As Britain’s high street sprung to life this week and non-essential retailers opened their doors for the first time in three months, a very different picture is emerging for retailers across the board as they adjust to the new normal. Most companies have had to dramatically change the way they do things, with more and more turning to technology solutions while shifting greater focus to the retail processes and customer journeys, to help get them back on track and navigate the challenges that still lie ahead.
This week, news pages were peppered with images of mile long-queues of shoppers seeking extra savings and new purchases as well as the much-missed retail experience. Yet while the re-opening of these stores brings a myriad of hope to citizens waiting for life to return to normal, the minds of retail C-Suite executives are elsewhere.
The high-street has been hit hard by lowered footfall due to lockdown measures, and with reports that the UK economy has shrunk by a record 20.4% in April – the focus on customer experience is fundamental to the longevity of the retail sector. Alongside this, online retail reflected a 12 year high in April with many choosing to simply forego the physical shopping experience all together.
With social distancing rules resulting in long queues, questions over sanitation and increased consumer anxiety over public safety – how will retailers make visits to the store feel the same? What will draw consumers back to brick-and-mortar once they have been enticed by an increasingly developed digital experience? How will businesses adapt to these new rules – and remain adaptable if the possibility of a ‘second wave’ comes again? How can retailers retain the high level of online traffic captured during lock-down? These are just some of the questions keeping retail executives up at night.
The lasting effect of operational fault lines
Essential retailers were the first to feel the shock of the impact on operational efficiencies and as time has gone on, operational stability remains a key consideration for businesses looking to survive. Food retailers experienced dramatic surges in demand as they struggled to cope with new peaks, and have since seen changes not only in what people are buying, but also how much they are buying and the way they are buying it.
For many business leaders, the focus up to now has been on how to keep the lights on – making sure there are still products on shelves and managing the influx of traffic to their websites all the while dealing with frustrated customers who cannot get delivery slots. Many have taken a ‘band aid’ approach to deal with immediate issues as they unfolded and plug the gaps. Moving forward, executive focus will be on how to sustain operational stability and back longer-term solutions into these areas.
Further shocks to come
In the coming weeks, we may see that sales do not return to anywhere near the volume that they should. This will vary by category and location, for example city retailers are unlikely to see a rush in footfall with many people still working from home, and customers will no longer have the option to pop into a shop during their lunch hour. Retailers are going to need to carefully consider how they make the in-store experience as valuable as possible for customers while still ensuring that they get enough customers through the door to make it worth their while to stay open.
With social distancing measures in place, retailers also need to consider how to give customers an experience that makes them want to come back. For many who rush back in a spree of revenge spending, they may find the new sterile environment, coupled with long queues undesirable, which means they do not come back for more.
With store capacity limits in place due to social distancing measures, queuing is likely to become a major pain point for customers. We have advised several retailers, prior to the pandemic, on queue management solutions such as self-checkout areas and mobile pay options. With these adaptations already in place, some retailers are already ahead of the curve in terms of implementing the kind of technology needed to manage long queues. The well-known London-restaurant Padella is one such example, dealing with the pre-pandemic challenge of minimal seating space and high demand by using technology that allows for consumers to enter a ‘virtual queue’.
We have seen retailers begin to utilise similar queue management technology to that ease the inconvenience and eliminate negative customer experience long queues inevitably cause. Asda is one example of a retailer currently trialing a similar technology aimed to enable safe social distancing measures and prevent people waiting for long periods of time in inclement weather. While we’ve also seen Aldi regulating shopper traffic with a traffic light system, based on individual store customer limits which are in line with the current two-meter social distancing rules.
Customer loyalty needs a re-think
The shift to online poses a new threat to customer loyalty as people are more likely to be swayed by the offerings of other brands. For example, a consumer who typically used the supermarket closer to them is no longer locked in by location and could instead choose to shop according to their preference for product offerings, choice, or better customer experience.
Social analytics tools can provide a solution for this issue by identifying needs and wants retailers can radically enhance personalised shopping experiences. Understanding and engaging with consumers in the right way has never been more important, which includes determining the right message to send through the right channel at the right time – something which must be fueled by data.
COVID-19 will have caused many people to pause and reflect on their shopping habits and the brands which they give their money to, and so brand purpose will be equally as important in maintaining and building new relationships as customers want to relate more to brands with characteristics and values which match their own.
Preparing for the unpredictable
The spikes in demand seen at the beginning of the pandemic are illustrative of what could come next and retailers need to be better prepared for these spikes if they do occur. From the ability to rapidly scale up contact centre operations, to deploying technology that enables people to try on garments virtually without actually having to touch them, all the while seamlessly controlling the number of people allowed in a store at one time, we can the acceleration of new investments from retailers over the coming weeks and months as they aim to work against the impact of the pandemic.
The aftermath of the uncertainty will mean that executives need to prioritise business agility to support the dynamic nature of the sector and those of the customer along with change in norms in society.
Dynamic forecasting and scheduling to help manage staffing requirements as demand changes will be important in enabling this agility, as will automating processes throughout the organization and predictive analytics driving a forward-thinking approach to decision-making. Connecting employees through a corporate social enterprise ensures that communications can be managed effectively to the right employees, regardless of whether they are in head office, stores, distribution centers or elsewhere. Greater connectedness can help to improve efficiencies, increase employee satisfaction and support sustained business performance.
Businesses need to be adequately prepared for a sudden reduction or an extension of social distancing guidelines. If these guidelines are relaxed, how do they adjust their controls and if there is a resurgence, how can they rapidly and safely flip back the other way?
Despite the many moving parts, retailers can now look forward to deploying technology solutions that minimise pain points across the board and strengthen their business for what is to come next. That said, companies must act fast to embrace these new technologies and build a positive experience for their customers. While building scalable, agile organisations seem may seem like a daunting idea for retail executives – it is essential for the longevity of businesses in preparation for what is to come.
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|Christopher Bairds||Steve Hewett|