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Retail digitalisation: Responding to changing customer behaviour

23 Apr 2021

What will retail look like in the post-pandemic world? Customer behaviours and expectations have altered radically during lockdown — and many of these changes are expected to stick.

The most obvious shift has been the move online; it would’ve taken between four and six years to get to the levels we saw in May 2020, if ecommerce growth had continued at the pace experienced over the past few years.

For some retailers, the wins have been huge as a result. Those able to scale up existing online operations in response to demand have seen revenues soar as they gained swathes of new customers.

For others, especially those only just starting on their digital journey, the past year or so has been extremely tough. It has encouraged companies to re-evaluate business models and plan for a new future.

Responsible retail

Yet there were many changes in customer behaviour in 2020 that will provide tangible opportunities for all retailers – as long as they can respond.

The current retail buzzwords are local, sustainable and value.

Customers have not just moved online; they have done so mindfully. Repeated lockdowns and working from home have created a renewed appreciation for the natural world, leading consumers to think more about environmentally friendly, sustainable or ethical purchases.

Retailers that have gone the extra mile — focusing on the ethics behind their products, workforce wellbeing throughout the supply chain and their green credentials, will win big tomorrow.

Simple steps include opting for a courier service that is using or investing in electric vans – and making sure that this delivery option is promoted to customers at the time of purchase. Similarly, sharing green strategies, including information about where products are sourced, can help businesses stand out from the crowd.

Companies also need to prove their commitment to their green agenda and go beyond it, whether that is using 100% recycled and biodegradable packaging or ensuring factory workers are paid fairly and looked after.

For example, ethical fashion brand Lucy & Yak not only uses organic fabrics but also pay workers at their factory in India four times the state national wage. Not only is this approach the right thing to do, but it also shows that the brand cares more about people than margin lines – and that’s the branding that will win big in the future.

Catch the customer when you can Today’s “instant gratification” consumer is easy to lose. Such strategies can only be successful if retailers provide great experiences at the same time.

It doesn’t matter how much someone buys into a brand’s value — if it takes two weeks to receive an organic T-shirt or the item only pops up as out of stock when the consumer hits ‘buy’, they’re probably not coming back.

Opportunities are also short-lived. In today’s social media-dominated world, when Instagram-influencers can drive extraordinary spikes in demand, companies need to be able to meet it – or miss out.

According to research by Salesforce, almost half (45%) of consumers say they will switch brands if a company doesn’t “actively anticipate their needs”.

Furthermore, pandemic fatigue has set in: customers were patient at first, but expectations are right back up. With so much choice online, customers expect real-time stock information before they make a purchase. They want multiple delivery options and an easy returns process. And, of course, to be kept informed at every step of the way.

Efficiency is paramount

That means not only creating a smarter, more efficient and adaptable business model – but making sure people can see the immediate, accurate data they need to make the right decisions.

This is where digital technologies such as IoT, Edge Computing and analytics are incredibly important: they give retailers a way to track and monitor every part of the business. Real-time data from warehouses, stores and even delivery vehicles is helping retailers to understand and manage performance at every stage.

IoT data can also help retailers to understand how customers feel about the whole shopping experience.

Using RFID scanning to capture returns data, for example, is not just an important part of getting returned products back into stock for resale – it provides vital business knowledge. Are customers constantly returning shoes because they are a size too small? Can china breakages be traced back to a specific courier company – or even a certain route?

Retailers can use this information to continuously improve the customer experience – and it’s the quality of that experience that will be key to success in a post-pandemic world.

Are you ready to build the business of the future? We can help. Check out our guide to find out more.

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