To say that retail has changed due to the ongoing coronavirus pandemic will be an understatement. The covid-19 pandemic has been a threat to the entire global economy. While several companies have already declared bankruptcy, there are many who would follow the same suit, unless financial activities start at the earliest.
The post lockdown era will see retailers and retail brands competing vigorously for attention. Eventually, survival and growth will depend on the strategies and proactive approaches.
But there is a bright side, amidst all the competition and losses in retail businesses.
According to a MomentFeed survey conducted on more than 1000 U.S adults, 82% of consumers visited online businesses during COVID-19 and 34% visited more than before the crisis. In contrast, only 45% of consumers visited brick and mortar businesses. Of those that visited, more than half say they visited less frequently than before COVID-19.
Here are some approaches that will be able to help the retailers :
Strong consumer brands should deliver simple messages addressing COVID-19 and social responsibility
Retailers should establish an emotional connection with consumers. This is a very critical time for both retailers and consumers, and an emotional connect will help retaining customers as well and acquiring new ones. According to Klarna, 33% consumers said intelligent, humorous or emotional advertising encourages them to visit a brand or retailer’s website or store. In contrast, consumers are being increasingly put off by traditional marketing solutions, with 49% saying they get irritated when brands get personalisation wrong, and 59% feel dissatisfied when they see targeted ads for items they’ve already looked at or purchased.
Keep an eye on customer wishlists
Some customers may not be proactively spending money at the moment. Instead they’re saving their wishlists to buy later or some may be just adding items to their carts just to window shop as a distraction. Retailers should identify customers who have saved items in specific categories or brands and let them know when the products are on sale, or feature these items in future messages. This helps pique their interest so that when they are ready to shop again, they have their favourite product upfront with attractive discounts on them.
Readjust Product Offerings
Due to resource limitation, the customers main focus is on purchasing essentials rather than splurging on luxuries. Therefore, every brand must target the essential product segment and come up with something that fits the description. Also they should think of widening their ‘Product Line’. By increasing their product line, customers will have multiple options to choose from, not only from the luxury section but also from the essentials section. This will help retailers offer what customers are actually looking for or are in need of. For example, let us take a brand that only deals in luxury furniture. This might be the time to shift focus towards functional workstations and regular household items that can help professionals work from home.
While this doesn’t mean diluting the brand identity, it just signifies finding a contingency plan to survive and make it big even during these challenging times.
Customers want to be engaged and acquired
Retailers should not become complacent with their customers, or they will likely go elsewhere. People are often loyal to brands they love, but would switch as soon as they like something else better. When finding new brands, price remains their priority, with flexible payment options. Retailers should specifically focus on increasing the omnichannel experience for their customers. For example, Walgreens has created an omni-channel pharmaceutical experience by using its mobile app as a primary tool for brand communications. Customers can use the app to check and refill prescriptions without having to call their pharmacy. They can also set up reminders that alert the customer if a prescription needs to be renewed.
Offer convenience on your website
A retailer’s website is their display window and their first impression for new visitors has to be perfect. They need to make sure that it’s easy to navigate, and contains the most important information they need upfront. They should plan accordingly for any spikes in digital channel usage to ensure that the systems will remain online if they experience an increase in demand.
Product alerts for 'Back in stock' items
Product alerts are a simple yet highly efficient way to notify customers about the essentials they need or the products they care about. Price drops and back in stock detection will allow retailers to quickly target customers who have interacted with specific products (viewed, carted, purchased or added to wish list) and give the customers a chance to buy that product.
Many retailers currently find online order fulfilment to be more expensive than their bricks and mortar offer, so this opportunity could cause further financial pain.
Retailers can take the following steps to reduce their costs:
- They can maximise the utilisation of their assets (example delivery vans, distribution centres, etc.) to reduce the cost while ensuring they can manage the additional demand.
- Where feasible, they can add capacity to ensure that customers aren’t forced to shop through competitors.
- They can identify which products are uneconomic to offer through online channels, and only offer those where it makes sense.
- Clearing out their inventory by giving discounts on brands which are affordable and economical. This way old inventory will be sold out making room for new ones.
‘New Essentials’ is the new trend
The priorities of shoppers have changed tremendously, moving towards shopping for essential items. This has led to a rapid shift from luxury shopping to essential shopping. People are now working from their homes (in fact, spending almost all their time at home), so these new essential items are those that come under the office supplies, health and fitness, beauty and cosmetics, housewares, home improvement, and toys and hobbies categories. Items that help one feel more comfortable at home. Here's an article that talks about the categories that are performing well, and those that aren't, in the current times.
Considering it to be the best time for selling, retailers should plan their discounts, sales and pricing very intelligently to gain maximum profit and recover from the losses which they might have faced earlier.