Reinventing the store for a post-lockdown world

Publish date:

In a post-lockdown world, what services and capabilities will be required to unleash new retail experiences that offer customers more meaningful ways to interact with brands and their products and entice them back into stores?

Even before COVID-19 fundamentally changed how we live our everyday lives, the way we shopped and where we did it had already started moving away from the traditional paradigms. Not only did we as consumers have many alternatives to choose from – shopping in-store, online, order & delivery, click & collect, etc. – we had also started demanding new levels of convenience, experience and personalisation to go together with these options. The turbulence created by these trends was starting to push retailers to adapt their business models to repurpose the traditional retail store.

And then COVID-19 happened… what was termed “turbulence” before started feeling like a gentle breeze compared to the shifts the pandemic brought about. Back in March, stores were already seeing drops in footfall, but then once lockdown was imposed, many were closed or repurposed entirely to stay open and the overall footfall reduced by 81.4%. Admittedly, a lot has changed since the pandemic hit in March till now when restrictions are being lifted and stores and entertainment venues gradually re-opening. However, the lockdown has left more permanent marks on our shopping habits which we need to understand better in order to grasp the effects they might have on the retailers’ quest to reinvent their physical spaces.

Social anxieties and health & safety

As restrictions continue to ease, we can expect that many people will look for more human interaction after the long lockdown. However, retailers will increasingly need to combat a new type of anxiety about physical space and close human interaction by creating a sense of cleanliness and order within their brick-and-mortars. For the short-to-medium term it’s clear that plexiglass, staff PPE, one-way routes and hand sanitiser will be here to stay for most retail stores, but there will likely be more permanent shifts required across store capabilities and operations. As indicated by Capgemini’s latest ‘Smart Stores’ report which found that 59% of customers are willing to use automation technology in-store and many believe that it represents an answer to the main pain points associated with physical shopping. Touchless technologies like AR/VR, voice assistants, mobile and contactless payments, and facial recognition seem like viable ways to minimise anxieties from close social proximity in physical stores without compromising (and actually augmenting) the in-store experience.

Some retailers have already started experimenting, such as French grocery giant Carrefour, who has unveiled its cashier-less concept store. As items are picked up, they are automatically registered to a customer’s digital basket and seamlessly paid for using facial recognition. In a similar fashion, a liquor store in the US have even trialled the world’s first voice-powered in-store shopping assistant which uses navigational LED lights and an Amazon Echo to shortlist product recommendations.

Capgemini’s Applied Innovation team took these experiments a step further in their recent partnership with Action for Children to create an interactive in-store experience for their two-week popup store. The core of the new store experience was Elf.ai, a gift-predicting system that uses AI to detect the emotions of potential donors based on their reaction to gift suggestions. Not only did they achieve 160% of the initial donation goal, but 93% of the 550 visitors went on to make donations proving that personalised experiences foster emotional connections with brands and drive customer engagement.

Online and offline connectedness

From contactless experiences, to connecting the online and offline, retailers will need to focus on bringing the two spheres together. Online sales growth was up +43.5% YoY in August, demonstrating how quickly customers can make the switch from physical to digital shopping channels. With a quarter of the UK population expecting to change their shopping habits permanently, it’s unsurprising how devastating the wide-spread impacts were for retailers who failed to enable the right e-commerce capabilities when many non-essential stores were asked to close. By having the right capabilities in place, retailers can easily transition between offline and online to offer a seamless and connected experience. Take, for example, the traditional changing room: it requires both human proximity and a multitude of people re-wearing the same items. These cramped spaces could be increasingly replaced with augmented reality mirrors or digital avatars. This will encourage people back into physical retail spaces by offering customers a new and innovative way to experience products and virtually ‘try on’ clothes instore. By extending ‘virtual’ changing rooms into the realms of the online experience, retailers will not only further mitigate the proximity challenge, but also enrich customer profile data, thus empowering their employees with insights to create more personalised and engaging in-store experiences that will ultimately help increase footfall.

Needs over wants and a higher purpose

The difficulty in finding some essential products during the lockdown might ‘simplify’ the consumption habits of retail customers by focusing more on the ‘needs’ rather than the ‘wants’. During the lockdown weeks, we saw a growing interest in local communities and in bigger causes driven by purpose. One example is the tendency for many consumers to ‘shop locally’ more by engaging with local producers to understand the story behind their products. This shift could open the opportunity for large retailers to partner with local businesses creating weekly rotating pop-ups in-store. By connecting customers face-to-face with local producers and their products, retailers can unleash a new product discovery experience, enabling purposeful interactions to build loyalty, trust and a strong sense of community all within the store. Large supermarkets are yet to put this into practice but the appetite is clearly there, seen by the pop-up supermarket in New Mills which promotes local produce and the ‘Pop-up Grocer’ who promote a selectively curated list of innovative brands and producers.

Conclusion – reinventing physical retail for customers (cautiously) yearning for experiences

With the further easing of lockdown measures, we will start waking up from our 2020 customer slumber with a renewed appetite for meaningful experiences. Rather than advertising a new lipstick or crisp new shirts, retailers will need to leverage the things that were completely taken away from us during the lockdown months: the physical nature of experiential spaces and human interaction. In line with the changes in customer habits we outlined above, this would mean accelerating the move away from the traditional store to offer contactless experiences and a seamless blending between the offline and online worlds. By further repositioning to support local producers, retailers will home in on the changing priorities of consumers in a post-COVID world. Never before will redefining physical retail space be more important. Grabbing that last packet of fusilli will no longer be a priority, and to stay ahead of competitors, retailers need to refocus their efforts on the changing consumer habits in order to entice customers back into stores.

 

Authors


Stoyan Petrov

Senior Consultant, Inventive Shopping (Capgemini Invent)

Stoyan works within the Brand & Experience team at Capgemini Invent. He works with CPR companies on their cutting-edge customer and loyalty propositions helping them design and build the right business and technology capabilities to drive customer-focused digital transformation

 

Fiona McAndrew

Associate Consultant, Customer Transformation (Capgemini Invent)

Fiona works within the Brand & Experience team at Capgemini Invent. She has worked within the Inventive Shopping team to outline future retail trends and what they mean for retailers in terms of creating new ways to shop, new ways to engage and new ways to build loyalty with customers.

Related Posts

Customer Experience

The evolution of customer analytics

Date icon March 10, 2022

This blog post explores the evolution of customer analytics, how customers have taken power,...

Consulting Services

With technology now topping the agenda, what are the three big choices for leaders to make?

Date icon January 17, 2022

Making big choices around technology is hard – how can organisations take the right steps to...

Consumer Products

Brands, be bold to satisfy your customers!

Date icon November 10, 2021

Consumers’ affinity to the rise of digital technologies lead to changing consumer...