This year has been challenging for the UK’s retail industry. Whilst many retailers have sadly suffered at the hands of COVID-19, we have also seen many rapidly shift to becoming digital-first businesses. As the UK starts to re-open non-essential stores post-lockdown, it’s not all doom and gloom. Over 70% of shoppers are planning to maintain or increase their spend during the upcoming holiday season, and the crisis will prove to be a positive catalyst for change across all dimensions of retail.
In the short term, bricks & mortar retailers – which hadn’t previously invested in e-commerce – have found themselves rapidly embracing the online world in order to survive. The ‘new normal’ will now offer an opportunity for those retailers to evaluate which of those short-term investments and strategic decisions will be needed to put them in good stead for the long term. It is no longer realistic for retailers to avoid having a digital presence in a post-COVID world, and while retail of the future will rely heavily on e-commerce, it will be the use of technologies to create fully blended multi-channel experiences that will take centre stage. Especially for retailers that rely heavily on high-touch services.
Technology speaks louder than words
The luxury sector is a great example of this. As a sector, it has taken an especially hard hit, with sales 70% lower than this time last year due to the absence of wealthy tourist footfall in-store and high-touch selling modes to drive sales. Although there are luxury online fashion retailers which have worked hard to recreate digitally the type of experience luxury customers receive in-store, many traditional brands have not yet got to grips with delivering true online customer experience.
The continuation of social distancing, and consumers’ lack of desire to be in large crowds will solidify the need to digitalise the shopping experience further. For instance, our recent “Road to Recovery” report found that 32% of shoppers anticipate wanting to avoid large crowds all through the second half of this year. This shift in consumer behaviour to wanting online experiences will require an overhaul of the traditional approach from retail. Historically, online presence has acted as a support channel to bricks and mortar – but in this new age, both luxury and high street retail are going to need to turn this mindset on its head. Technology can offer shoppers the opportunity to connect virtual with local, in-store associates via chat or video, or utilise virtual showrooms.
With increasing access to data and the use of advanced A.I., retailers can successfully provide personalised experiences online from home via platforms such as online personalised video consultations. Approaches like this are key to maintaining trust and improving customer satisfaction, reducing return rates, and allowing brands to target consumers with the customer service that they came to expect in a pre-COVID world.
Similarly, social media platforms can offer seamless shopping experiences and engagement right from the palm of the consumer’s hand. Beyond human interaction, AI-powered apps can offer customers easy access to product information on their own devices through QR and barcodes.
Show value, create an experience
Having explored the rise of e-commerce and shift to online behaviour, we still need to remember the importance of the physical retail store and how important it is for technology to protect this asset as well. It does not need to be one or the other – 57% of consumers globally will shop across both channels this holiday season – as the engagement with a brand representative is still critical, albeit socially distanced. Where technology can help more traditional luxury brands, who rely heavily on “in-the-moment” expertise, is with the use of booking systems for advanced appointments – offering the opportunity for retail teams to deliver the same high level of service in-person but in a safer environment.
Additionally, retailers can look to employ online-to-offline (O2O) strategies to help fuel in-store purchases – taking advantage of location services to provide personalised offers and drive footfall, as well as push loyalty programmes towards mobile. Text ads, site links and callouts within Google or Bing ads can provide important information to consumers including which store locations are open or where you can click-and-collect. Retailers can also engage affiliate O2O publishers to help connect the promotional digital experience with in-store purchases with the use of coupons and vouchers, or card-linked cashback offerings. By adopting such solutions, customer data can be utilised across channels to combine both offline and online touchpoints. This this is important when engaging and driving repeat purchase with those who choose to shop in-store.
The benefit of such mobile technology is that it can also be accessed from anywhere. All brands need to rethink which channels are most appropriate for their business, and the channels that can best communicate their value proposition to drive loyalty and sales.
Ultimately, this pandemic will create a permanent and lasting change on retailers, and the pressure is on bricks and mortar stores to counteract the full migration to online spend. Once the dust settles, the look and feel of the in-store experience along with a sophisticated use of technology will become key to survival. Not appreciating how high-touch services can be reimagined in the post-coronavirus era will be detrimental, and it will be those that effectively implement technology to create blended and seamless experiences that thrive in the long term.