The Post Pandemic Future of Retail
Retailers are doing their best to adapt to the changes of a pandemic. However, there is no clear answer as to what will happen in the future. Will we be able to shop at stores? Will people want to go out and buy things if they have very little time left on Earth? What do consumers want?
Consumers still want to touch and see products before making a purchase decision. They also like the idea of getting personalized customer service in person as well as having access to more than just an eCommerce site's offerings. The future of retail might not necessarily have physical storefronts – but it does mean that retailers need to adapt and change with consumer demand or they may find themselves in dire straits sooner rather than later.
Online shopping has changed forever
Over the past few decades, online shopping has grown from a non-existent industry to one worth billion. Buying online has become a common practice for millions of people around the world. Recently, the number of people buying goods and services online has increased more than ever before. Personal care & cosmetics products saw an increase in online orders, especially in countries like Switzerland and Germany.
63 % of shopping occasions begin online. To keep up with the changes, brands need to offer an online + offline shopping experience. This means that regardless of where customers ultimately make the purchase, their customer journey begins online. In most cases, this is on Google or Amazon, where they do their research. This is also why it's critical for brands to have a strong online presence. By improving the customer experience from the very first step, companies have a higher chance of getting customers to buy from their store.
Digitalization for in-store shopping experiences
The pandemic has accelerated existing trends in the shopping behavior of European consumers. This is particularly evident in the shift from offline to online: 50 percent of European city dwellers now shop less in bricks-and-mortar retail than before the onset of the crisis. The clear beneficiary is online retail, which posted double-digit growth in the second quarter of 2020.
But brick-and-mortar retailers can also do a lot to bring customers back into stores and give them a pleasant and, above all, secure shopping experience. Even before the onset of the crisis, European customers valued technology in physical stores. One of the most important innovations to improve the customer experience is automatic checkout, which 34 percent of European consumers approve of. In second place among the popular store, technologies is the sending of personalized offers to the customer's smartphone as soon as they enter the store.
Digital labels will also become increasingly essential. People want to shop as contactless as possible. Businesses are moving towards using QR codes or tags to quickly add items to people’s carts.
Showrooms & smaller retail outlets
For brands, it is now more important than ever to stand out and convince with their digital storytelling: In virtual showrooms, brands can provide the infrastructure for 360-degree images and videos, shop-the-look features, and collection boards where brands can showcase their best sellers, for example. Smaller outlets are also a way to show customers that they can shop safely. These tools set them apart from the competition.
The best price wins – price competition increased
The reason for the financial losses is most likely to be that working hours have been reduced for those affected. This, together with time off, unpaid leave, or even termination, affects 46 % of people for whom the economic situation has deteriorated in the short term. In relation to the population as a whole, only 22 % report shorter working hours, time off, and dismissal.
As many people have less money, they will most likely lookup for the best deal – this results in price competition for many products, and forces brands to act.
Summary
In order to keep up with the rapid changes in retail, brands should focus on the following:
- Offer a great online shopping experience, even if the purchase happens offline
- In-store shopping experiences need to be digitalized in order to need customers' needs for contactless shopping
- Digital showrooms and smaller outlets are preferred over big retail spaces
- Customers will compare pricing online before they buy
Sources:
https://unctad.org/news/covid-19-has-changed-online-shopping-forever-survey-shows
https://www.thinkwithgoogle.com/consumer-insights/consumer-trends/trending-data-shorts/
https://www.pwc.de/en/retail-and-consumer/european-consumer-insights-series-2020-new-normal.html
https://www.vendhq.com/blog/contactless-shopping/
