The future of retail is digital

Retail was going digital way before COVID-19 took the world by storm. Digital retail growth was up 262%. This wasn’t just due to COVID-19 induced spending. While some online retailers might be enjoying the short-term boost, it’s imperative that retailers experiment and test strategies online to ensure their businesses have a long-term future. 

Digital revenue growth has utterly eclipsed the benefits of the in-store experience. Many consumers have emerged from lockdown and found that they have little desire to visit the shops once again. Some iconic retailer including G-Star RAW have closed their brick and mortar stores entirely.

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The changes brought about by COVID-19 were not unexpected, they were always on the horizon. The unusual economic landscape simply accelerated these changes in consumer behavior and retailers capabilities.

Habits formed and retailers evolved 

The post COVID-19 world is shaping up to look very different to the world we were used to a few months ago.

Retailers have had to adapt to the online environment very quickly. The ones that have successfully done so will doubtless be retaining many elements of this new strategy in their business plans going forward. 

Consumers will also be retaining many elements of their new COVID-19 shopping habits, even as restrictions are eased and shops open for business as usual. 

Currently, one in five Australian shoppers have been purchasing online, picking purchases up in store, or using ‘click and collect’ services more than they did in May. 16% have increased their use of automated retail stores, and 13% have made more purchases over social media.

Shopping online for parcel delivery or click and collect is incredibly quick, easy and user friendly. As consumers become more accustomed to purchasing online. Customers may well find that they prefer to use these methods more of the time. They will become a permanent part of our retail landscape. That is why it is so important for your business to adapt and evolve.

Climb your way out of this crisis by going all the way

Businesses are facing three separate challenges during this crisis. Currently most businesses are oscillating between the stabilise, normalise and accelerate phases.  The digital maturity of individual businesses at the time COVID hit will have affected how quickly they move through each stage.

Many retailers with more primitive online presences have simply not been agile enough to adapt to the many rapidly changing conditions that have been facing us this year. Businesses that did not build an adequate online presence very rapidly found themselves being left behind and found themselves letting their customers down.  

Predictably, businesses with well-established digital arms were quickly able to normalise operations and are now in the accelerate phase. They’ve adopted new and innovating processes, put real and permanent changes in place and successfully transitioned to a work-from-home or flexible workforce. 

Of course, brick and mortar stores are bouncing back better than ever. However, retailers seeing the smoothest transitions are the ones with diversified income streams, fast-tracked digital operations, and evolved offerings. 

If you’re still stuck in the stabilise or normalize phases, that’s ok. You’ve still got a chance to set yourself on the path for success, as long as you act quickly.

Of course, launching a spanking new ecommerce business is daunting, especially if you are digitally inexperienced. What most small business owners are good at is being pragmatic. Whether you launch your ecommerce business by yourself, or hire someone to do it for you, make sure that you are clear about where responsibility lies and have a mindset that is conducive to learning and adapting.

The customer is always right. They are defining the future of retail 

For too many years retailers have relied too heavily on face-to-face interactions. Some of these retailers have been in operation for decades before the internet was widely used. These retailers defined themselves according to the personalized customer service they deliver face-to-face. Many aspects of the physical retail experience cannot be replicated online. This includes the personalized touch, and being able to touch, feel, smell the products. 

Unfortunately, you cannot rely on any of these advantages as shop traffic has dropped massively. This is because digital commerce opens your shop up for business to infinitely more customers. Online shops are open 24/7.  

Most importantly, online shops are able to offer far greater innovations in efficiency, innovations that brick and mortar stores are only able to dream off. For instance, some online shops source thousands of products. Others offer free delivery, same day delivery, or unique products that cannot be carried in store.

Don’t feel complacent just because your products have always done well in store. Many products that people traditionally bought in store transitioned to online long ago, such as makeup and shoes
Almost two-thirds of NZ shoppers expect to buy their essential goods online. Millennials and Gen Z consumers are the biggest online shoppers, but they’re not without steep competition. A whopping 26% of Aussie baby boomers also see themselves shopping for essentials online.

Each business will draw revenue in varying percentages from their physical retail, digital commerce and other channels. You’ll need to offer your consumers as many options as you can and engage them wherever and whenever they want to shop.