At a time fraught with uncertainties, where is the global retail industry headed?
By Retail4Growth Team | Retail4Growth Team | November 18, 2020
At a time fraught with uncertainties, where is the global retail industry headed? Leo van de Polder, MaRC- Global Development Director for Shop! the global trade association dedicated to enhancing retail environments and experiences, who has a demonstrated history of working in the retail marketing and advertising industry for many years, in an exclusive interaction with VMRD, shares his insights on the status of the global retail industry. Presented below is the first in a series of these observations shared by him. Do watch this space for more in the coming months.
What is your current take on the global retail industry post Covid? What are some key observations?
American and European shopping habits shifted dramatically due to the pandemic, driving rapid adoption and growth in BOPIS services. But there is still a continued importance of brick-and-mortar stores. Even at the peak of lockdown, online transactions did not exceed 30% of total retail sales — and many of those sales were supported by physical stores, with click-and-collect sales soaring.
The pandemic is making the concept of separate channels even more meaningless. Many sales attributed to ‘online’ are actually multichannel. Multichannel Retail and COVID-19 also reveal that the sales penetration of the online channel is falling as consumers return to stores and make greater use of fast-growing multichannel services.
As online shopping growth explodes, many retailers are designing the in-store CX and the online shopping experience to complement rather than compete with each other. The goal of omnichannel retail is to deliver an integrated and consistent experience for shoppers regardless of how they make their purchases (in person, online, or via a smartphone app).
If you had list down some specific key challenges that the global retail solutions and support industry faces today, what would they be?
- Global pandemic leading to the great recession
- Limited marketing budgets
- Decline in the use of in-store marketing materials, thus leading to lower sales for these materials.
- Decline in store remodels and buildouts, thus leading to lower sales for retail environment products and design services.
- Lack of in-person networking making suppliers feel disconnected
- Massive layoffs and forloughs in the retail supplier industry
- Changing customer behavior
- Customers’ demand for a quick, safe, seamless retail experience
Source: Shop! www.shopassociation.org
Moving forward what do you think will be the key game changers for retail? Where do you see maximum investments happening in retail?
Customers do not distinguish between online and offline options. Retailers need to make channels invisible to shoppers who seamlessly move between them for browsing, product research, point of transaction, receipt of the product, and returns or aftercare.
- In-Store Customer Experience
With shorter, less-frequent visits by focused consumers, you have one chance to get the customer experience right. The new wave of disruption has caused critical shifts in behaviors that will be here to stay for quite some time. Operating hours are shorter, and that in-person visit is shorter, more focused, and quite different than it was six months ago. People are going to stores less and making more conscious, calculated decisions about where they shop and what they buy.
Many customers are eager to get back to shopping. However, the shopping they are craving goes beyond the transaction. It entails a personal connection between the brand and the consumer. The difference is that customers — not brands — are now driving what that connection means. It’s up to retailers to create those connections and exceed those expectations.
Retailers will have to accommodate not only safety concerns, but also a shift in the way that customers want to interact. For non-essentials, this includes building store hours around customer convenience instead of forcing their hours on customers. It might mean companies will have to take one-on-one appointments outside of traditional operating hours. They’ll have to adjust to flexible selling, accommodating customers who want to transact in person and those that prefer a virtual option. It requires more planning for more engagement with associates.
Luxury and specialty goods stores will need to become both a showroom and a sample space where both experiences are more curated for each individual. Whereas coffee bars and complimentary pastries were once a nice way to make customers feel welcome and relaxed, retailers will have to find new, more bespoke ways to create hospitality. They will also need to convey “we’re glad you’re here,” so that consumers don’t feel like a burden.
- Broadcast selling in a third place
Customers might not want to walk around the entire store nor meet in an enclosed office. One idea is to build a new platform for unique selling opportunities and engaging one-on-one interactions, a concept we term ‘broadcast selling’. This is a dedicated area of your space where you can host both in-person and online appointments.
This open, neutral ground where the associate and the customer can meet and lay out merchandise becomes the third place. While intentional, it shouldn’t appear too formal. Instead, it feels more welcome and personal, and of course, safe. Just as most of us have moved our offices into our kitchens or dining rooms, this shift in selling becomes more natural and friendly, but also more tailored to the individual.
This is also an opportunity for retailers to create a social respite for customers. When people can feel calm in an environment, they’re more likely to feel confident in their purchase decisions.
We can also leverage spaces that were originally hospitality areas and alter tools for virtual appointments. This next generation of hospitality thoughtfully done with the right lighting, technology, and atmosphere should be fluid and configurable. For example, lighting that can be altered for daytime vs. nighttime appointments can change the mood. A backdrop that can be changed based on pre-determined customer criteria has the potential to resonate more. All elements must be carefully curated, including the highly adept associate. Associates are the glue to this experience. When they are highly trained in your products and/or services — as well as your brand — they can become your key differentiator.
So for your new broadcast studio to be successful, it involves the right setting, the right technology, and the right salespeople. In today’s world, cultivating that relationship with your customer is just as important as cultivating your bottom line. It is your bottom line.
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