The COVID-19 pandemic has hit retailers in unprecedented ways. By now, businesses and consumers have all felt the impact and no matter what side of the line you’re standing on, you’re probably wondering: What’s next?
So let’s try to clear things up with some insights we’ve collected over the past couple months.
First thing to note: Businesses that were slow to embrace digital are now rushing to meet shoppers online. Frankly, the choice between full digital adoption and sticking it out in the physical world has become a choice between survival and… You get the point. Meanwhile, businesses that already have a digital strategy are struggling to understand customer behaviors and buying patterns in this new paradigm.
One thing’s for certain: too many businesses are stuck playing catch-up when they could be using this time to get ahead.
Pure ecommerce revenue lift across all categories over last year
The impacts of COVID-19 are certain to have far reaching implications on how we do business. In fact, they could completely change what our definition of success looks like in the retail space. If that scares you, don’t let it.
Change represents opportunity, and this could be the moment you’ve been waiting for.
Welcome to the new norm
If one thing’s for certain during these uncertain times, it’s that things are constantly changing. You could say that change has become the new norm.
If retailers are looking to use the current climate to their advantage, they need to internalize this fact and come to terms with what it means. Given the uncertainty consumers are facing today and probably in the future, when the dust finally settles, it’s going to be very challenging to understand their needs based on past behaviours alone–which is how retailers have typically understood and marketed to consumers.
One of the reasons for this is that consumers are forming new habits and behaviors and they’re doing so at an unprecedented pace. Some behaviors will no doubt be short-lived. For example, we’re not going to be hoarding toilet paper forever or stocking up on flour. Others, however, might persist over the long term, well beyond the pandemic, as shoppers continue to be cautious. Take, for instance, my newfound appreciation for community supported agriculture and the big boxes of fresh produce that show up on my doorstep every week. Consumer spending will likely remain low for the foreseeable future, for a number of reasons, like job uncertainty, and retailers will have to continue to contain costs.
Another interesting consideration is brand loyalty. Consumers today are buying from vendors who can fill their immediate needs over those they’d typically buy from. Given that shoppers are less concerned with brand affinity, it’s highly likely that they’ll emerge from this pandemic with entirely new brand and channel preferences. As a retailer, it’s critical to tune into the needs of your customers, adapt your approach, and get to market quickly to build trust and establish brand loyalty.
eCommerce isn’t a luxury, it’s table stakes. And if you haven’t invested in an eCommerce platform to connect you to your customers at this very moment in time, when they need you the most, then you’re putting your business at risk. The best way to understand customer needs in this environment is to draw insights from data through your eCommerce platforms, and if you don’t have one, well, you have no idea what your customers need or how to help them, which is not a good thing at all.
Anticipating customer needs in times of uncertainty
So many of the retailers we’ve spoken to feel lost. They don’t have the insights they need to correctly engage with customers and ultimately fill their needs. And we’re not just talking about brick-and-mortar shops, either. Even retailers that are digitally mature are struggling. That’s because the historical data they’d typically rely on has become entirely unreliable. For example, understanding that a customer in the past loved luxury brands and wasn’t price sensitive may not be relevant anymore since consumers are spending less of their discretionary income.
Me thinking of stuff to buy online bc I’m bored pic.twitter.com/oK84gUknQp
— autumn 👑 (@autumnpapakee_) May 6, 2020
Unfortunately, historic data reflects a world that was static, but that’s just not the world we’re living in anymore. We’re living in a world of Black Swan events. This is all to say that the rules of the game have changed.
What’s a retailer to do?
Rely on the data you have, and if you feel like it isn’t context-rich enough, augment it to leverage real-time insights. Finally, source third-party intelligence to fill any blind spots. Real-time insights provide an understanding of customer behaviors that will be far more relevant today than any historical data you might have. Third-party intelligence from a trusted provider can bring in signals from relevant industries, or even incorporate trends in COVID data to provide further much-needed clarity.
“The lipstick effect is the theory that when facing an economic crisis consumers will be more willing to buy less costly luxury goods.”
Instead of cars, travel, going out, they buy online goods and services.
What happens afterwards? Do people revert?https://t.co/6yjPjmK9X1
— Chamath Palihapitiya (@chamath) May 7, 2020
By gaining a firm understanding of today’s landscape and how it’s influencing purchasing behaviors, businesses of all sizes can adapt quickly so that they’re accurately responding to consumer needs at critical touchpoints in the customer journey. The result? Businesses can stay aligned with customers and hit the KPIs that matter most to them.
Interested in learning more? Check out my virtual chat with leaders across the retail space to gain a deeper understanding of the current state of commerce in the U.S. and Canada.
About the author
Nick is the director of customer success and implementations at integrate.ai, where he drives measurable value for customers, grows the CS organization, and builds world-class enterprise software. Prior to integrate.ai, Nick was the head of product at Globalive Technology, and a management consultant executive at Accenture. Nick likes to DJ at friends’ parties, though he’ll deny it if you ask him. Also, he’s a huge comic book movie nerd.