Although the restrictions have been adjusted a bit and many stores have reopened, there is no doubt that the number of customers in the physical stores has decreased, whereas the opposite is true in the e-Commerce universe. The requirement to wear a mask and, most importantly, the risk of becoming infected makes many people choose to shop online.
A customer-oriented industry
Retail is an enormously customer-oriented industry, where the customers' wishes and needs are a very high priority. Today, consumers expect an omnichannel and personal experience when shopping. Therefore, many retailers have spent the last few years expanding their presence, tying their sales channels together, and using customer data to tailor personalized offers. For example, we see that more and more retailers are expanding their physical presence with a webshop or a social media profile and implementing loyalty programs.
Covid-19 has forced retailers to turn up their adaptability and adapt to consumers' wishes and needs at a pace never seen before in the industry. In no time, initiatives were made to minimize physical contact and ensure good hygiene. Physical retailers began establishing an online presence, several opened up for the possibility of Click and Collect, payment with cash was banned, and contactless payment was introduced. New sanitary rules were implemented, and the arrangement was changed to ensure the distance between customers.
Although the Covid-19 crisis will hopefully ease off soon, we can expect some of the changes made in the retail industry during 2020 will continue. According to KPMG, Covid-19 has accelerated some fundamental trends that also existed in the retail industry before. Deloitte also writes that Covid-19 has emphasized the importance of some trends that were already here. We have gathered an overview.
Contactless payment and minimum interaction between customers and staff
Several retailers have placed plexiglass walls at the checkout and refused cash payment to reduce the risk of infection between the store's employees and customers. Overall, Covid-19 has increased the use of payment methods that require little or no touch. This can, for example, be payment via mobile or contactless credit cards. It was already an emerging trend, but it has received a massive boost in recent times because it reduces the risk of infection.
A more technical initiative to minimize infection is the implementation of self-service solutions where the customer does not interact with a sales employee at checkout. Self-service solutions are also a trend that has been upcoming in recent years but accelerated due to Covid-19. Before distance became essential, the primary reason for implementing self-service solutions was to provide customers with a more convenient and smooth shopping experience. The self-service solutions reduce, or at best, remove the line and save the customer time. Most customers choose the self-service solution precisely because the line usually moves faster or does not exist.
Read more about why you should consider implementing self-service solutions in your business, here.
Self-service solutions undoubtedly contribute to a better customer experience, especially now that we need to minimize social interaction. According to Business Wire, 87 percent prefer to shop where there are self-service solutions under Covid-19. With self-service solutions, retailers can show that they care about their customers and staff.
Omnichannel, omnichannel, omnichannel
An omnichannel mindset has been a growing trend in retail in recent years. Today, many have a presence on several different online and offline channels, where their customers are offered a seamless shopping experience.
When the corona crisis broke out, physical retail stores worldwide were forced to stay closed for a while. This meant that consumption was primarily moved online. According to Nielsen's "The New Shopper Normal" survey:
- Only 9 percent of consumers worldwide regularly shopped online before Covid-19.
- When the restrictions became effective, 27 percent of consumers shopped online for the first time.
- In May 2020, 44 percent said they shopped online weekly, with 23 percent doing so several times a week.
Covid-19 has had significantly less impact for online and omnichannel retailers than for retailers who have only had a physical presence.
Most physical stores have reopened now, but many have discovered the convenience of shopping online. Our new reality with a global health crisis means we need to minimize physical contact and wear a mask when we are around more people. Many people have lost their jobs due to Covid-19 and are in a financially vulnerable situation where every penny counts.
The boost in online shopping caused by Covid-19 does not mean that physical retail has lost its purpose. Many people prefer to use both online and offline channels when shopping. For example, this can be in terms of Click and Collect. The customer does not expose himself to the risk of getting infected by standing in line at the checkout but can easily pick up his purchased items immediately. According to Adobe Analytics, the number of Click & Collect orders in the United States in April 2020 increased by 208 percent compared to April 2019.
Consumers who, due to Covid-19, are in a financially vulnerable situation use online, and offline channels to research where to find the best prices and offers before leaving the house to visit the physical store or buy it online.
To be successful with omnichannel, your sales channels must work together. Your customers must be presented with the same prices, discounts, and inventory, regardless of which of your channels they meet you through. Omnichannel is a trend accelerated by Covid-19 and will undoubtedly be a trend we will also encounter in 2021. Even though the coronavirus hopefully is more under control, the restrictions are eased..
Do you want to know more about what omnichannel is and entail? Read here and get an in-depth answer to the question: What is omnichannel?
People over profit
Offering benefits such as free shipping and great discounts is an important initiative to create a solid customer base. However, emphasis on great values has never been more important to consumers than now. A study by Forrester shows that the proportion of consumers who consider a company's values before buying is increasing. In 2017, it was about 52 percent of consumers, and by the time the report was released in early 2020, it had risen to more than 55 percent. According to 5wpr's "Consumer Culture Report", 71 percent of Millennials are willing to pay more for a product if they know a lot is donated to charity.
Covid-19 has emphasized the importance of this trend. The companies that, during the pandemic, have prioritized profit over their employees have experienced criticism from consumers. An example is the Danish retail giant Bestseller, which laid off 750 employees in the spring and postponed the rent payment to 200 store landlords.
The need for unity and a sense of solidarity grows when experiencing a crisis. At the same time, a crisis with significant economic consequences as Covid-19 can create mistrust of businesses among consumers. That was the case during the global financial crisis in 2007. According to Walther and Skytte, authors of the book: Medbruger: Forstå hvordan et velformuleret purpose kan gøre skeptiske forbrugere til tillidsfulde medbrugere, trust in a company can be restored if the company manages to communicate that they are responsible and helpful. Therefore, "people over profit" is a message that is essential to communicate right now.