Every rule in the book of retail businesses has been challenged as companies are navigating through COVID-19. Being closer to the customers, a flurry of investments in building a robust technology infrastructure, driving agility in supply chains and investing in moving online have all become an integral part of the new playbook for survival.
Retailers are regaining trust and confidence in the consumers’ minds today. Hence it is imperative that they focus on long-term sustainable growth and continuity of their businesses. Here is an outline of some aspects which retailers could consider –
Adopting Hyperlocal: An increasing impetus on localisation is the new standard. With respect to order fulfilment, we have seen tie-ups between retailers and delivery partners gaining ground. This is likely to continue in the future as well since home will continue to be the hub. Hence, we could expect retailers to focus on last-mile delivery closures while going hyper-local.
New age Phy-Digital: The new age consumer is one who is digitally savvy and has embraced the new online ways of shopping with ease. Whilst in-store retail could continue to be relevant, especially for high-value product categories, online will continue to play a key role as it is important for retailers to fulfil shoppers demands by being present across omnichannel touchpoints.
Leveraging digital technologies to the maximum: Contact-less payments, tech-enabled customer service, virtual consultations, curbside pickups etc. being some of the best practices that are being adopted in the retail space. Analytics will play an important role in understanding and predicting consumer behaviour.
Agile Supply Chain and back-end infrastructure: Retailers will need to modify their supply chains and develop capacities to plan and enable the logistics to meet the fluctuations in demand. The situation calls for extra safety precautions in the manufacturing lines, procurement and production operations. Further, it is extremely important for the back-end infrastructure to operate seamlessly with the front-end activities.
Staying close to customers: Shoring-up customer relationship and maintaining brand loyalty becomes extremely imperative in such a situation.
Experiential retail: In order to enhance customer experience and improve operational efficiency, new technologies will become a priority for most retail businesses. For e.g. the immersive nature of Artificial Intelligence (AI) and Machine Learning (ML) augmented the supply chain mechanism in the new reality thereby helping firms predict consumer demand and ensuring in-time sourcing. From deploying in-store interactivity to usage of conversational chatbots, AR/VR led customer experiences, all in all, new ways were constantly being pioneered by retailers to touch base with customers.
Gearing up for sustainable growth: Re-imagining, Re-inventing, and Reaching out, all drove the decision-making process in the new normal, as businesses weighed their options around cost optimization, product rationalization, cyber security, and other innovative ways of incorporating tech for sustainable business growth.
This is a time of deep reflection for the retail sector. Over the next 5–10 years, we expect to see business models emerge keeping in mind the future ‘consumer commerce’ landscape. Retailers recognize that they will need to go further with optimizing their costs if they hope to return their businesses to profitable growth in the years ahead. Traditional retailers will have to compete against businesses with deep capabilities in data, technology, and supply chain in the coming times.
The pandemic has in many ways, allowed businesses to lay down a roadmap for continuity and sustainable growth. As retailers have started to evaluate the future of retail, important conclusions had to be made around approaches - whether to continue with a half-baked omnichannel route or a holistic integrated one, whether to go for an offline store expansion or online integration, whether to curtail new product categories or to introduce fresh ones. Choosing between owning, building or partnering became a consideration point as companies prepared for transition.
Going forward, retailers across the world, especially the brick and mortar ones will have to borrow best practices from each other and get back up on their feet. The challenges that retailers are facing will force the businesses and the business owners to be flexible and agile enough to incorporate changes in their behaviour, operations and management, in order to evolve for the better.