During the 2020 Covid-19 coronavirus pandemic, online sales have sky-rocketed by a third while the high street has been left in jeopardy. As consumers have turned to online retail, brick and mortar retailers have been forced to adapt and leverage new technologies such as AR, VR, automation, and AI to keep up with fierce online competition.
For a successful 2021, retailers need to pay close attention to the trends that will become prominent throughout this year. Product data and management technology company Akeneo country manager of UK & Ireland James Barlow tells Retail Insight Network how businesses should be adapting to new digital strategies to survive in the changing retail climate.
Consolidation of digitally native brands with incumbent retailers
Stores like Debenhams, Topshop, and Topman – who once dominated the UK high street – had to face the consequences of the pandemic. Their failure to grasp multichannel strategies and reach younger audiences has ultimately been their downfall. For instance, leading online fashion retailer Boohoo acquired the digital assets of Debenhams for £55 million, causing the permanent closure of 124 stores with 12,000 jobs at risk.
The news marked the changing of the guard in retail, especially considering how the once dominant high street is gradually shrinking. Without an effective online strategy, we will continue to see further digitally native brands acquiring traditional retailers if they don’t act quickly.
This doesn’t necessarily mean that the future of retail will be 100% e-commerce, as there is still a huge appetite from consumers to interact with brands and products in physical forms. For example, brands and retailers can combine e-commerce with physical activations by offering click-and-collect services and personalised delivery slots that fit around the customer.
Now is the time to invest heavily in the omnichannel strategy to better integrate the online and offline interactions and improve customer experience.
Acceleration of e-commerce with challenges
The role that e-commerce plays has become a staple in our everyday lives. Major players such as Amazon, Alibaba and Walmart are leading the charge in online retail. With the absence of brick and mortar retail in 2020, e-commerce sales grew 36% year on year, the highest annual growth since 2007.
Despite the widespread adoption of digital, operating online isn’t always plain sailing. With resources stretched, retailers often face challenges when the wrong procedures are put in place. Elements such as the supply chain are reeling from the effects of the Covid-19 pandemic and Brexit, as consumers have turned to online shopping in droves for food and grocery deliveries.
This has put a strain on retailers who have a duty to supply goods quickly and safely. To overcome supply chain challenges that may arise, there needs to be continuous end-to-end assessment and monitoring to ensure minimal disruption as well as a quick response to meet customer demand.
Retailers also need to face that customers put greater emphasis on brand values such as sustainability, inclusion, and diversity. The modern-day shopper is much more inclined to reject a product if the company’s overall ethos doesn’t align with the consumer’s underlying moral compass.
Further, retailers have struggled to keep up with the pace of the omnichannel experience during the pandemic. Brands and retailers need to have a centralised system in place to manage all their product information and allow complete governance of internal processes.
In order to offer a unique customer experience across all channels, putting a Product Information Management (PIM) solution in place will help to manage large product inventories and produce compelling content for customers. Implementing a PIM has proven to provide a 20-50% increase in conversion, contributing to a significant increase in profitability, revenue and overall success.
The social commerce takeover
Social commerce has already started to take the market by storm, as platforms across the board have expanded their shopping features making it easier than ever to purchase items. This year, it’s predicted that the global social commerce market will have increased by 34% since its inception in 2015.
Social media platforms such as Facebook, Google, Snapchat and TikTok have all implemented virtual brand marketplaces to allow businesses to promote and sell their products and services with ease.
In addition to this, social commerce has played a particularly prominent role during the pandemic, due to forced closure of non-essential brick-and-mortar stores. Meanwhile, many small businesses and start-ups turned their social media pages into digital storefronts, saving money and resources setting up their own website to reach consumers.
This year will be no different for the world of social shopping. Sales will continue to grow as social networks introduce innovative features for different audiences. More businesses will emerge, making it more challenging for different players to rise above the noise. To make your brand stand out, you’re going to have to get personal.
Targeted offers, tailored experiences and interactivity will all become an essential part of the online customer journey. The recent acquisition of the Debenhams brand’s e-commerce and digital assets is cementing this change, in fact it’s a testament to the direction that retail is headed.
Despite the challenges that have been brought to light by the pandemic, retailers have shown resilience and determination in their responses. They’ve reached new heights to meet the shifting buying habits of their customers, pivoting their offering and taken risks.
Retailers must embrace the omnichannel
In order to navigate in the changing retail climate, retailers will have to embrace omnichannel. Omnichannel has and will continue to open up new opportunities for small businesses, who would have previously been shut out by the retail giants.
Using a unified brand experience across multiple platforms, small businesses can offer convenient avenues for their customer base to shop.
The effects of the pandemic are likely to last throughout the year, so for now online will be a priority. Once it’s safe to do so, shoppers will return in person as there is still desire for in-store experiences. Until then, retailers need to be willing to diversify their business models to reach new markets and prepare for the post-pandemic retail landscape.