The Future of Retail Sector Beyond 2020
To face the after-effects of the pandemic, the Retail sector all around is reshaping and restructuring it’s business landscapes to ensure continuity and competitiveness. 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 customer. Although 2021 seems like a year of normal life, these measures continue to sophisticate the process of shopping.
The change in customer priorities towards safety has led to a complete disruption of seller and buyer mechanisms. The retailers therefore remodelled their sales funnels to meet these new demands. While these upgrades were a talk of the future, the pandemic has forced the retail to make it a reality.
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.
However, the good news is that stores have quickly adopted innovative ways to keep up with these evolving patterns. Leaders in the retail sector have completely changed their mindsets towards consumer and brand positioning to gain a competitive advantage
Rise in the E-Commerce Industry
One of the visible effects of the pandemic took place in the e-commerce industry. According to Euromonitor International , there has been a close to 10% rise in the goods sold online in the last 3 years. The pandemic further propelled these numbers to shoot much higher than the previous records.
A visible cue to this is the evident rise in online grocery purchases once the lock-down started. In the initial days of lock-down itself, people highly relied on the online purchase of daily groceries. Although there was a slight drop in these percentages post vaccination drives, the figures still remained higher than before.
Online and Contactless Payments
With safety concerns on rise, most customers have adopted online and cashless card payment methods to place their orders. To keep up with this brands from the retail sectors will began incorporating various methods to accommodate these payments.
Various players in the market 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 began investing in digital channels enabling click and buy to capture these technology relying customers. The existing retailers are already further deep 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.
Appointment-based shopping is one recent adaptation to enable safe and seamless shopping in 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 previously relied on the brand image and quality to ensure purchases. The pandemic has forced them to concentrate on ensuring the buyer’s safety to leverage on the sales.
Aligning with this, brands began incorporating appointment-based shopping. This ensured 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.
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. Few of them include self-checkout dashboards, screens to ensure protection, the inclusion of separators at uniform distances to maintain social distancing, etc. The use of separators and 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 the 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
The pandemic has led to the downfall of various stores and brands. The survived, however, were the ones that were technologically updated. 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 Retail Sector
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. Brands and sectors have quickly adapted to the inclusion of AI and VR to win the market share.
There have been instances of companies increasing their conversion rates up to 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. They are also providing instant purchase options to the customers to enable a seamless purchase.
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, apparel, and footwear industries.
The major leaders of the industry are setting precedents to the followers with their successful integration of these technologies. Eventually, the majority of the market revamps itself for similar integrations to keep up with the competition.
Social Media Marketing
Recent 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 so many youngsters on social media, the brands are no late investing in social media marketing. Youngsters being the potential buyers, brands in the retail sector also began employing influencers to captivate them. 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. They can exploit the information regarding the user search pattern to help them discover the right product.
With these avenues of profits provided by the technology , retailers are in a race to pursue these avenues. Although the pandemic has been a major factor driving these changes, the overall retail sector began up-scaling its approaches. These changes are accompanying the transgression of retail from a visionary of technological integration to a realistic explorer.