Contents of the book
Pre-pandemic view of the retail ecology
Technology-Ignore for a moment the future of retail because eCommerce is already gaining ground before COVID 19. Long before the pandemic was declared, online retail had already reached a high level of penetration and was on the rise, thanks to large investments in apps and digital tools that aim to reduce consumers’ need to engage with salespeople or try on each product.
Virtual try-on and 3D configuration technologies, for example, allow customers to co-create a personalised item and see how it would appear on them before making a purchase, simplifying the decision-making process and allowing them to buy whenever and from wherever they choose.
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Only 11 percent of respondents said they would not purchase for clothing online, according to Oliver Wayman, while 54 percent said they have done so before. In this scenario, e-shopping is expected to attain 20-25 percent penetration in the United States by 2024. Similarly, according to McKinsey data, 82 percent of US customers spent money online in the previous three months, and 42 percent of millennials prefer online purchasing to in-store shopping.
These are clear signs that eCommerce is gaining traction ahead of COVID 19 and has the potential to gradually replace physical stores, particularly among younger generations, as E-Marketer predicts that by 2023, e-commerce sales will account for 63 percent of total commerce sales, surpassing the $4 trillion mark.
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Adopting an omni-channel marketing approach appears to be required as well.
Furthermore, adopting an omni-channel marketing strategy appears to be necessary, as Forrester claims that consumers who buy luxury goods in both brick-and-mortar and online stores spend four times more, making brands more willing to invest in creating a seamless experience across multiple channels and touch points.
To summarise, in the future of retail, the digital and physical worlds must be linked.
Drew Green, CEO of INDOCHINO, the world’s largest made-to-measure suit maker, points out that online-only businesses have higher client acquisition expenses than those with physical shops, which can draw walk-ins or even become tourist destinations.
He also agrees that customers who use both online and offline channels make more purchases. “Our online sales grow twice as quickly in markets where we have a showroom as they do in markets where we don’t,” he said in an interview with CBC News Canada.
Indeed, according to retail expert Doug Stephens, brick-and-mortar stores should be judged not just on their sales, but also on their media value, because physical locations expose consumers to messages in a more controlled way.
Physical locations are incredibly valuable in omnichannel strategies, which are designed to cover every step of the customer journey and use to produce meaningful and memorable experiences that convert, as we noted in previous essay we wrote.
In this time of coronavirus, retail is fast moving digital.
The COVID-19 issue has accelerated the digitalization of retail, resulting in a large increase in the number of e-shoppers and a shift in their shopping habits.
According to CivicScience, before the coronavirus, just 11% of adults in the United States indicated that they had shopped for groceries more than usual in the first week of March; by March 22, that number had risen to 37%. Furthermore, total order volumes increased by 210 percent in the four days between March 12 and 15, compared to the same period last year.
While younger and more digitally savvy viewers are eager to hop on board, Generation X members appear to be more hesitant. Nonetheless, they have adapted and have expanded their media consumption as well as adjusted their spending habits.
According to study, in April 2020, 64 percent of people aged 35-54 years old and 51 percent of those aged 55 and up used Amazon to buy food and pantry items.
The need for omni-channel experiences has risen as well. According to Rakuten Intelligence, “click and collect” order volumes increased by 202 percent in March, April, and May, with an astounding 30 percent of purchases coming from first-time customers.
These needs are driving change and generating a very feasible scenario: customers are establishing new habits, and the shift is happening right now. This is why it is critical for brands to grasp opportunities and reevaluate their retail strategies.
Personalized, digitalized, linked, and automated retail is the way of the future.
An in-store experience that is both entertaining and memorable
One of the most widely held beliefs in the retail sector is that physical storefronts are becoming obsolete. Consumers’ shopping habits are being shaped by digital experiences. While experts speculate on how retail will evolve, one fact remains constant: physical stores are here to stay.
Brick-and-mortar retailers, according to Deloitte, are still vitally important and are expected to meet consumers’ increasingly high expectations. Excellent customer care given by highly-trained front-line workers, as well as the store’s ability to deliver a connected omni-channel shopping experience, such as receiving returns of online orders, are essential in this context.
The Retail Prophet, Doug Stephens, emphasises the importance of brick-and-mortar stores in creating sophisticated experiences rather than just selling items.
As a result, he emphasises the need of stores cultivating a service-oriented environment. For instance, a location where customers can collaborate on product development with the support of specialists and technology. Consumers may now bring their own creations to life and test them on utilising 3D Visualization and Augmented Reality technology.
Baume, the Richemont group’s newest brand, is introducing a fresh perspective to the watchmaking industry. We designed a 3D configuration tool, powered by 3D Visualization and Augmented Reality, to allow consumers to design their own ideal watch in 3D, picking from over 2,000 unique combinations for everything from straps to hands, dials, casing, and engraving.
Additionally, after configuring the product, customers may utilise NFC technology to see the design on their own wrists before placing an order. This, of course, leads to considerably higher conversion rates, as well as increased engagement and word-of-mouth.
Doug Stephens goes on to say that the stores shouldn’t be judged on sales because the major goal is to immerse customers in the brand storey and expose them to marketing messages and an aspirational lifestyle.
Professionals are beginning to comprehend the future of retail stores: an emotional centre of gravity for the brand meant to attract, engage, and loyalize consumers, so it won’t matter where purchases are made in the next several years.
The full-throttle omni-channel strategy
Even while direct-to-consumer platforms are more important than ever for the development of businesses, digitally native enterprises are wanting to create brick-and-mortar locations.
Suitsupply (125 locations), Warby Parker (116 stores), Alex and Ani (104 stores), Kendra Scott (95 stores), Peloton (83 stores), Untuckit (83 stores), Bonobos (61 stores), and Indochino (61 stores) are among the most brick-and-mortar digital brands, according to Forbes (56 stores).
Customers require consistent, authentic interactions both online and offline, which is why they are drawn to omni-channel. What customers look for in a brand is consistency in service, tone of voice, and approach, not the channel itself.
According to Deloitte, as retail evolves and omnichannel becomes the standard, supply chains must evolve as well to offer quick and flawless service. Because services are a key difference for omni-channel buyers, firms must provide quick delivery times, good customer service, and convenience.
Companies with traditional supply chains face an even greater demand for transformation as brands like Amazon continue to raise the bar for fast delivery. This means they must adopt a customer-centric approach to enable customers to identify and access the right products at the right time while ensuring quality and lower costs.
