5 Points for Retail Industry to Regain Momentum Post Covid-19 Crisis
The alarming spread of the Covid-19 pandemic has wreaked unimaginable havoc, where the retail industry is bearing the brunt like never before. The unprecedented situation has compelled retailers to rethink their expansion strategies and make short-term plans instead to navigate through the crisis. Many of them now look toward digital channels to handle the dwindling sales.
According to the US Department of Commerce, retail sales plunged 8.7% in March as business closures impacted the demand for a variety of goods and reduced consumer spending to a record low in decades. The situation became worse in April 2020 as retail sales dropped by 16.4% from the previous month. Experts believe such trends may continue in the future with customers cutting down discretionary spending in the coming months.
As a retailer, you must remain flexible and anticipate permanent changes in consumer behavior. It is also important to prepare for increased traffic in the digital landscape. Consider these tips as you try not to reinvent, but rather re-adjust the steering wheel for the road ahead so your digital retail business stays on track.
- Expand the Digital Shelf:
With the help of engaging content and relevant product information, the digital shelf helps brands connect with consumers in a meaningful manner. It also offers a level playing field for brands that may not have a strong brick-and-mortar presence. Retailers must ensure that the digital shelf offers detailed information including the product description, technical specification, ratings and reviews, images and videos, product availability, pricing, and promotional offers. While the market demand for different products continues to fluctuate, a digital shelf offers the opportunity to put as many products on display as possible.
Digital platforms can help offer products that may be low on demand currently but may witness high demand in the future. For example, sales of electronics, luxury clothing, beauty and cosmetic products among several other categories may pick-up momentum once this global health crisis subsides and consumers return to their original lifestyle choices. Consumers may also be willing to invest in fitness wear and home-gym equipment, beauty, electronics, and home decor.
2. Omnichannel Strategy:
The omnichannel model allows brands to deliver a personalized experience via different channels and consumer touch-points. Players in the retail sector need to align their strategy with the demands of the digital consumer. Forced to stay indoors to prevent the spread of the coronavirus, the consumer now relies heavily on online channels to buy essentials such as groceries and medicines as well as non-essentials. Merchants need to streamline their delivery models to support the increased online orders and ensure a safe delivery experience.
Significant changes in buying behavior have also made it vital for brands to meet consumer demand via multiple channels. Along with e-commerce, consumers have shown increasing preference for new engagement models such as buy online and pick up in-store (BOPIS). Likewise, with a striking increase in mobile app downloads, retailers must plan to leverage the mobile channel to engage customers.
3. Create a Sustainable PIM and eCommerce System for More Structured Selling:
A Product Information Management (PIM) system can help merchants disseminate product information consistently and efficiently. It manages product information in a single repository ,to sell products via several distribution channels such as websites, mobile apps, social platforms, native apps, digital marketplaces and affiliate networks, conversational interfaces (including VCAs, phones, chatbots and digital home devices), IoT (including wearables, smart homes and vehicles), Immersive experiences via augmented reality (AR) and virtual reality (VR), and of course In-store experiences,
Such a system can centrally manage a variety of data including product features, technical specifications, media files, emotional messaging, and inputs from various stakeholders. Accurate, organized product information helps customers understand what they are buying. In addition, it reduces product returns and disappointments. The PIM system acts as a single point of truth for all product information.. It is particularly useful for merchants selling a wide range of products with complex variations and attributes.
4. Build Strong Customer Relationships: In the current situation, it is important for retailers not to panic and use this time to prepare for new challenges. Retailers must stay in constant touch with customers to build lasting relationships. As a new-age retailer, you must set high standards for your brand and personalize your interaction with the customer. This will ensure that your customers stick with your brand.
Personalization on digital mediums can be achieved in several ways. Retailers can create customized offers, engage with customers on social media channels, or use chatbots and other customer-friendly tools to understand specific requirements. Social media channels, in particular, provide a useful way to engage customers and promote products and services in a subtle manner. Regular communication via emails can also go a long way in building strong relationships with customers. It can assure customers that brands value their association and understand the need to stay connected during this time.
5. Hit the Strategy Reset Button:
Retailers must do away with traditional ways of operating and realign their strategy with the changing market dynamics. In addition to technology, they must also induce creativity and sensitivity to address business problems in the digital landscape. An aggressive expansion plan may not be the best policy right now; a slow cautious step can go a long way.
Scenario planning can be a good starting point for retailers to prepare for the consequences of Covid-19 pandemic. In this process, retailers must review changes in consumer behavior and develop macroeconomic perspectives based on potential economic impact across key markets and categories. They can also assess competitor plans and review how they are positioned for the recovery process. Make baseline revenue projections and identify initiatives to build an operational starting point. Retailers must also set a strategic direction and identify performance improvement initiatives to lower costs and build new capabilities. For instance, they can make changes in the store operating model and adjust the operating hours and worker strength in accordance with the reduced traffic. Use this time to plan ahead and create opportunities
The current situation has made it imperative for retailers to create a safe and reliable space for customers. This means customers should be able to buy what they need and when they need it in a safe manner. To begin with, retailers must spend some time in trying to understand the current needs of customers and ensure those products are in stock. Next, they must leverage technology and focus on digital mediums to boost sales and overall engagement. Also, remember to send out a message to customers on your hygiene strategy. Follow all the best practices and you should be able to bounce back in business in no time. While recovery may take longer, retailers with a set plan and increasing focus on digital mediums are likely to emerge on top in the post-COVID-19 world.
The post has been published here.