The rediscovery of retail post-pandemic
Retail changed fundamentally, on a global scale, during the COVID-19 period – and as lockdowns lift, consumers and retailers are discovering even more ways to innovate.
In the World Retail Congress’s most recent Retailing in a Time of Crisis report, part of a series which documents the industry’s post-pandemic evolution, a number of key trends are clear. Here is a selection of some of the key trends from the first half of 2021 featured in the report:
What next for the store?
As stores re-open, their purpose and appeal has to be shaken-up radically, with the customer placed truly at the heart of every decision and every innovation. During lockdowns, innovations like buying online and pick up in-store, self-check outs, and contactless deliveries came to the fore.
Chinese retailer Rainbow, for example, gives personalised product suggestions, tailored assortments and offers to in-store shoppers who share information and engage with the retailer through their app. “Consumers are now looking to shops for the social contact, the service experience and the inspiration,” James George, senior partner at OC&C Strategy Consultants, writes.
As convenience became the top consumer motivation, online shopping reached a penetration level we did not expect for at least five years, according to a report by Linda Zou, Boston Consulting Group’s (BCG) Partner in Bangkok, and Joseph Sun, BCG’s Managing Director and Partner in Hong Kong.
The need for digital solutions in the physical environment drove an immediate need to build an integrated omnichannel ecosystem, where the consumer experience between online and offline retail is fully integrated. Retailers came up with some incredibly interesting and innovative ways to accelerate change, such as allowing consumers to shop in-store for products which are shipped to their home either immediately or later that day.
The growth in livestreaming commerce is becoming a whole new channel, particularly in China, where Alibaba is investing in livestreaming to reflect Chinese consumer habits changing, highlighted in an article by Alibaba’s Erica Matthews and Liyan Chen.
Reality TV star Kim Kardashian sold out her new perfume line in minutes after doing a live stream to 13 million Chinese viewers. Even farmers are taking part to showcase the provenance of their food.
Ever faster delivery services are now the norm but, as JD.com in China is showing, this can be taken to a new level with proximity retail. This relies on sourcing products from bricks-and-mortar shops anywhere between a few kilometres or even just a few metres away, which is featured in an article by Ella Kidron, International Corporate Affairs at JD.com.
During lockdown, this meant customers sheltering at home could get basics delivered quickly with just a few taps, and the evidence suggests that they are now used to this convenience level. These brick-and-mortar shops may even ultimately function as mini-warehouses, potentially setting a global trend.
For retailers, there is an inherent tension between the increasing use of big data, statistical averages, and algorithms, on one hand. On the other, is the quest for building customer loyalty based on positive emotional experiences, says Alex Genov, Head of Customer Research at US retailer Zappos. To achieve true personalization, he argues, “treat customers as people instead of just numbers” and don’t just rely on algorithm-powered insights.
While sustainability was clearly gaining prominence ahead of the COVID-19 outbreak, during the pandemic, consumers became even more conscious that the planet, and all its people, share a collective fate. The growth rate for consumer goods marketed for sustainability is nearly four times higher than the market average, McKinsey research reveals, so innovation in this space is set to continue to accelerate.
For more on the latest retail innovations and the shop of the future, download World Retail Congress’s latest report, Retailing in a Time of Crisis: Mid-Year Review.
All brand names, logos and/or trademarks are the property of their respective owners, are used for identification purposes only, and do not necessarily imply product endorsement or affiliation with Visa.
Case studies, comparisons, statistics, research and recommendations are provided “AS IS” and intended for informational purposes only and should not be relied upon for operational, marketing, legal, technical, tax, financial or other advice. Visa Inc. neither makes any warranty or representation as to the completeness or accuracy of the information within this document, nor assumes any liability or responsibility that may result from reliance on such information. The Information contained herein is not intended as investment or legal advice, and readers are encouraged to seek the advice of a competent professional where such advice is required.