{"id":507589,"date":"2020-06-24T16:14:00","date_gmt":"2020-06-24T16:14:00","guid":{"rendered":"https:\/\/www.capgemini.com\/?p=606059"},"modified":"2025-03-26T09:55:21","modified_gmt":"2025-03-26T09:55:21","slug":"the-retail-renaissance","status":"publish","type":"post","link":"https:\/\/www.capgemini.com\/pt-en\/insights\/expert-perspectives\/the-retail-renaissance\/","title":{"rendered":"The retail renaissance"},"content":{"rendered":"\n<header class=\"wp-block-cg-blocks-hero-blogs header-hero-blogs header header-blogs\"><div class=\"container\"><div class=\"hero-blogs\"><div class=\"hero-blogs-content-wrapper\"><div class=\"row\"><div class=\"col-12\"><div class=\"header-title\"><h1>The Retail Renaissance<\/h1><\/div><\/div><\/div><\/div><div class=\"hero-blogs-bottom\"><div class=\"header-author\"><div class=\"author-img\"><img decoding=\"async\" src=\"https:\/\/www.capgemini.com\/pt-en\/wp-content\/uploads\/sites\/42\/2021\/05\/Steve-Hewett-capgemini-invent-1-7.jpg?w=208?w=200&amp;quality=10\" alt=\"\" loading=\"lazy\"\/><\/div><div class=\"author-name-date\"><h5 class=\"author-name\">Steve Hewett<\/h5><h5 class=\"blog-date\">June 24, 2020<\/h5><\/div><\/div><div class=\"brand-image\"> <\/div><\/div><\/div><\/div><\/header>\n\n\n\n<section class=\"wp-block-cg-blocks-group undefined section section--article-content section--story-content article-body\"><div class=\"article-main-content\"><div class=\"container\"><div class=\"row\"><div class=\"col-12 col-md-1\"><nav class=\"article-social\"><ul class=\"social-nav\"><\/ul><\/nav><\/div><div class=\"col-12 col-md-11 col-lg-10\"><div class=\"article-text article-quote-text\">\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p>While this crisis has created new challenges for customers and retailers alike, and will have reshaped societies in its wake, it has also accelerated inevitable shifts in retail that were already underway.<\/p>\n<\/blockquote>\n\n\n\n<p>Particularly the expectations of customers towards convenience, personalization, experience, sustainability and, of course now, safety. This is a time of great challenges, but also of great opportunities to set a new purpose for retail and develop the propositions and capabilities that will transform the ways in which to engage with customers, sell to them and create loyalty.<\/p>\n\n\n\n<p>Before the crisis, traditional retail was already in trouble and significant changes were occurring. Retailers were being challenged by new market entrants \u2013 digital native businesses from inside and outside the sector \u2013 offering customers new levels of discovery, convenience, and personalization. Meanwhile, a more purposeful, conscious consumer was emerging, more mindful of their consumption, and more aware of the social purpose of their favored retail brands. All against a backdrop of steep competition on price and rising costs to sell goods all placing strain on the operations.<\/p>\n\n\n\n<p>A new retail renaissance had begun, forcing retailers to adapt to new business models, as digital disruption fueled rocketing customer expectations.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-a-sharp-and-universal-shock\"><strong>A sharp and universal shock<\/strong><\/h3>\n\n\n\n<p>The COVID-19 pandemic took everyone by surprise. The shock was sharp and universal. Customers immediately faced both health and financial uncertainty, with 58% of customers considering postponing planned high-value purchases of items such as cars, furniture and consumer electronics, as shown in our <a href=\"https:\/\/www.capgemini.com\/2020\/05\/how-covid-19-is-affecting-car-sales-and-consumer-attitudes\/\" target=\"_blank\" rel=\"noreferrer noopener\">recent study<\/a> on automotive sales.<\/p>\n\n\n\n<p>A further Capgemini <a href=\"https:\/\/www.capgemini.com\/wp-content\/uploads\/2020\/04\/Covid-19-Consumer-Behaviour-in-CPR.pdf\" target=\"_blank\" rel=\"noreferrer noopener\">study<\/a> on consumer sentiment confirms that the pandemic has sped up the already prevalent shift occurring to customers\u2019 spend online. Many retailers have experienced the same growth in the first 10 weeks of COVID-19 as they had in the previous 10 years, sustaining the sorts of spikes they might normally see a few days of the year, over many weeks. &nbsp;Furthermore, results from our global survey on customers show that this switch to online is likely to persist and grow over the course of 2020.<\/p>\n\n\n\n<p>Regardless of channel, customers have developed new anxieties about health and safety which are impacting their decisions on what and where they buy, how they buy it, and how they want to receive it.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-a-mixed-bag-of-impacts\"><strong>A mixed bag of impacts<\/strong><\/h3>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p>The grocery sector has faced an unprecedented surge in demand for essential items \u2013 no one is fast forgetting the great toilet roll shortages of 2020!<\/p>\n<\/blockquote>\n\n\n\n<p>These surges in demand led to <a href=\"https:\/\/www.linkedin.com\/pulse\/retail-ready-restart-post-pandemic-world-samrat-biswas\/\" target=\"_blank\" rel=\"noreferrer noopener\">200% increases in grocery sales in the US, and a 229% increase in grocery app download between Shipt, Instacart, Walmart, and Kroger<\/a>.<\/p>\n\n\n\n<p>Of course, not everyone in retail has experienced this \u2018silver lining\u2019 of COVID-19. Other areas of retail, such as luxury and fashion, or restaurants, have endured an unprecedented decline in sales. In part, this is due to store closures, but it\u2019s also down to customers foregoing the purchase of non-essential items and switching their spend to brands that could met their needs online, as their lives were suddenly constrained to their homes, and doubts begun to surface about financial wellbeing. In the US this amounted to a <a href=\"https:\/\/nrf.com\/blog\/how-small-retailers-are-adapting-covid-19\" target=\"_blank\" rel=\"noreferrer noopener\">$430 billion downturn in retail revenue, according to NRF estimates<\/a>, with a 58% reduction in foot traffic across retail industries, and a more than 37% drop in online sales for apparel and footwear.<\/p>\n\n\n\n<p>In Germany, the fourth largest economy in the world, there was a 25.7% drop in the consumer climate index (May versus April 2020); 50,000 companies in the retail sector were at risk from bankruptcy; 110.1 million employees were on reduced working hours; and 52% of customers had postponed planned, high-value purchases, like cars*.<\/p>\n\n\n\n<p><em>* relating to Germany Sources: Capgemini Research (2020), Appinio Consumer Study (2020), GfK-Konsumklima MAXX (April 2020), Statista 2020, HDE 2020, Bundesagentur f\u00fcr Arbeit (April 2020)<\/em><\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-learnings-from-others\"><strong>Learnings from others<\/strong><\/h3>\n\n\n\n<p>Retailers in China were the first to feel the brunt of the crisis, to respond, and to start seeing the effects of rebound. They quickly developed <a href=\"https:\/\/www.capgemini.com\/2020\/03\/lessons-learnt-for-grocery-and-fresh-food-distribution\/\" target=\"_blank\" rel=\"noreferrer noopener\">new digital platforms and propositions<\/a> to support new ways to reassure, engage and let customers shop through the lockdown period and beyond, as the new normal emerged.<\/p>\n\n\n\n<p>Hema innovated in workforce flexibility, introducing a \u2018resource leasing model\u2019, which shared underutilized employees with other retailers and restaurants. Tesla developed contactless sales, exploring zero-contact test drives and vehicle home delivery. Walmart transformed its online experience, meeting capacity increases following massive peaks in online demand for fresh meat and vegetables. They also collaborated with delivery services to bridge the last-mile gap safely. And Panera transformed its restaurants into grocery stores. It also deployed its workforce to support other businesses.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-it-s-time-to-restart-retail\"><strong>It\u2019s time to restart retail<\/strong><\/h3>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p>Many retailers around the globe now face existential questions. How will they restart in the new environment? What will trade through stores look like? And what does this all mean for the future purpose of my business?<\/p>\n<\/blockquote>\n\n\n\n<p>To answer these questions, we need to consider what immediate, temporary responses are made necessary by COVID-19; and what threats and opportunities have been created by the fundamental shifts in retail that this crisis has accelerated. For example, the rapid shift towards online, a consequential decline in footfall to stores, and the diminished role that physical stores play when they only sell product.<\/p>\n\n\n\n<p>But it\u2019s not all doom and gloom. People still want to shop. Our <a href=\"https:\/\/www.capgemini.com\/wp-content\/uploads\/2020\/04\/Covid-19-Consumer-Behaviour-in-CPR.pdf\" target=\"_blank\" rel=\"noreferrer noopener\">research<\/a> indicates that 89% of hesitating customers think that an attractive offer or a good consumer experience could persuade them back towards buying.<\/p>\n\n\n\n<p>Retailers need to focus their energies on solutions to challenges across four key areas. What is the future purpose of retail? What is the evolution of the store \u2013 now and next? What are the new selling concepts to recapture sales and build foundations for future growth? And how will customer engagement and approaches to loyalty need to change to keep hold of customers and any new market share built through the COVID-19 crisis?<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-a-new-purpose-for-retail\"><strong>A new purpose for retail<\/strong><\/h3>\n\n\n\n<p>Without doubt, traditional retail as a business model is facing challenges, and not just because of competition and customer expectation. Most customers are also coming to the realization that we simply buy too much \u2018<em>stuff<\/em>\u2019. The impact of consumption on the environment and society has become part of the mainstream consumer conscious. COVID-19 will have given many customers a new perspective on the purpose and ethics of the organizations they shop with.<\/p>\n\n\n\n<p>Our recent <a href=\"https:\/\/www.capgemini.com\/wp-content\/uploads\/2020\/04\/Covid-19-Consumer-Behaviour-in-CPR.pdf\" target=\"_blank\" rel=\"noreferrer noopener\">study<\/a> shows that customers want consumer product and retail organizations to embody a sense of purpose in the crisis and beyond. Purpose is an organization\u2019s \u2018raison d\u2019\u00eatre\u2019, or its reason for existence, that goes beyond profit. <a href=\"https:\/\/www.capgemini.com\/wp-content\/uploads\/2020\/04\/Covid-19-Consumer-Behaviour-in-CPR.pdf\" target=\"_blank\" rel=\"noreferrer noopener\">Research<\/a> has shown that purpose-driven organizations grow at more than twice the rate of other organizations. In this critical time of crisis, consumers look to organizations to step up and showcase a sense of responsibility towards society and the community.<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p>Our survey reveals that more than half of customers expect organizations to showcase their sense of purpose and give back to society \u2013 both during the crisis and beyond.<\/p>\n<\/blockquote>\n\n\n\n<p>This is all laddering up to a bigger change in retail; the function it performs; the value it delivers to customers; the ethics and sustainability of how it operates; and the broader role it plays in the communities it serves. Retailers must look forward and define a new purpose to guide their brands, propositions and the development of the new strategic capabilities and assets. All while continuing to optimize the business of today!<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-the-accelerated-evolution-of-selling-and-the-store\"><strong>The accelerated evolution of selling and the store<\/strong><\/h3>\n\n\n\n<p>Now, more than ever, it\u2019s clear that the shopping experience of physical stores, and even \u2018traditional\u2019 ecommerce, must change.<\/p>\n\n\n\n<p>The evolution of the store is happening all around us. In the present, because of social distancing and hygiene concerns, but in the longer term because of the commoditization of the buying experience online. The task is to balance these needs and expectations to achieve safety, unique experiences and hyper convenience.<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p>This crisis is an opportunity to rethink how store space is used, how it will be used in the future, and the value it can deliver to customers now and in coming years.<\/p>\n<\/blockquote>\n\n\n\n<p>This north star can be used as the basis to explore the changes required to achieve social distancing, for example, while also building the foundations for further innovations in the shopping experience.<\/p>\n\n\n\n<p>In the US, Amazon Go is already out there as an example of a store format that has half a foot in the future. With its complete automation of the checkout and sophisticated analytics, it is very well equipped to support current needs by providing a near \u2018touchless\u2019 grocery shop, to allay customers\u2019 heightened concerns about physical contact with people and machines.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-create-new-irresistible-ways-to-sell\"><strong>Create new, irresistible ways to sell<\/strong><\/h3>\n\n\n\n<p>The crisis has dramatically increased the importance of online shopping and accelerated the need for retailers to embrace multi-channel sales and marketing, offering new and innovative ways to reach customers. <a href=\"https:\/\/www.linkedin.com\/pulse\/retail-ready-restart-post-pandemic-world-samrat-biswas\/\" target=\"_blank\" rel=\"noreferrer noopener\">Nike\u2019s CEO said that even though it lost the majority of mall traffic in China during the lockdown<\/a>, the net impact of the disruption was minimized by having the right online-commerce capabilities.<\/p>\n\n\n\n<p>Retailers need to attract customers back to shopping with exciting experiences. For example, in China, retailers are combining learnings from shopping channels and game shows to make online shopping more compelling and competitive through live streaming. Live streaming shops in China increased <a href=\"https:\/\/www.alizila.com\/taobao-live-rethinks-the-future-of-stores\/\" target=\"_blank\" rel=\"noreferrer noopener\">by over 700% during the lockdown<\/a>.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-understand-engage-and-inspire-to-win-hearts-and-minds\"><strong>Understand, engage and inspire to win hearts and minds<\/strong><\/h3>\n\n\n\n<p>Many retailers have found themselves exposed when trying to support their customers during this crisis. They\u2019ve realized they lack the tools and processes to target and talk to their customers, especially those with specific needs. They\u2019ve found their service operations are unable to deal with spikes in volume. And they\u2019ve seen there are gaps in their ability to track and manage online orders all the way to the customer\u2019s door. There is a race on to close these capability gaps, reconnecting with customers that may have become disenfranchised during their experiences of the crisis.<\/p>\n\n\n\n<p>For others, there is another race altogether. That is, how to keep hold of new customers and new market share gained during the crisis. This is exposing a different set of challenges. How to understand the wants and needs of this new customer. And how to create loyalty, so they continue to shop as life rationalizes whatever the new normal is. This then, is about building quick insights on new customers, and developing propositions and capabilities to engage them and build their loyalty.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-fast-track-the-future-of-retail\"><strong>Fast track the future of retail<\/strong><\/h3>\n\n\n\n<p>The one certainty is that there will be no business as usual. Whatever course the new environment takes, retailers will need to create new ways to reassure, engage and sell to their best customers. Before the crisis, we created Inventive Shopping to empower retailers in the retail renaissance, and now it forms a key pillar of our post COVID-19 retail restart strategy. To explore new ways to stimulate and evolve the future of retail, visit our <a href=\"\/pt-en\/solutions\/inventive-shopping\/\">Inventive Shopping<\/a> webpage.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-explore-our-services\"><strong>Explore our services<\/strong><\/h3>\n\n\n\n<p>If you would like know more about our services in relation to this post, please click below:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><a href=\"\/pt-en\/solutions\/inventive-shopping\/\">Inventive Shopping<\/a><\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-css-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-author\"><strong>Author<\/strong><\/h3>\n\n\n\n<figure class=\"wp-block-image alignleft\"><img decoding=\"async\" src=\"https:\/\/www.capgemini.com\/wp-content\/uploads\/2020\/06\/Steve-Hewett-capgemini-invent.jpg\" alt=\"\" class=\"wp-image-490635\"\/><\/figure>\n\n\n\n<p>Steve Hewett is an expert of retail transformation. He leads the Global Retail Customer Experience offers at Capgemini Invent. You can contact him at <a href=\"mailto:steve.hewett@capgemini.com\">steve.hewett@capgemini.com<\/a><\/p>\n<\/div><\/div><\/div><\/div><\/div><\/section>\n","protected":false},"excerpt":{"rendered":"","protected":false},"author":103,"featured_media":507590,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"cg_dt_proposed_to":[],"cg_seo_hreflang_relations":"[]","cg_seo_canonical_relation":"","cg_seo_hreflang_x_default_relation":"{\"uuid\":\"5be573c2-19f8-49e1-b110-29916df5988b\",\"blogId\":\"\",\"domain\":\"\",\"sitePath\":\"\",\"postLink\":\"\",\"postId\":null,\"isSaved\":false,\"isCrossLink\":false,\"hasCrossLink\":false}","cg_dt_approved_content":true,"cg_dt_mandatory_content":false,"cg_dt_notes":"","cg_dg_source_changed":false,"cg_dt_link_disabled":false,"_yoast_wpseo_primary_brand":"","_jetpack_memberships_contains_paid_content":false,"footnotes":"","featured_focal_points":""},"categories":[1],"tags":[],"brand":[],"service":[33],"industry":[20,30],"partners":[],"blog-topic":[81],"content-group":[],"class_list":["post-507589","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized","service-customer-experience","industry-consumer-products","industry-retail","blog-topic-customer-experience"],"yoast_head":"<!-- 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