Report warns that COVID-19 has rewritten the rules on retail
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The COVID pandemic is rewriting the rules of retail, according to a thought-provoking article posted by the Harvard Business Review on Monday.
The article warns that retailers should stop expecting business to return to normal and should be preparing to take their customer experience to the next level.
It points to latest data from McKinsey, reputedly the world’s largest consultancy firm, that shows consumers are likely to continue the behaviours they have adopted during lockdown.
These include stay-at-home shopping and less visits to brick-and-mortar retailers, trends already reflected in the fishing tackle market with many companies telling Angling International that post-COVID they intend to put more emphasis on e-commerce.
The data reveals that consumers are more carefully evaluating what they spend and where, and that most categories have seen a 15% to 30% increase in the use of online channels.
Brand loyalty has also changed with more than 75% having experimented with different shopping behaviour during the crisis by trying new brands and stores.
The current developments have strong implications for business-to-consumer players, many of whom are already changing their operating models and their media spends to better position themselves.
A quarter of consumers consider that a company’s treatment of its employees during COVID is a buying criterion.
The McKinsey data is further evidence, the article suggests, that retailers can no longer rely on pre-COVID strategies; that they must take at least five key steps to establish a new baseline for customer requirements; that simply trying to ride out the storm won’t be enough.
Highlights of the report include:
• Retailers will need to offer a simple and seamless e-commerce experience – from browsing to researching, selecting, purchasing and returning/exchanging goods. Customers will no longer tolerate below par digital shopping experiences.
• Retailers will have to ensure their sites are mobile responsive and offer integrated services such as click and collect.
• Retailers will have to give people a compelling reason to visit that overcomes their health concerns and habits adopted during lockdown. Stores like Bass Pro Shops and Walmart have shown that holding events or offering special experiences and services will attract customers, keep them in-store for longer and lead to more sales.
• Retailers must elevate their perception of good service beyond sales support, handling complaints and managing returns if they expect to compete with online players.
• Retailers should invest more in social commerce which not only generates sales through social media channels, but generates social interaction, peer support, customers reviews and recommendations and more.
• Retailers will have to adapt their premises to comply with health and safety regulations to meet basic consumer expectations. This will include controlling numbers of people in stores, contactless transactions, improved speed of service and more self-service options.