Will These Retail Trends Prompted By the Pandemic Stay or Go?
As of August 2021, 60% of people living in the United States have received at least one dose of the COVID-19 vaccine, and half have been fully vaccinated, with numbers increasing daily. And while mandates and suggestions like standing in lines 6 feet apart and wearing masks in brick-and-mortar stores are still in effect in many places, life as retailers — and consumers — once knew it is certainly on the way.
The questions to answer, then, include what pandemic-induced changes should or will continue? Which should go away? How can retailers best comply? How can brands excel in customer experience when consumers and brand loyalty have fluctuated, too?
Let’s dive a little deeper into what’s going on in the world of retail and where brands should attempt to focus their efforts.
Some Things Will Stick — Others Won’t
Before 2020, consumers had been leaning more heavily into online shopping, home delivery, buy-online-pickup-in-store (BOPIS), more self-checkout lanes and mobile payments. These methods of shopping provide convenience for consumers and because of this, continue being adopted and implemented by retailers. In fact, processes like BOPIS and home delivery kept many retailers’ doors open during the pandemic.
It’s likely, too, that many retailers will continue investing in and using anti-microbial coating for shared surfaces, which limits germ transmission for highly touchable areas — think touchscreens, cash drawers, receipt printers and self-checkouts, for example.
However, other crisis-induced trends continue fading into the background.
Restrictive measures that include 1) plexiglass face shields worn by employees and barriers erected at the checkout and in restaurants, 2) appointments to shop in stores and 3) closing down checkout lanes — all of which were designed to enhance safety. They’re headed to the wayside.
Where to Focus Energy and Investments
Modern retailers should home in on four key areas this year and beyond: labor and the associated rising costs, a differentiated customer experience, data insights and a core technology platform to enable growth.
Labor costs: Retail continues undergoing a severe labor shortage, which affects costs, operations, customer experience — you name it. The U.S. Bureau of Labor Statistics, which estimates approximately 965,000 unfulfilled jobs in retail, indicates the labor shortage will likely last into the fall.
A perfect storm continues brewing for retailers: They want pre-pandemic hours of operation. Yet, the lack of labor, coupled with increasing costs of labor make it difficult to keep the doors open and create in-store customer experiences necessary to thrive.
Retailers need to take this increased cost into account and plan accordingly, even if it may mean redistributing funds from other parts of their budget. As much as e-commerce has taken off over the last few years, employees are and will continue to be the face of many retail brands.
Differentiated customer experience: Although customer experience has been and continues to be vital in retail, the pandemic shifted consumers’ brand preferences. Think about it: Customer loyalty changed from “this is my preferred store” to “this store has the paper goods my family needs.” All of a sudden, loyalty to a specific brand took a hiatus.
Today’s consumers want retailers to lure them back by creating personalized experiences, such as discounts on brands and items they prefer or push notifications while they’re shopping in-store. Modern consumers expect retailers to know more about them based on their shopping patterns and preferences. And the key to hitting the mark? Data.
Data collection and insights: Although it’s been said it’s the new oil, data in and of itself is just noise — a giant, untapped resource. Statista recently revealed the total amount of data created, captured, copied and consumed globally is poised to increase from 64.2 zettabytes in 2020 to 181 zettabytes in 2025. A zettabyte has 21 zeroes!
Retailers must not only collect data but make informed insights about it. Today’s successful brands, through technologies that include artificial intelligence and machine learning, apply customer analytics to discover, interpret and act on meaningful data insights.
Core technology platform: Modern retailers adopting a platform approach, like a core point-of-sale (POS) solution, will be the ones to integrate newer technologies and deploy new services into their stores more easily. Doing so will allow them to create personalized experiences. Additionally, having a core technology platform enables a seamless mixture of in-store and online shopping, like BOPIS, and/or allows retailers to accept payment methods that include cards, cash contactless and even digital currencies like bitcoin.
Riding Out the Retail Wave(s)
COVID-19 set off a tidal wave of change for retail. Some of the trends will stay, while others are likely to go. Online shopping, BOPIS, home delivery and contactless transactions are here to stay. Other things like plexiglass protective shields, appointments for shopping and closing down checkout lanes — actions that were implemented in the name of safety – are out or on their way out the door.
Moving forward, savvy retailers should focus on labor and finding ways to manage associated rising costs, differentiated customer experience, creating actionable insights from collected customer data and center growth around a core technology platform.
2020 is behind us. Regardless of how much shakeup and change we endured, the future of retail is bright.
David Wilkinson is president and general manager of NCR Retail.
We sat down with Michele Driscoll, VP of customer engagement, loyalty, personalization and promotions at CVS Health, to get a deeper look into one of the longest running loyalty programs in the drug store space, and the overall landscape of loyalty in today’s volatile environment.