This is the ideal moment for retailers to rip up the playbook and create change, argues UM’s Lawrence Dodds.
As shops up and down the UK start to open there is some sense of normality returning. But, with the CBI highlighting a lack of demand in the market, retailer confidence continues to be gloomy. John Lewis, a key high street player, has already indicated it may decide to permanently close 19 of its stores. The decision is not surprising, given 42% of consumers plan to spend less than they did before lockdown began (YouGov Data).
One thing is for certain: life for consumers has changed dramatically, and their priorities are different. In a world in which feelings of anxiety, fear and uncertainty are now so rife, it is more important than ever for brands to listen to their audiences and understand what they need. ‘Retail Darwinism’ has landed and responding to these emerging trends while future-proofing business models is crucial as we move into the new normal.
Rebuild confidence for now and next growth
For consumers, product safety is an emerging area of focus – and one that will be crucial in building long-term trust. Getting it right now will put brands in a stronger position for the next phase. Many will need to switch from usual attempts to steal share and focus on growing categories through increased consumer confidence. A more balanced approach to marketing will be vital.
At the initial stages of the pandemic, large supermarket chains were the first to step in and run messaging around the steps that had been taken to increase safety. More recently, we have seen similar messaging from McDonalds and Burger King – a direct response to the frame of mind in which consumers find themselves. Burger King really differentiated its approach, with tongue-in-cheek social distancing crowns and its onion-packed Social Distancing Whopper.
Barriers will be different depending on the type of retail outlet. For auto retailers, for example, there will be perception issues around test drive safety, whilst for fashion retailers a key focus will be navigating the trying on of clothes. Marketers should be in the process of conducting research to understand their challenges, and best support their customers at a time of unease.
User experience acceleration
The behaviour we see retailers embracing today will undoubtedly become a trend of tomorrow. Mixed reality technologies such as AR and VR offer potential solutions to deliver a better customer experience in categories that involve a high degree of contact.
AR software sits on almost all modern smartphones. A recent move by Apple to a include Lidar camera that will increase AR accuracy on the iPad Pro highlights the importance of the technology as a key component of user experience.
Social media has brought AR experiences into the lives of consumers, hence the decision of many brands to trial AR formats on social. Gucci is using an AR shoe 'try-on' filter to help consumers get as close to the full experience as possible. Expect to see mixed reality experiences embedded into the in-store experience to maintain sales while maximising hygiene.
Consumers will demand a more sustainable future
The environmental impact of commerce has been pushed to the fore as images of pollution-free rivers have been broadcast across social media and news websites.
It comes as no surprise that when consumers were surveyed on the importance of the reduction of single-use plastics, carbon footprints and corporate sustainability, 56% cited these issues as having become more important as a result of COVID-19.
By responding to this cultural and social shift, brands will see greater long-term loyalty. Retailers should look to increase pressure on suppliers to deliver products and services that have a clear sustainability USP. Eco-friendly packaging and charity-linked projects are clear ways to deliver in this area.
Expect convenience to become a key battleground as retailers look to explore routes to minimise employee customer contact and speed up the rate of transaction.
One thing is for sure: we are well on our way to becoming a cashless society, as all demographics look to reduce their reliance on coins that get handed from person to person. Making contactless payment as easy as possible is important but there is also an opportunity for retailers to incorporate in-store payment into their mobile apps. Not only will this technology improve CRM data, but it will also help consumers get around contactless card limits.
Carefully considering click-and-collect technology should be a priority for retailers as customers want to minimise time in store. Asda is about to launch a temperature controlled 'Intelligent Pod’ concept that allows customers to drive to an unmanned store. Parent company Walmart is already going further and trialling cashier-free stores such as the ones Amazon pioneered.
Statistics from YouGov suggest that 55% of the population believe that social distancing guidelines should be kept at two metres. This presents a problem for many bricks and mortar retail sites with space limitations. Government guidance will also keep changing in line with advice presenting a problem for businesses with signage.
To some extent, consumers have become used to following lines marking out where they should stand but this can only ever be a short-term solution. A longer-term opportunity we have yet to see exploited is significant physical change to store design. The conversation has so far been mostly limited to how offices, parks and homes will have to change post-COVID.
Retailers could look at hospitals for inspiration and use materials that have natural hygienic properties. Copper door handles have been in use throughout hospitals for years. It makes sense that UV lights used to sterilise hospital wards could sterilise sunglasses after each customer trials a pair. One South Korean coffee shop employed robot technology to distribute coffee to customers.
As of yet, we’re unsure exactly what the future holds. But, undoubtedly, we are going to see cosmic change across the retail sector – making this the ideal time for retailers to rip up the playbook and take action.