Predictions for the New World of Retail
2020 Holiday Shopping and Beyond
As the end of the disastrous year that was 2020 draws near, retailers and consumers alike ponder what Christmas in this new and strange world will look like. The one thing that’s for certain is that nothing is; this year has taught us to expect the unexpected and be prepared for anything.
We’ve seen a fundamental shift in consumer behaviour, forcing the fast track of digital transformation for many retailers. Foot traffic declined as Australians embraced ecommerce; the ABS reporting that online sales contributed 10.6% to total retail turnover in September, slightly down on the high of 11.1% in April but up from 7.1% in March 2020.
Stock shortages, strained supply chains and postal delays have made a profound and permanent impact on us. Will our view of this new world change consumer behaviour this holiday shopping period? Here are our top predictions and some tips on what retailers can be doing now to ensure their success.
Ecommerce will continue to grow as consumers look to avoid shopping centres, or limit their time instore.
Click & Collect will see a dramatic increase as shoppers plan to consolidate their trips; they want to get in and out of stores as quickly as possible. Google reports that 55% of consumers are already planning using Click & Collect functionality for their holiday shopping. Salesforce predicts that up to 30% of global retail sales will be made through digital channels this holiday season, and that sites offering store pickup (Click & Collect, concierge service, curbside, drive-through) will see a 90% increase in digital sales over the previous holiday season. Accenture reports that BOPIS is up 195% globally since the pandemic, as retail stores transform into local fulfilment centres.
Tips for Retailers
Omnichannel is core to retail survival. Retailers need to embrace Click & Collect, publishing live inventory availability (and ensure it is 100% correct!). A Distributed Order Management System will give you a consolidated view of your ATS inventory, give your customers up to date inventory availability for their local store and prevent oversells.
Foot traffic will be dramatically reduced compared to previous years, but stores can still play an essential part as fulfillment centres. Empowering ship from store functionality can mitigate the risk of shipping from a single warehouse, where staff numbers are limited. Shipping from the closest location to the customer will also decrease the shipping time and make for a better customer experience. A DOM System can help you automate processes and give staff the tools they need to become truly omnichannel.
Consumers will shop earlier in the season.
Concerns about stock shortages and slow delivery times, coupled with the perpetual search for a bargain, will see consumers embrace the Singles Day / Black Friday / Cyber Monday sales period more than ever. Australia’s 2019 Black Friday and Cyber Monday sales events grew 31.6% YoY – a growth that is expected to be absolutely smashed in 2020.
We eagerly await the results of this sales event; local retailers certainly aren’t shying away from the event and are promoting sales more aggressively than ever. Our good friends at Catch are anticipating big things… CMO Ryan Gracie commented that “we are offering four times as many deals this year compared to previous years. We’ve certainly upped our game because our buyers know it’s a huge opportunity to get their goods in front of an audience.”
Tips for Retailers
- Mitigate the risk and strain of shipping from one location by connecting not only your stores but also suppliers and dropshippers. Shipping directly from the inventory source will reduce shipping times and negate double handling of inventory.
- Ensure your products are in front of the widest possible audience by connecting sales channels and marketplaces to your ecommerce ecosystem. Having your product in the right place at the right time will give it the best possible chance to convert. Euromoniter reports that 56% of global retailers are seeking to sell through additional digital channels, such as through more marketplaces, and almost half are looking to accelerate their overall investment in omnichannel.
Check out how General Pants were able to switch on additional sales channels when their retail stores were forced to close for an unknown period of time – read the case study here.
Retailers will embrace new ways to engage with their customers.
The days of casually perusing stores and interacting with retail staff are long gone. In the past few months, we’ve seen enterprising brands mixing up their social strategy to engage with their customers in a whole new way. Consumers are hyper-engaged with social media right now and leading brands are looking to inject value into their customers lives, rather than simply sell product.
Lululemon is offering a variety of free yoga, workout, and meditation classes through its online community #thesweatlife to promote self-care and help reduce anxiety during the coronavirus outbreak.
IKEA Israel has created a downloadable PDF version of a mock ‘Stay Home Catalogue’, cleverly integrating their product and inviting people seeking a creative outlet while stuck at home.
Engaging with customers in real time is a marketers top priority and also their top challenge. Fewer than half (49%) of marketing leaders believe they provide an experience completely aligned with customer expectations, as they continue to struggle to adapt to customers’ rising expectations for a new level of engagement.
Tips for Retailers
- Build trusted relationships with your customers and gain new ones by offering value through your social and communication channels. Retailers that build trust now will be rewarded with loyalty into the future.
- Analyze the data. Customer insights have never been more valuable; analyze customer behavior and buying habits on a daily basis to and adapt your strategy accordingly. What new unmet needs have emerged? What new pain points have surfaced? What new markets are emerging for your company? It all comes down to the data.
- Be creative! Run online competitions, host virtual meetups or parties, encourage user generated content and reward loyal, engaged customers accordingly.
2020 has been a challenging year for retailers globally. We’ve seen a fundamental shift in consumer behaviour, forcing the fast track of digital transformation for many retailers. The ones that are thriving have embraced omnichannel retailing and shifted their behaviour and practices to suit the new environment they find themselves operating in. The new world of retail is here to stay and there is opportunity for retailers to embrace change, survive and thrive.
