Some of us are aware that the US Retail industry had been going through a huge upheaval even before the Covid-19 pandemic set in.
In fact, As early as 2015, we saw this in the case of Radio Shack which had to close down business, even as consumers moved to a Digital-first economy (The good news is Radioshack is back).
Cut to 2021, some major retailers that have closed (either reduced number of stores or filed for Chapter-11) are below:
Now, one of the major reasons some large Retailers fell on the way was their sluggishness to adapt to the Digital world, even as their consumers were clearly changing and their purchase cycles were not linear anymore.
Take a look at this information –
So, what do Retailers do to survive and even thrive in the new normal?
We present some important priorities for Retailers if they wish to ace the game in the new world.
1.Digital Shopping is no longer just nice-to-have
E-Commerce and Digital shopping are here to stay.
Worldwide ecommerce sales (Image source: Shopify)
As studies show us, even if the world were to return to a truly pandemic-free world, online purchases are expected to grow and grow significantly. Last year alone, close to 10% of shoppers world-wide did their first-ever online purchase and that number is expected to increase in the next few years. Over 70% of customers globally will continue shopping online and not revert to in-store shopping. Clearly, the trend is here to stay.
f you are in the online retail business, it is particularly important for you to greatly enhance your omni-channel experience and fix any gaps in the process ASAP. The difference between you and your competition may not be quality or price, but that of the customer experience. Your customers expect you to provide them with a superlative experience regardless of where they are (in their purchase process / thought process). Just as customers would have expected the same store experience across any of your branches (during pre-pandemic times), today, whether they are shopping on your Website, Mobile app, Instagram, Tik Tok or Twitter, they want to have a consistent, unbroken experience. In fact, customers today typically start their Digital shopping trip at one touchpoint and complete the purchase over another and still expect you to provide them with a seamless experience.
So, ensure you get this part right. Brands that present fragmented journeys will be left behind.
2. The world of value-based selling
In an interesting turn of events, thanks largely to Covid-19, consumers are increasingly placing emphasis on value offered rather than the Brand itself.
Just to be clear, large brands still have their loyal customers. However, there is an entire world of consumers out there that believe in other attributes more than just the brand name itself – this could be in the form of better pricing, easier pick-up options, lower shipping costs, smarter bundled combos, and anything else that makes their lives easier. What this means for retailers is while brand value is a critical parameter, it may not just be enough to retain customers. If a smaller, unheard-of brand would offer more value, customers do not mind switching over. In a paper published by MIT, more than 50% of respondents had tried out a new brand last year and those new brands accounted for more than 30% of their shopping carts while checking out.
So, whether you are an established brand, or just starting out, know that value for your consumers trumps everything else. And by value, we do not necessarily mean dollar-savings only. These value drivers need to be aligned to your customers' purchase behaviours.
3. Home is where…the dollar is.
While work-from-home was an option exercised by few companies’ pre-pandemic, now it is the norm. Global organizations such as Spotify, Google, Amazon, Twitter, Salesforce and many others have completely changed their work policies, with some of them enabling a permanent work-from-home option while some others allow co-sharing offices as needed, on a fully reimbursable basis.
What work-from-home has done is to bring the homebody economy to the mainstream. People are looking to lead their lives to the fullest without leaving the safety of their homes. Whether it is a surge in DIY videos on Youtube or increased purchase of lifestyle/fitness aids, it is evident that customers are looking to resume their pre-pandemic lives, but within the confines of their homes.
Customers do not mind spending upwards on what they perceive as valuable to their lives. Almost 28% of consumers have invested in completely new uses of living spaces in their homes.
If retailers can tap into these new consumer spend patterns, they can create significant revenue streams, and this is not restricted to household purchases alone. For instance, an insurer can tie-up with a health-care provider and offer free Covid-specific breathing exercise sessions for their customers, with a small complimentary kit (maybe a mask or a sanitizer or so on). While this builds trust on one hand, it also gives an opportunity to cross-sell/up-sell to these customers.
Hence, brands can do better if they cater to the homebody economy, but not just that, also offer them innovative solutions, going beyond traditional offerings.