The Future of Retail Sector Beyond 2020
Retail sector all around is reshaping and restructuring it’sr business landscapes to ensure continuity and competitiveness in the real time world. Even with the society reopening after lockdown, social distancing is here to stay as a way of life. The existence of these measures has given rise to new shopping habits and preferences of the customers which remain if these measures exist and even later due to the habituation factor.
This has resulted in a disruption in both the seller as well as buyer mechanisms. Customers are a little more sceptical before going to a shop and are slightly more inclined towards online purchase relying on the security and safety.
A bulletin by Mckisney estimates that the pandemic has accelerated the adoption of e-commerce by around 10 years in just a few months. This is further backed by the IPOS survey estimating around 60% of the consumers are scared to explore physical stores due to the fear of infection. This has resulted in restructuring the businesses from the retail sector valuing consumer safety and hygiene more than ever before.
The good news however, is that stores are quickly adopting innovative ways to keep up with these evolving patterns. Leaders in the retail sector have completely changed their mindsets towards consumer approach and brand positioning to gain a competitive advantage over the few functioning stores.
Rise in the E-Commerce Industry
One of the visible effects of the pandemic is the steep rise in e-commerce purchases of the customers. According to Euromonitor international, there has already been a close to 10% rise in the goods sold online since the last 3 years. However, the pandemic will propel these numbers to shoot up much higher than the previous records.
A visible que to this is the evident rise in online grocery purchase once the lockdown started. In the initial days of lockdown itself, people highly relied on the online purchase of daily groceries. Although there might be a drop in the demand for these after the vaccination, people will still prefer to stay in similar flux owing to the comfort and reliance on quality.
Online and Contactless Payments
With safety concerns on rise, customers are adopting online and cashless card payment methods to place their orders. To keep up with this brands from the retail sectors will have to incorporate various methods to accommodate these payments such as cashless self-checkout dashboards etc.
Various players in the rmarket like Mastercard which accounts for around 75% of the card payment market have already raised the minimum level of card payment without a pin to go cashless.
With online shopping becoming the new gold, retailers are going to have to invest in digital channels enabling click and buy to capture these technology relying customers. The existing retailers are already further down into these digital funnels. According to a recent Shopping Index by salesforce, the digital revenue in the second quarter of 2020 grew by an astonishing 70% compared to the previous year.
In-Store ExperienceAppointment based shopping is one recent adaptation to enable safe and seamless shopping in the physical stores. According to a forecast by Fact.MR, the appointment schedule software in various industries including medicine, retail etc is expected to reach a CAGR of approximate 10% between 2020-2030. Almost every retailer who previously relied on the brand image and quality to ensure purchase are now concentrating on ensuring the safety of the buyer to leverage on the sales.
As a part of this strategy, brands are beginning to incorporate appointment-based shopping to ensure minimum crowd in the shop with maintained safety standards. Few of the stores are also providing an advisor in the appointed slot to make the shopping more personalised. This has not only targeted the safety of the customer, but also enabled to personalise the shopping with the provision of the advisor.
Apart from Appointment based shopping, contactless shopping is another avenue explored vigorously by the retail sector in recent times. Several stores have incorporated various technological means to enable contactless shopping such as self-checkout dashboards, screens to ensure protection, inclusion of separators at uniform distances to maintain social distancing etc. While the use of separators and screens might reduce after the offset of the pandemic, other means to enable contactless shopping will however continue to play their role in making the shopping experience sophisticated.
With BOPIS increasingly preferred by the customers, stores ranging from grocery speciality goods have begun placing curbside pickup stores. According to a release by Supply Chain and Demand Executive, curb-side orders have increased by a substantial 208% after the onset of pandemic. With these forms of sales gaining relevance, few of the stores also began using their stores as fulfilment centres of goods calling them Dark stores.
Technology Based Innovations
With various industries affected severely by the pandemic, the ones that survived were those which incorporated technology into their sales funnel. Various methods like kiosks, AI screens, Interactive bots and avatars etc became part of the new normal shopping experiences. According to Global Kiosk Market Growth based on the statistics in 2019, the kiosk market is expected to reach a CAGR of 13% between 2020-2025.
AI and VR in Sales
According to the survey by Global Web Index majority of the customers are getting inhabited by BOPIS (Buy Online, Pick-up In Store) and also mass virtual and digital shopping. Going by these illustrations, the brands that quickly adapt to the inclusion of AI and VR are the ones who have the most prospective chance of winning the market share.
With AR being able to augment the product in the real world environment, retailers are exploring various sweet spots to enable the visual presentation of these customized features.
There have been instances of companies increasing their conversion rates upto 250% after the inclusion of AR using 3D models. Few of the major stores like IKEA are also enabling printed product catalogues that support AR to view full size visuals of the product and also avail instant buying opportunities.
As a part of the Virtual Shopping Experience, AR has also enabled the possibility to try and buy. This is mainly evident in the industry of clothes, apparels, and footwear industries.
Few of the brands like Johnny Walker have also enabled storytelling AR to make the experience more immersive and engaging to the viewer.
With the major leaders of the retail sector following these trends, it’s no surprise that the industry is gradually adapting these owing to follow in the footsteps of the leaders
Social Media MarketingRecent surveys revealed that the pandemic has shifted the pattern and duration youngsters spend on social media. It has illustrated that there has been an average of at least 10% rise in the presence of youth on various social platforms like podcasts, social pages, etc.
With this letting them explore more information through media, retailers have already begun to invest in social media marketing and influencer marketing. Recently Facebook has started the Facebook shop which enables brands to sell their products to the buyers through the media page. The brands can leverage the information these media pages already possess to make the catalogue more personalised based on the client preferences and their search patterns.
With these avenues of profits provided by the technology and new forms of marketing, retailers are in a race to pursue these avenues by footing in on these new marketing strategies. With the unparalleled advantage of new innovations in the technology, the approach to update the sale strategies are unlimited to the retailers and hence, rolling in the never unending circle of innovations and its effects on sales.