how to engage with customers wherever they want to shop. Retailer success has always hinged on the whim of the customer, and adopting technology to satisfy consumers is a trend the pandemic has only accelerated.
For example, we've seen increased investment in technologies such as radio frequency identification (RFID) to make serving customers more efficient. With stores closing en masse, it’s more important than ever to be where the customers are, making multichannel retail even more relevant. When people are making a purposeful visit to a store, the last thing they want is to find that the stock they want isn’t available. Knowing where each individual item is allows retailers to get rid of some of the more time-consuming tasks, making inventory control much easier. While there has indeed been an increase in online shopping, in some cases this might simply be customer research for a more mission-led journey as online searches do not always equate to online purchases. In many cases people are checking their local stores have the products they want before venturing out to make a purchase.
Technology offers ways for retailers to keep stores relevant in these uncertain and increasingly digital times, whether that’s through click-and-collect services, or by serving as a localised warehouse. Sarah Curran Usher, managing director of data-driven personalisation platform True Fit, who in 2018 was part of a Retail Executives Advisory Network aimed at highstreet transformation, says:
“I’ve always believed in the purpose of the high street, and the in-store experience is still super important for the customer and the brands.”
So online presence is becoming more important, even if just to keep the store relevant, but having this narrow view of stock can have complexity on the back end for retailers. Digital applications can make this process easier and more convenient for staff.
Stay safe, control the virus.
While people slowly regain confidence in physical shopping, much of the technology introduced to encourage people back into physical locations involves making them feel safe.
Many restaurants have begun introducing digital menus to save customers from having to touch a traditional menu which other customers have handled. Restaurant chain The Breakfast Club, for example, is now using QR codes on its tables which automatically direct customers to its menu online. And, in an effort to reduce packaging, both for environmental reasons and to reduce the number of surfaces coronavirus can spread on, cosmetics retailer Lush has introduced an app called Lush Lens, which allows customers to scan products with their phone for further details, without the need to pick them up to read the packaging.
Technology is being used to help in-store shoppers find the right clothing fit while changing rooms are closed, something clothing brand Moosejaw is already doing in the US. Store personnel armed with tablets can scan a garment’s QR code and, by asking the customer a few questions about their body shape, can determine which size will be the best fit for them. Significantly, this not only meets customers’ increasing demand for a personalised, in-store experience, which we already touched on, but it also helps with the additional logistical and operational issues around a customer trying on a garment in the covid-era, and what has to happen to that item once it has been tried on.
Technology and the shift to digital has played a huge role in how retailers have maintained business as usual where possible, in the face of a situation which is far from ideal for anyone. We need to try, as businesses, to find a way we can still run our shops and keep staff employed. Now is the time to broaden the way we think about technology, and how we can apply it to achieve these goals.
With two-metre distancing in place, monitoring the number of people in stores has become a priority. M&S has been using a virtual book-and-shop technology called Spark, which allows customers to book appointments for store visits, preventing too many people being in a store at any one time. It certainly isn’t the only retailer to adopt new technologies for this purpose. Some retailers are using traffic light admission systems to count customers in and out of stores, effectively achieving the same result. Emphasis on contactless payments and self-scan capabilities on phones with retailers has also increased, with many retailers requesting customers avoid paying with cash altogether where possible.
Sainsbury’s are rolling all of these features into one with their SmartShop app. Introduced last year as a scan-as-you-shop offering, it has now added features such as a traffic light system based on store footfall. Further afield, some stores in Singapore, such as Frasers Property, are even using UV robots to disinfect stores and items. From these examples, we see little in the way of incentivizing customers to return to stores (their return appears to be a given, in some form or another), so much as keeping them safe when they are there. Tech and the shift to digital has played a huge role in how retailers have maintained business as usual where possible, primarily by increasing safety precautions in line with government guidance.
Adapting to survive.
Stores have also taken on another role during the pandemic – as smaller, more local fulfilment centres. They very rapidly set up local distribution services, so that they can make promises such as; “Order by midday, and we will courier these products to you by 5pm tonight if you live within a certain distance.” These are not sophisticated businesses; essentially they’ve set up a same-day delivery service rapidly, out of sheer necessity. Depending on the size of the business, this could be done through something as simple as informing their customers of their new services via a Facebook page, or other social media account, while they establish a more sophisticated website and automated service.
The coronavirus pandemic has forced a make-or-break situation for many retailers, the harsh bottom line; adapt or die. While there had already been a shift in the relevance of physical stores towards experiential spaces, with customers demanding increased personalisation and flexible purchasing options, lockdown has massively accelerated both of these changes, and with them, the urgent need for technology adoption to stay afloat.
These are unprecedented times for society, and consequently for retail too. The direction the retail sector takes will be determined, in part, by how the pandemic develops, customer behaviours, and its own adaptability.
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