Four Hard Truths for Retail Brands to Consider During Their 2021 Strategic Planning, Post COVID-19
Total online spend during May hit a staggering $82.5 billion, a 77% YoY increase as a result of the COVID-19 pandemic. As Adobe’s Digital Insights Manager Vivek Pandya explains to Forbes it would’ve taken upwards of six years to reach May’s ecommerce heights if growth continued at the same levels from the past few years.
With six years of digital growth crammed into mere months, retail brands have learned some harsh lessons about the nature of their online operations. Encouragingly, many have reacted and adapted well, and are already looking towards next year at the changes they can make in order to meet the increased demand, shifting consumer attitudes and expectations, and environmental concerns of the 2020 ecommerce boom.
1) Bricks and mortar overhaul: Time to re‑think your high street strategy?
It’s no surprise that, during the height of the pandemic lockdown, digital boomed and physical outlets suffered. According to GWI, online grocery shopping across Europe is up 110%, while ‘buy-online and pick up in store’ (BOPIS) purchases skyrocketed by 208% YoY.
With non-essential retail outlets beginning to re-open across the continent, many brands have been re-evaluating the strategic role that bricks and mortar stores play. Microsoft, for example, has all but completely withdrawn its high street presence. Its flagships stores in London, New York, Richmond, and Sydney will remain open, but the rest of its 83 stores will permanently shut their doors.
Interestingly, Microsoft’s flagship stores will remain open as ‘experience centres’, rather than sales drivers, perhaps a precursor of things to come?
Apple, on the other hand, is intensifying its pursuit of creating experiences within its physical stores (while still driving sales), with rumours circulating that customers will soon be able to book one-on-one appointments with specialists at Apple outlets.
Whether it’s through an increased focus on creating experiential spaces, the BOPIS approach, or scheduled pick-up times, it’s vital that retail brands work hard at balancing their in-store and digital experiences, ideally marrying the two to create completely frictionless transactions.
2) Digital transformation has accelerated, but expectations have also changed
For many consumers, lockdown represented their inaugural foray into online shopping. And, while digital commerce has been evolving for years it is mainly catering to serial online shoppers, who with an innate understanding of how browsing, purchasing, and delivery processes work are not impeded by glitches and occasional complexity.
All brands should possess healthy and robust analytics capabilities, but now would be shrewd timing to re-evaluate how you interrogate that data, with first-time internet shoppers also in mind. For example, using mouse tracking to create heatmaps make it easier to understand what is working and what isn’t on key web pages. Determining common drop-off points and abandonment points will be critical to retaining first-time online buyers as well as enhancing the experience for seasoned shoppers.
Ease of use is critical and your commerce platform should be accessible and intuitive to everyone, regardless of their level of experience with online shopping. And, despite physical stores now re-opening, many first-time online shoppers will become digital converts over the coming months. The lockdown has forced many people to shift their shopping habits, and these changes will likely remain permanent.
3) ‘I don’t care how, but I want them’: Customers still expect personal experience
The ability to create an experience that felt personal proved to be a prime indicator of a brand’s ability to roll with the punches throughout lockdown. Consumers, after all, are much more likely to side with a business that took the time to communicate with them on a human, authentic, and personal level.
Moving into 2021, what’s important for retailers to consider is that consumers have two basic needs; they want to be treated like an individual, and they want things to work. What they won’t tolerate is 35-question surveys that dig into their personal lives, or a clunky brand app that provides no discernible extra benefit from its original website.
Brands that can unearth the value in data to deliver personalised experiences, without harassing their customers in the process, will be the ones thriving over the coming years. Artificial intelligence will be one of the most critical tools here. AI can identify patterns, unlock insights that were previously hidden, and help brands use their data to inform the way they present content, deliver experiences, and set prices – or make forecasts for when increased stock is needed.
After all, the surge in demand for many essential goods during the COVID-19 lockdown meant many brands – especially supermarkets and online retailers – couldn’t fulfil orders and were actually losing business as a result. Post-lockdown, retailers will use AI for more accurate demand forecasting, predicting surges in demand and managing stock inventory and fulfilment centres in real time.
4) Ethical policies and sustainability goals are more important than ever
With lockdown forcing many retail brands into survival mode, short-term demands such as cost reduction and cash flow management were, understandably, the immediate priority.
As restrictions are eased, however, retailers must not forget their commitments to sustainability and putting purpose at the heart of their brand and the customer experience. To relent now would be disastrous to consumer trust.
Already, governments across Europe are looking at ways to minimise the environmental impact of the e‑commerce boom. However, responsibility also falls on brands themselves to continue inspiring positive change.
Pre-pandemic, a brand’s ethical policies represented one of its key differentiators. Consumers are now more educated about the supply chain and its environmental effects than ever, and this has seriously influenced their buying habits and behaviour. For example, two-thirds of consumers are willing to dig deeper for sustainable goods, while almost half (47%) would ditch a brand that violated their personal values.
Most importantly, consumers recognise that this has been a tough period for many businesses and that cutting corners, in some areas, was critical for survival. Many are willing to go above and beyond to support their favourite brands, particularly on a local level, if that ensures business survival. What they won’t tolerate is a regression to old ways of thinking and doing, particularly in regards to sustainability and ethics.
This will, hopefully, result in higher levels of collaboration between chains and local businesses, more integration between brands and marketplaces to get products/services in front of new audiences, as well as an increased focus from a more inclusive, diverse, and environmentally-conscious supply chain.
Retail and Commerce in general will never be the same again
For many brands, the surge in online demand exposed serious flaws in their digital infrastructure. Encouragingly, those who had well-established digital operations – or reacted quickly to re-platform, refine, and optimise – were able to mitigate the impact felt during lockdown, and now possess a robust infrastructure that can serve them for years to come.
For those hoping that the return to normal will mean they don’t have to invest in what it takes to be successful online; from an easy-to-use website to a robust commerce platform to quality data-led experiences through AI-driven insights it will be extremely challenging. High street footfall is unlikely to return to pre-covid levels as consumer retain their new found digital shopping habits in ever greater numbers and an effective digital presence will be critical.
To learn more about how Adobe has helped brands create business growth through commerce go the Commerce Cloud customer success stories on Adobe.com.