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GUEST COMMENT Adapting to the new normal

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GUEST COMMENT Adapting to the new normal

Guy Elliott is senior industry lead of retail at digital consultancy Publicis Sapient
Guy Elliott is senior industry lead of retail at digital consultancy Publicis Sapient

The last two months in retail have been some of the most challenging we’ve seen in a generation. Many have pointed to the Spanish Flu and Great Depression as the only real benchmark for our current crisis. But amidst all the challenges, there are some interesting opportunities for retailers to capitalise upon, if they are quick enough to adapt to new consumer behaviours in the ‘New Normal’.

 

Everything has changed

We have witnessed a number of key trends emerge in consumer behaviour, and an acceleration in consumer adoption of digital.

  1. Digital adoption has grown exponentially for some retailers – up to 600% increases in some categories.
  2. People’s attitude to delivery have also shifted: they now appreciate the value of delivery slots for groceries, and online subscriptions, although this will quickly shift back once retailers resolve the issues in fulfilment.
  3. Contactless is now no longer a payment method, but the new interaction paradigm. The idea of touching a touchscreen or keypad now creates a significant hurdle to completing a transaction.
  4. People are now much more likely to buy direct from trusted brands, rather than rely on stores. Many brands have responded to the crisis by creating their own digital business to help them defend market share and to provide some revenue stream (no matter how small) in the absence of physical store sales.

 

The New Normal

We need to recognise that the measures we’ve implemented over the last three months were just quick fixes. As we settle in for the long haul out of lockdown (and possible further waves of infection), we need to look at how we industrialise and operationalise these changes. After all, our current stores and infrastructure were not designed for this.

 

Start with data

As retailers start to create their re-open strategies, each will need to look at its business in light of their expectations of location, traffic and volume and put in place strategies that allow them to accommodate the appropriate shopping behaviour that they need. What proportion of your business is mission-driven with purposeful buyers, versus more experience-based buying journeys? Which stores will have the highest casual footfall? How much of your business can be kept online? Which customers do you need to invest in to reacquire?

 

Use customer propositions and technologies to maximise store efficiency

High volume businesses like grocery, and mainstream apparel will need to find new ways to support customers “popping in” for socks or a top-up shop, with customers who need to browse or make considered purchases. Many retailers were already investigating automation in stores with larger warehousing areas, but this could lead to some stores become micro-fulfilment centres for click and collect. Appointment bookings have been trialled by Apple and Best Buy and have the added benefit of a more personalised, premium experience, maybe combined with a “Try instore, Ship to Home” model, which will work better for high consideration or premium categories. Other omni-channel propositions which may have been on the roadmap will now need to be accelerated quickly to ensure that businesses have a successful peak and Christmas.

 

The instrumentation of stores will lead to zero- contact buying journeys

Ambient intelligent technology already powers some of the high tech experiences of Amazon and Kroger’s, but we will see greater investment it these systems. In some cases, stores are using IR as a blunt instrument to detect if people are running a temperature, but this will quickly shift to self-checkout, Scan&Go style propositions, even in categories that haven’t considered it before due to the risk of shrinkage – the revenue upside may now outweigh the risk. Gesture based interfaces and facial recognition for security (as introduced by the iPhone X) will become a lot more commonplace and may help address some of these concerns.

 

Conclusion

However, retailers adapt to the New Normal, the elements that have made retailers successful over the last 10 years will continue to make them successful over the coming months. Winners will have a strong sense of their brand purpose, and will understand how their brand can support and help consumers with the ever changing and very difficult situation we’re all experiencing. They will win through a deep understanding of their customers missions, and put their needs first – consumers will always reward this with their loyalty and spending. But most importantly, those businesses best equipped to adapt to the New Normal and to innovate in the face of challenge, will win market share very quickly. The Coronavirus outbreak didn’t fundamentally alter retail. It simply accelerated changes there were already coming.

 

Guy Elliott is senior industry lead of retail at digital consultancy Publicis Sapient

 

Main image: Adobe Stock

Author image courtesy of Guy Elliott/Publicis Sapient

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