Many retailers are suffering from whiplash. Many parts of our industry saw a digital acceleration of five years to 10 years in a matter of months. Digital retail sales grew by a third, picking up an impressive five points during the early lockdowns of the pandemic.
Even with all of that growth (and massive focus on improving digital channels), digital retail sales accounted for just over 16 percent of total sales in Q2 2020. Brick-and-mortar, or in-person sales, still account for the vast majority of total retail sales. And while the focus on digital in 2020 was not only critical to survival in the short term, it will also be important for future competitive positioning in the long term as people start to return to stores in 2021. Ultimately, retailers will find that what they achieved in the past 10 months was just the beginning — of not just a digital transformation, but an omnichannel one, too.
Understanding the New Omnichannel Customer
One long-term benefit of forced e-commerce activity was an increased focus on customer data and insights. Capturing not just the customer’s contact information, but also their shopping preferences and purchases, provides a foundation for an omnichannel approach that can improve a huge number of different initiatives. Sephora is famous for its data-driven in-store sales approach, and in 2021, it’s likely many more retailers are in a position to follow the beauty retailer’s lead. Point-of-sale systems have the ability to share recent online shopping activity with store associates, for example.
There’s also likely to be an uptick in new store technologies to take advantage of the newly captured customer insights as well as to cater to a customer base that has become accustomed to scrolling and browsing virtually. It’s likely that many brands step up their use of kiosks and virtual mirrors, for example.
What’s more, channels like SMS push and mobile apps have more potential than ever to add support to the in-store experience, from well-timed promotions to artificial intelligence-driven shopper assistant apps. Many retailers are likely to reimagine retail floor space, with more real estate spend on fulfillment with less space for merchandising. Mobile can enhance the new self-serve experience in-store with things like QR codes for available size search or options to purchase and ship directly within the store.
With so many people getting used to Zoom calls for work, school and telehealth appointments, there are also opportunities to bring store associates into someone’s own home for customer consultations for people who don’t live near a store. Or alternatively, imagine that a customer has their eyes on an item from the store, but wants to compare in-store and online prices, or see if the item exists at another store branch in a different color. Instead of engaging the sales associate who may be busy, or having to go to the store in the first place, they can chat with a bot.
Supporting Omnicommerce for the Long Term
After saying for years that they prefer a seamless shopping experience across channels, customers truly tested this request in 2020, shopping more on their phones and computers, and using new fulfillment options like buy online, pickup in-store. Brands like Dick’s Sporting Goods did a heroic job of creating a seamless experience and benefited enormously. Personalization is the key to differentiating in this newly sophisticated market.
As the brick-and-mortar experience is reimagined, retailers will invest in ways to identify the user upon visit vs. POS in order to better understand the customer and personalize the in-store experience in big and small ways. Promotions can be based on past shopping behavior. Product packaging can use QR codes to connect to social media. The options for a personalized experience across channels are truly endless, and need to be prioritized based on an understanding of the customer.
Creating the Omnichannel Team
A group of researchers looked at the companies that have invested in digital transformation and found that it’s not only about the technology itself, but also about having the right strategy, goals and people in place. Often, that goes hand-in-hand with choosing a technology platform that has the capabilities and support needed to help teams deliver. Creating a plan to build a better omnichannel experience for customers will fail if teams don’t change their approach, their goals and how they work together.
Rather than allowing teams to stay in their lane and rehash old goals or simply keep their heads down and try to work through the pandemic, transformative companies are willing to make big changes. For example, Best Buy had a goal to come out of the pandemic as a “vibrant” company. This winning strategy requires a move to a much more agile team structure with goals that not only take into account many near-term insights like changes in price sensitivity, but also keep focus on the long-term vision such as connected insights across channels. For example, rather than having a “digital” team and a “store” team, create centers of excellence around key goals like offering seamless curbside pickup, or personalizing communication across the site, email and mobile.
Working in retail through 2020 was a truly intense experience for many of us, and 2021 will bring its own share of new challenges. Since we can’t just hit “pause” on this unusual time, it’s good to know that 2020 forced us to forge a new path with many great opportunities that can make many more retailers “vibrant” companies in the future.