With shops opening and closing in an unpredictable pattern driven by local lockdowns and tier changes, retailers have had to become highly adaptable. While closed shops force shoppers online, when doors are open many of those same shoppers are wanting to tap into physical retail – only they want to do it in a tech-driven way.
This has made omni-channel more critical to retail success than ever – but it isn’t just having the ability to switch from store to online as tiers change, rather it is the ability to offer the combination of the two to give shoppers choice of how they shop, as well as how they use technology while in stores.
This is being played out by many retailers already, with both Aldi and Dixons Carphone both showing different ends of the spectrum of this increasing importance of omni-channel to the new world of retail.
Dixons Carphone has, like many non-essential retailers, been faced with a rollercoaster of stores being open and shut nationally during two lockdowns, as well as having to accommodate region closures under the tier system.
This has wiped some £150m off its predicted profits for the year, however it did turn a profit – £89m – and has seen omni-channel sales rise by 145% across the second half of the year as it has adapted rapidly to making stores and online work better together, while being able to switch emphasis rapidly and effectively between channels as closures roll around.
Aldi’s approach has been to look at adding more click and collect and tapping into the needs for rapid, low value order delivery, opening up its click and collect trial to roughly 20% of its store footprint and increasing the number of stores that can offer delivery through its partnership with Deliveroo to 130 more stores.
Aldi’s approach is very much to learn from what competitor grocery retailers have seen work and not work across the pandemic and tweak it to suits its shopper demographic. Picking click and collect has also allowed it to gradually slip into offering online sales alongside its established – and highly successful – discount store model.
The move to omni-channel is entirely consumer driven. Research by VoucherCodes.co.uk indicates that this coming weekend is going to see a shopping bonanza as consumers panic buy ahead of Christmas, with online seeing a £450m boost. Stores, however, are going to get a £1.4bn injection – three times as much as online.
This shows that, for certain purchases and with the right drivers, shoppers do still want to use stores. Even Gen Z and Millennial shoppers, who are increasingly turning their backs on stores and switching to online, are not doing so in totality: two thirds of them still use stores.
Of these people that are still flocking to physical retail, however, many are looking at doing so with a more weather eye on their own safety and Covid-security. And here technology holds the key.
The boom in mobile commerce that we are seeing – and especially in mobile payments – is being driven right now by increasing use of online to shop. However, going forward, it is likely that many consumers will continue to use mobile and mobile payments to pay contactlessly in stores. Again, this reinforces the consumer shift to a much more omni-channel shopping modus operandi.
Tapping into this holds the key to retail success in 2021. Aldi has been lucky: it finds itself able to roll out click and collect and limited delivery just as consumers have become embraced omni-channel. Dixons Carphone, too, has been able to mix and match stores and online to a similar extent.
Rather than having to go totally online as the pandemic has played out, these retailers have been able to maintain much of their existing business model, while looking like they are meeting consumer’s omni-channel demands. More are likely to report similar successes over the Christmas period and omni-channel is set to be a hot topic for 2021.