How to Position Yourself for the Post-COVID Retail Renaissance
Nothing more clearly underscores how quickly the world of retail can change than our current struggle with COVID-19.
The coronavirus pandemic has made business continuity a monumental challenge for all retailers, including fashion brands who traditionally have relied on giving customers a chance to see, feel and try on the garments they are shopping for.
But despite it all, there was one constant: Consumers expect a superfast, seamless shopping experience.
When retail and consumers emerge from living with COVID-19 to living after COVID-19, retailers will need to be ready to greet them with a customer experience that is every bit as good — or better than what they were offering at the start of 2020.They will need to pick up where progressive retailers left off before the virus’ spread.
One thing we know is that post-COVID-19, Amazon will still be a huge influencer. Other retailers will have to continue to provide customers with buy anywhere, pick-up anywhere convenience. In fact, 44% of retail enterprise executives surveyed by Signifyd in late 2018, told us that the reason they provided buy-online-pickup-in-store was to gain an edge on Amazon or keep up with the competition.
It’s all about creating a seamless shopping experience — one that understands that consumers don’t think in terms of shopping in channels. They just shop.
One need only look at a nimble, in-demand brand like Stance to see that the notion of channels and friction in the order flow are being left behind. Stance, a seller of socks, underwear and t-shirts that makes a personal statement, was born online. But throughout its history, it’s built a fan base by talking to customers where they are, whether that’s on social media or walking through Hudson Yard.
Retailers like Stance and lifestyle apparel retailer Mack Weldon are living proof that neither consumers nor retailers are going to give up on physical stores for good. Those brands’ stores serve as a sales channel, but also as a way to connect. They are a place for Stance to learn more about customers and for customers to learn more about Stance.
Retailers learned long ago that online or in-store can’t be one or the other. They’re learning now that multichannel can be a hedge against disaster, whether that’s an earthquake, a hurricane or a global pandemic.
Stance, for instance, has its destination stores. But it has also built a powerful experience online. It has moved to eliminate friction online by turning to automation to speed its order flow — practically eliminating its manual fraud review, for instance.
By doing so, the retailer is serving its discerning customers. It’s also ensuring that its workforce can be dispersed if need be without the worry of managing sensitive information and grappling with the inevitable disruption and decrease in productivity that comes from relocating workers to their homes or other remote locations.
The scale of the problem
As fashion retailers strive to perfect the omnichannel experience, new logistics and fraud management complications arise, introducing friction and frustration for their customers.
How serious a problem is it? It’s not unusual to see fashion retailers reject 15% of their orders. One global retailer came to us with a legacy fraud protection system that was rejecting 10% to 12% of its online orders.
Poor user experience (UX), payment gateways, fraud management, inventory issues lead to pressure points along the buying journey. The result: Sales slip, revenue leaks.
The good news? Most sales lost through friction in the shopping journey are within retailers’ control. There are steps a retailer can take to stem the leaks and boost revenue.
The first step toward plugging revenue leaks is breaking down the silos that obscure a clear view of the buying funnel. Freed from tunnel vision, the various teams can share the data and insights that they have to bring the problem into focus. That vision can lead to a dashboard that lays out the buyer’s journey and helps teams spot the leaks along the way.
Next, fashion retailers need to establish a revenue-leakage benchmark that shows them where they are in relation to the competition — competitors with similar average basket size and brand maturity.
Retailers can then identify where they are underperforming and take steps to strengthen those weaknesses. Next comes measuring the improvement. If the improvement was sufficient, it’s on to the next trouble spot.
The fear of fraudulent activity is causing retailers to put up barriers between themselves and customers. Treating innocent shoppers like criminals, can result in frustrated customers abandoning their online shopping carts. Worse, it can encourage them to take their business to retail upstarts that are already equipped with more seamless buying journeys.
There is hope for fashion retailers though. By marrying the right e-commerce platform with the right design, user-experience and risk-management practices, retailers can prevent revenue leakage and preserve lifetime customer value — placing them in an ideal position to flourish in the post-COVID retail renaissance.
Indy Guha is senior VP of marketing and alliances at Signifyd.