Achieving success in retail’s new normal

Owner retail shop turning sign board to open store after close lockdown in COVID-19 situation.

Image source: Adobe Stock/Pormezz.

When COVID-19 struck, retailers worldwide took a major hit — causing some stores to close, many more still threatening to, and consumers turning (even more than they had been) to online options, more willing to explore and try new brands.

Digital trends that were on the rise before the pandemic have kicked into warp speed in order to keep up with the changing market, while new options have blossomed, giving so many enticing opportunities that have vaulted to the forefront of customers’ minds.

According to McKinsey’s 2020 report titled, Retail Reimagined: The New Era for Customer Experience, “In a matter of 90 days, we have vaulted forward ten years in U.S. e-commerce penetration. Immersed almost exclusively in the immediacy, convenience, availability, and safety of digital experiences.”

Look no further than what happened with Cyber Week, between Thanksgiving and Cyber Monday. According to the latest data from Adobe Analytics, online shopping increased a whopping 20.7 percent over 2019. And Cyber Monday 2020 was the single largest online shopping day in U.S. history.

And it’s not just online shopping. Curbside pickup, in-store pickup, delivery, and numerous other options have also skyrocketed.

Online spending, in particular, has spiked, going up 55 percent YoY (grocery being the biggest, with online grocers seeing a 300 percent spike in traffic and 1–2x additional revenue), while in-person shopping (particularly within malls) has diminished considerably.

And some features which were nice benefits before — like contactless payment — have exploded in the market. In fact, 67 percent of retailers are now accepting no-touch payments via contactless cards, which is up 40 percent from last year. The use of digital wallets is up 44 percent, as are online and over-the-phone payments. Thinking differently in this new digital economy is becoming not only necessary, but table stakes.

To stay resilient, companies need to make decisions that evolve their business faster than ever before. Think of Walmart+, whose grocery delivery subscription now competes with Amazon Prime. Or IKEA, who has adopted AR/VR tech to view prospective product purchases. Even the classic Tractor Supply Co. has incredibly adopted same-day delivery.

Or Albertsons, which in October introduced Albertsons Pay, a contactless payment option in all its stores available through its “just for U” loyalty program. Not only does it provide shoppers with a safer payment option during the pandemic, but it also offers discounts and other deals from the app simultaneously. Albertsons has already seen 27 percent growth in app adoption since it rolled out the contactless payment option and now has 22.5 million active users, and this new technology will likely continue to drive up app engagement and open up new opportunities to engage with customers digitally with their brand, even when they’re not shopping in-store.

The evolution of the customer journey

With more ways than ever to engage customers, what retailers choose is increasingly vital for brand success. That means, what used to be as simple as inserting customers into basic marketing funnels is now becoming a complicated matter of knowing what each individual prefers as part of their unique customer journey.

“As brands vie for consumer attention in increasingly competitive digital environments, it is more important than ever to build real engagement with customers and offer real value,” McKinsey says in its 2020 report, Retail Reimagined.

Do customers want to minimize time in store and receive personalized online recommendations? Retailers must know and keep knowing, as trends are changing rapidly.

Take Walgreens for example, which introduced same-day curbside pickup in July in response to the pandemic. Customers now can place their order online, receive a confirmation email, then tap the “I’m here” link in the email upon arrival to the store, then a Walgreens team member comes outside with their items to load the car.

And look at how quickly restaurants adopted QR code menus and contactless payment options to reduce physical touchpoints during the pandemic. Those options changed in an instant, made available because of mobile and online considerations. Similarly, online engagement continues to boom (as shown in the Adobe Digital Economy Index for August, which indicated 60 percent of e-commerce traffic came from mobile/smartphone and 40 percent of online revenue was mobile) — including mobile payments, mobile pre-orders, and overall usage of mobile apps (like Nike’s impressive 80 percent increase in digital workouts). That boom — along with the rise of in-person digital screens — has caused improved in-store experiences (easier to locate items, less time in store).

Retailers can no longer afford to have mobile as a nice option, it must be central to their strategy. It’s more than just a channel now.

Even then, retailers can’t put all their eggs in one basket, because (all the while) channels like email have surged in importance, as well.

But not every innovation needs to be focused on digital engagement. In fact, retailers are finding new ways to drive in-person shopping at brick-and-mortar locations. In October, Adidas introduced a new flagship “hyper-local” store in London that houses products exclusive to that location, as well as the most coveted streetwear products, giving consumers and fans a reason to come into the new store again and again.

Regardless of which areas they choose to innovate, once they see trends in which channels customers are gravitating toward, they can start to allocate budget.

Reaching the right customers with the right message in the right place has become more complex than ever

Three things to consider in order to orchestrate personalized retail experiences

Ultimately, the ability to optimize the flow and friction of the customer journey has become today’s launching pad to grow revenues, gain wallet share, and create brand advocates.

Taking this approach will help you stay agile and powerful in steady and tumultuous times — and your customers will undoubtedly fall in love with you for caring for them well.