In an article for Retail Customer Experience, our creative director, EMEA, Amanda Glasgow explores how retailers can respond to the massive changes in consumer behaviour throughout the pandemic.
Originally published on retailcustomerexperience.com
Although online shopping has risen in popularity over recent years, grocery was always the section of the market that has remained stubbornly low, particularly with older consumers. Not any more. Recent research from Kantar in the UK found that online grocery spending by the over 65's shot up by 94% since the beginning of the Covid-19 lockdown.
And despite the fact that some stores are gradually beginning to reopen, there’s evidence to suggest that many consumers will continue to look online for their weekly groceries.
During the lockdown, most people have been experiencing something unprecedented in their lifetimes – so it’s hardly surprising that it’s altering their behaviour and values. Add this onto the already-dominant narrative around climate change and the scene is set for some far-reaching changes to the way many consumers make spending choices. Here are five business-critical ways retailers should respond:
- Listen to customers and pivot fast
The businesses that will survive over the next few months are likely to be those that manage to embrace uncertainty and drive digital transformation to adapt to the new reality.
There are some impressive examples of small companies that have entirely changed their models over recent months. Kansas-based independent bookstore The Raven Book Store decided to operate “like a pizza takeout” and now delivers books direct to people’s homes or to customers waiting curbside. Fast food chain Leon also adapted quickly to the tough conditions, by transforming its 65 UK restaurants into shops and selling meals online via both click-and-collect and delivery.
It's clearly easier for smaller and medium sized businesses to swiftly overhaul their operation, but the same kind of adaptation is possible for larger retailers too, as long as they prioritise consumer research and customer data to keep in touch with the detail of the quickly-changing environment and detecting new opportunities. Equally important for large retailers will be maintaining a deep understanding of the consumer journey, responding quickly to user needs and connecting with different demographics; particularly older consumers who have made the switch to online and may need more help and signposting with their online shopping experience.
- Adopt new technologies for home deliveries
The lack of delivery slots that frustrated shoppers during the pandemic has highlighted the fact that the infrastructure for a mass switch to online shopping simply wasn’t there. In order to avoid a similar situation in future, retailers are going to have to invest heavily into their online platforms and delivery systems.
Two technologies that could make a huge difference are drones and robots. Various companies and retailers around the world were already starting to experiment with the potential of these technologies, but Covid-19 has been a catalyst for increased innovation. A trial drone delivery service was launched in Ireland for example, to get medicines to people who were shielding themselves, while robots have delivered food to NHS workers in Milton Keynes in the UK.
With some experts predicting the Covid-19 pandemic could last for two years, the retailers that invest in more sophisticated delivery methods now will be the ones most likely to cope in any future outbreaks and, thus, earn the trust of consumers.
- Embrace customer self-service
When it comes to shopping in physical stores, consumer concerns over being too close to other shoppers is likely to be a significant driver of behaviour for some time.
Retailers will need to drive greater tech-based innovation within their stores to mitigate shoppers’ worries and support social distancing. Offering more self-service checkouts and grocery vending machines are obvious solutions for speeding up transactions and reducing contact in stores. However, retailers will need to explore alternatives to traditional touch screens, which, evidence suggests, could help the spread of Covid and other diseases.
It may be that AI technologies like voice and gesture recognition software will become a useful way to enable consumers to shop safely without contact. Equally useful in a post-Covid world will be checkout free approaches, such as the system offered within Amazon Go stores, where shoppers simply pick up what they want and leave; various sensors detect when products have been taken from the shelves and customers are automatically charged when they leave the store through their Amazon accounts.
- Explore creative retail partnerships
With fewer trips to stores, the potential for traditional impulse purchases is greatly-reduced. Retailers will need to think much more creatively about striking partnerships in order to target consumers at the newly emerging digital points of demand.
For example, it might be possible for food brands to pair up with home entertainment providers (a buoyant sector during lockdown) to capitalise on the new style of impulse buying moment. A snack brand could team up with platforms such as Netflix or Amazon Prime to offer a deal just as someone chooses their Saturday evening family film for example.
- Tap into the new community spirit
One of the silver linings that has emerged during the pandemic is an increased sense of community and the importance of working together to overcome challenges. Food shortages early in the spread of the pandemic led many consumers to band together with neighbours to make purchases directly from wholesalers or set up local WhatsApp groups so that elderly or vulnerable neighbours always have someone to safely pick up their groceries.
Only time will tell whether this is a long-term trend but the fact that consumers have woken up to alternatives to the traditional means of supplies is something the retail sector will need to respond to. Retailers could show themselves to be in tune with the times by creating online platforms that cater for groups of consumers wanting to buy in bulk or they could make it easier for their customers to make and send gifts to others, perhaps alongside a regular basket of goods.
As we all move into a ‘new normal’, consumers will expect retailers to enable safety in all aspects of operations and deliver the best user experience. Those stores that listen to customers and take advantage of new technologies and partnerships will become the winners in the new retail landscape