Retail is not dead: how some retailers are thriving during COVID-19
And what any retailer can do to adapt quickly
by Mike Lemon
posted on 08-07-2020
While there’s no doubt that COVID-19 has hit retailers hard, the fact is that retail has been in transition for quite some time. Rapidly changing consumer behaviors plus the continued improvement of data collection and analytics, and artificial intelligence (AI), to name a few, are changing the landscape faster than most retailers can keep up. At the same time, retailers have been battling everything from the e-commerce giants to misperceptions like “brick and mortar” shopping is dead.
Yes, retail is indeed challenged, but far from dead. Before the pandemic, 88% of sales were still occurring offline. COVID-19 certainly struck a blow, cutting retail growth forecasts for 2020 in half. Some retailers shuttered right away. Others, like grocery and pharmacy, saw sales grow out of consumer necessity and changing shopping behaviors. But still others – even those categorized as “non-essential” during the worst of the crisis – didn’t just survive, they thrived with sales increases from both existing and, surprisingly, new customers.
While essential retailers like grocers and pharmacies experienced growth because of COVID-19, many questions about maintaining that growth still loom. Consider this: Before COVID-19, households visited an average of five different grocery stores to complete their shopping list. During the pandemic, 40% of households reported going to far fewer stores, possibly even just one, out of safety concerns, while others skipped the store all together and shopped online. Additionally pre-COVID-19 impulse buying represented 70% of their purchases. So…
- How can those grocery stores that benefited from increased traffic retain those customers if/when consumers feel safe returning to their pre-COVID-19 shopping ways?
- How do you recreate an in-store experience that encourages impulse buying for the customers now shopping online?
- How can non-essential retailers that rely on an in-store experience continue to drive sales online should their stores need to close again?
- Will consumer behaviors further change due to shopping fatigue from waiting in line to enter the store, taking a temperature check, etc., all that may impact the joy of shopping?
How the successful non-essential retailers stayed afloat
While it seemed obvious that essential retailers would thrive during the pandemic, some non-essential retailers also found ways to not only survive but actually grow. How? Simple. These retailers were much further along in their digital maturity than most. They clearly had a strong strategy rooted in the core digital principles of customer experience management (CXM). They were able to define the customer journey, leverage data, make data-driven decisions, and utilize technology to: create real-time customer profiles; drive superior content velocity to quickly and efficiently create personalized content at scale; manage cross-channel orchestration to deliver a singular message across multiple channels and devices; benefit from artificial intelligence and machine learning capabilities.
These core digital pillars provide real opportunities for success for the right-now and for the future, as retailers gradually return to a new normal. Even “essential” businesses that may not have seen a drop in demand will still need to follow these principles as the public continues to limit the number of in-store visits.
The shoes I bought but didn’t need
Like most people working from home, I was spending more time online, and I started thinking about getting a better work-from-home wardrobe that was comfortable but presentable for conference calls. I started my hunt with a quick online search where I was quickly served several clothing options that interested me. From there I clicked on a few sponsored ads, visited some websites and made a couple purchases from brands I knew well.
Then after my search, like any good omni-channel consumer, I spent time on various online platforms across multiple devices ranging from social media, to blogs, to online magazines. I was quickly drawn in by clothing ads from a wide variety of retailers, including one traditional brick-and-mortar store I had always considered too stodgy and stylistically conservative.
But clearly they had invested heavily in their digital strategy because I was quickly presented with clothing options that were the style, fit and design that I was looking for. So I bought a few items, directly from my mobile phone, seamlessly, because the purchase was so easy given my ability to pay digitally with all my information pre-loaded to the form. These interactions allowed the retailer to quickly build a profile on me along with using other second- and third-party data all integrated into one customer profile. Then the AI kicked in and served me more products perfectly in-line with my style, and my affinity for the brand quickly grew, causing me to visit the retailer’s website directly.
Mine is just one small example. Millions of people are still shopping, and they’re also creating Tweets, posts, forwarding emails, etc. All this data – which could reach 463 exabytes worldwide each day by 2025 (exabytes are 1,0006 bytes) – can seem overwhelming, but this brand – and many others – have the capabilities to create profiles in real-time and present customers with products they didn’t realize they wanted.
What AI and data analytics can deliver
The beauty of the situation right now is that we have more technology than ever to identify who is shopping and pinpoint their needs down to the smallest data point. We shouldn’t dismiss the idea that people still like to shop in actual stores – it’s still the primary revenue driver of most retailers – but it makes sense to recreate that experience online for shoppers who are venturing out less.
Online shopping is increasing both over time and rapidly due to the pandemic. And those consumers are spending additional time on personal entertainment, platforms like TikTok, Instagram, Twitter, and streaming services like Hulu. They’re also using multiple devices at the same time, such as watching TV and checking Facebook on the phone during commercials. This trend of using multiple devices can be captured with AI tools, much like geo-targeting ads worked when people were on the move. Now that they’re in their homes more, omni-channel marketing and real-time customer profiles are more critical than ever, so retailers can capture customer attention regardless of their device or location.
The key now: steps to optimizing the customer experience
Obviously, driving sales requires more than creating a few targeted ads. It’s creating more meaningful, personalized experiences for your current customers, generating awareness of your brand with new customers and winning back lapsed customers.
Fortunately, this no longer requires deep investments, large operational changes, or significant amounts of time. Cloud-based technology, software-as-a-service, automated data integration and other modern tools make significant upgrades faster and easier than in the past.
Step 1: Conduct a digital maturity assessment
It’s likely that your company already has a lot of excellent data. Does it allow you to capture buying trends? Are you able to use it to create a smooth customer journey from start to finish? Do you need a more efficient process to collect and integrate data? A simpler way to create and deliver customized content? If not, what are your sticking points? Reviewing your current state against the optimal state is a great place to start.
Step 2: Don’t reinvent the wheel
There are products out there that can easily be integrated into your existing CXM. Look at what others retailers are doing successfully. Identify the technology tools that can help strengthen your targeting and selling capabilities. Our consulting team understands the challenges retailers are facing in this environment, and the upside is that the tools that can help you the most – from data analytics and content optimization – can often be implemented into existing platforms and launched quickly.
Step 3: Begin as soon as possible
There’s no reason to wait. The Adobe Experience Cloud and Adobe Consulting Services bring you the power of real-time customer profiles mined from the data you already collect. We’ve created rapid setup programs to onboard, deploy and train customers in as little as 30 days. You’ll be able to see results and metrics within days of getting started, with continuous opportunities to improve and expand your CXM programs.
How Adobe can help
Getting you digitally mature is no longer a long, daunting task. Adobe partners with retailers that are at every point along the digital maturity spectrum, even those that have had to cut budgets and staff. Our customer experience consulting team can help align your strategy, your current assets and your business goals to the achieve the core principles of CXM.
We can help your company prove that retail is not dead. Sophisticated and successful CXM is much more achievable than you might think. Get in touch to learn more.
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Topics: Digital Transformation, Campaign Management, Personalization, Retail
Products: Experience Cloud