The challenges presented by the coronavirus COVID-19 pandemic are unprecedented, there is no denying it is a period of turmoil for almost every business, including the retail industry. From disruptions to deliveries to store closures, the threat to retail can’t be ignored. Yet although this may paint a relatively bleak picture for the future of retail, there are things retailers may be able to take away from the situation that potentially could create opportunities once normal trading is restored.
How are some retailers building customer confidence?
The chaos leading up to lockdown in the UK meant the retail industry had to prepare for the future quicker than they may have anticipated. Customers were disrupted and anxious, so retailers who could make the retail experience as convenient as possible secured a competitive advantage that consumers will remember. Retailers who adapted by creating or expanding services to put their customers’ needs at the heart of their operations were praised, such as Sainsbury’s and Iceland prioritising vulnerable customers and John Lewis donating £1 million to a community support fund.
Real time information is more important than ever. Retailers can analyse what has gone well and what hasn’t and if they are still allowed to operate, they can optimise their supply chains and adjust them for changes in customer habits and short-term disruption. Some retailers have needed to adapt to a huge upsurge in demand, such as those who sell essentials whereas others, especially following store closures, will experience a dip that may encourage them to rethink their business model and the way they use data to drive forward into the future.
Retailers may not have much choice in many aspects of their current operations, but those who have been able to act quickly may have mitigated some of the impact and will have learnt valuable lessons from these challenges.
Contactless is key
The threat of COVID-19 really changed the perception of cash and even traditional debit cards, and more people made the switch to contactless cards and applications such as Apple Pay. Retailers that provided these alternative options saw more consumer confidence as the transmission of the virus has been expected to happen through the exchange of cash and touching surfaces such as a card machine. This will likely influence how people pay in store over a longer period of time, introducing these methods to those who didn’t see the appeal previously.
Is e-commerce the endgame?
As expected, e-commerce is seeing an upsurge in line with social distancing measures. Yet it’s not a simple solution; even Amazon has suffered shortages, highlighting effective supply chain management is more important than ever.
Convenience, as always, is especially valued by customers at the moment. The US retailer Target has highlighted that brick-and-mortar is still valuable even in these difficult times. Their “Drive Up” app is extremely convenient as items are brought out directly to customers’ cars, showing how retail innovations can shine even in challenging times.
Having an omnichannel presence, however, is more important than ever. The demand has really skyrocketed following recent events, with Sainsbury’s expanding its click and collect service and Morrisons expanding its home delivery service. Those with online delivery services and click and collect are running at full capacity and some business are changing their business models to benefit. Restaurants started delivery services and Salford-based brewery and distillery; Seven Brothers even set up a drive-thru for beer and gin in the midst of the pandemic.
This highlights how despite the situation being less than ideal for most retailers, those who were able to adapt to a more flexible business model might decide to continue these omnichannel ways of operating once restrictions are reduced.
Time to think outside of the box?
The time to be experimental and take risks to innovate is now. The retail industry needs to think outside of the box to reach their customers. Many customers are spending more time on social media so they will be inclined to purchase from retailers who provide direct access to products this way.
Retailers who have made efforts to transform digitally can have an experiential outreach to customers. Virtual showrooms allow a closer replication of an instore experience for customers so they can interact with products and demonstrate how products may look. This allows a higher level of customer trust. Virtual Reality is a useful solution to some of the issues sparked by coronavirus and it really is its time to shine for innovative customer engagement.
It is also a time where the retail industry has to put the needs of the community and the welfare of its workforce front and centre. Genuine acts of kindness, support and collaboration ahead of profit will be remembered.
It is impossible to say what the new normal will look like and there will definitely be long lasting implications, but some of the challenges that the outbreak has brought will push retail further into the future. Retailers who think outside of the box, innovate where they can, and plan ahead will be the strongest survivors.