As we cautiously begin to step into 2021, gearing up to experience significant shifts in all walks of life, the ‘New normal’ will continue to play its significant role in life, work, entertainment and shopping. Industry sectors, especially retail, have already witnessed a paradigm shift in the Covid-19 year of 2020 and this game changing era will continue, going forward.
Innovative technologies, competitive environment, safety-driven measures, tech-enabled customers and their changing demands are key factors to be considered by retailers to remain relevant and competitive. Digital retail solutions not only help in acquiring new customers, but also help to serve the existing ones better. B2C startups in retail can increase operational efficiency, provide better customer experience and benefit from the reduction in operational costs with digitization.
The E-Commerce Retail or the B2C market is expected to be more than a $ 100 Bn opportunity by 2024, according to a whitepaper by global professional services firm Alvarez & Marsal (A&M) India and CII Institute of Logistics, with online retail penetration expected to reach around 6% in India. The growth will be seen in electronics, groceries, pharmacy, cosmetics and furniture among others, with small towns contributing significantly to e-commerce in the coming years.
Few key trends that will redefine the retail industry in 2021 have to be closely looked at to develop retail strategies for favourable business outcomes.
Embracing Omnichannel Technology No Longer An Option
The already digital-savvy customer just needed the pandemic to adopt technology extensively for a majority of purchases. Customers demand access to brands anytime, anywhere, on any device to shop, which the omnichannel platforms provide. With omnichannel technology, retailers are engaging consumers more effectively and providing seamless customer experience across channels – brick and mortar stores, online, phone and social media.
By default, retailers will have an omnichannel strategy in place, so they can have a competitive edge and serve customer’s frequently changing demands while providing a unified shopping experience. It will bring flexibility into the business model of the retailers and creating a unified look and feel across channels making it immediately recognizable for customers. The entire retail and payment ecosystems will be integrated as well, to deliver a real omnichannel experience.
Personalized Shopping To Resonate Better With Customers
With constantly changing lifestyles and aspirations of the population, the customer-engagement approach has to be further re-defined by the retailer, for a successful relationship. Personalized experience while shopping makes customers happy and comfortable, encouraging them to buy more than they had originally planned. Tools and systems track customers across channels and monitor the nature of products they source, by ‘getting into their mind’. Natural Language Processing (NLP), Machine Learning (ML) and other technologies can process huge amounts of unstructured consumer data.
The data generated can be mapped in creating the desired experience for customers through innovation leveraging AR/VR technologies, towards hyper-personalization. Virtual AR fitting rooms and try-ons will reduce the number of returns post sales. Personalized promotions can be designed to draw customers from both online and physical store data with product-recommendations, resulting in better personal interactions, higher sales and brand loyalty. There will be a massive shift towards experiential retail, providing immersive shopping experiences.
Retail Analytics To Be Deployed By Businesses Of All Sizes
According to data from Research and Markets, the retail analytics market is set to grow at a revised CAGR of 8.8% during 2020-2027 due to Covid-19. Retail data and its analysis will support in managing inventory and planning besides accurately understanding customer requirements. The data collected by retailers will start producing results only upon interpreting it for business insights by investing in and leveraging retail analytics solutions. Big data is extensively used in the process.
Predictive analytics using AI is helpful for sellers to stock goods in warehouses closer to the bulk of the demand for faster delivery and resource optimization. It will also be extensively used for demand forecasting, logistics and providing recommendations by transforming data into actionable insights.
FnP (Ferns N Petals), which pioneered the concept of flowers and gifts in India saw further increase in their online sales due to Covid-19. It became critical to understand user behaviour across channels for targeted marketing. BluePi implemented a holistic Custom Data Platform which provided personalized omnichannel communication and improved customer experience. The marketing effort was made more efficient with insights into customer behaviour. There was significant revenue increase through the ‘personalized’ marketing campaign.
‘Bricks And Clicks’ Will Be The New Success Mantra
Social distancing due to the pandemic has led to contact-less and digital shopping, with touch-free technology no longer being an option. Physical stores are embracing digital transformation like never before with an increase in the number of phygital stores in future. AI and algorithms are being used for hands-free contactless payments, self-check kiosks and mobile check-out.
Traditional retailers will reimagine their functions by leveraging these new-age technologies. Video consultation to customers will go up as there is a higher impact on buying decisions when a salesperson is involved. Online or pure-play retailers will embrace physical store formats but with lesser space to create more of a fulfilment or experiential centre with fewer sales employees. The use of robotic store assistants will increase leading to safety and efficiency.
Last Mile Delivery 2.0, Set For Repackaging
The pandemic changed the nature of last-mile delivery itself, with companies under pressure to meet the growing demand for goods and this change seems to be permanent. Trust, reliability and convenience were key factors that played here. Both traditional and pure-play retailers will strive to delight customers with innovative delivery leaving a lasting impression to win-back customers.
Fast and free delivery along with tracking of goods facility with pre-delivery alerts for day of arrival will become a common trend. Smart sensors, blockchain tracking will contribute to better delivery speeds and efficiencies. Many retail outlets are already being converted into ‘dark stores’ or ‘fulfillment centres’ for delivery and pick-ups, as shoppers continue to leverage delivery services and curbside pick-ups.
The way retail was functioning has already changed and this transformation will continue in 2021 and beyond. The players in the sector have to be open to transform themselves with changing customer demands and embrace retail technology, which is getting more sophisticated to suit these ever-growing demands.