The last month has been filled with unique challenges for every industry and sector – retail is no exception.
According to GlobalData, the impact of coronavirus will cut £12.6 billion from retail sales this year. In the UK, almost all stores have been closed with the exception of supermarkets. Online retail is of course booming, along with home delivery services.
Retail is one industry that’s had to weather its fair share of challenges. From the 2008 financial crash to the death of the high street, retailers are no strangers to innovation. However, the speed and global scale demanded in response to this global pandemic is entirely new.
Only months ago, leading retailers were in fierce competition. And now, they’re working together. The UK government has relaxed some of its industry rules surrounding competition. DEFRA and the British Retail Consortium are advocating industry co-operation like never before. Iceland Food Warehouse Managing Director, Richard Walker says, “Retailers who are normally the deadliest of competitors have started talking freely to each other, sharing information and ideas, and standing shoulder to shoulder in a combined effort to feed the nation.”
Whilst the COVID-19 outbreak is a truly frightening situation, it also presents an opportunity for retailers to overhaul their offering. From shoring up supply chains to shaping omnichannel experiences, we may be getting a glimpse into what the future of retail will look like.
Although retailers’ physical presence is currently on hold, retail organisations have time to consider how this connects to their virtual counterparts. A strong digital experience will give customers the chance to serve themselves in a way that works for them. This includes suggesting items based on customers’ purchase history, showing the product on a model that looks like them (whatever size that may be, as done by Very), and a myriad of payment options. It’s essential that consumers can tailor every step of their retail journey.
With many people having lost their jobs or being on reduced income, payment options are particularly important. Beyond credit or debit, many retailers are offering instalment payments through the likes of Klarna. They can pay off items over the next six weeks or even two years – the choice is theirs.
For the next generation of consumers, your online channel will kickstart their physical retail experience. When stores open again, it will be important to ensure that consumers’ experience feels holistic and seamless. That means implementing the technology to unite experiences across physical stores, on mobile apps and websites. This makes the retail experience memorable and accessible for all consumers, whatever their needs and preferences.
Emerging Technology Bolsters Supply Chains
Unsurprisingly, technology is at the heart of a seamless retail experience. 66% of organisations use at least one emerging technology, including AI, VR, AR, and IoT, according to a recent survey.
US company, Gather AI uses drones to take inventory. The drones use computer vision to fly themselves, and cameras for localisation. They then detect and read barcodes and can even take the temperature of inventory to monitor if stock has gone off. Gather AI Co-founder, Sankalp Arora said “On average, this takes around 4.4 seconds per pallet location. [The drones] are 3 to 8 times faster than doing manual inventory.”
Similarly, Snap2Insight uses AI image recognition that converts photos of shelves into actionable alerts. This lets staff know when they are out of stock or if stock is in the wrong place. Praveen Gopalakrishnan, Snap2Insight Co-founder and CEO says, “What we have seen by talking to retailers and brands is that the store and shelf is the one place that they don’t have data on. They have a good supply chain, but once it gets in the store, they don’t know what’s happening on the shelf.”
Amina Razvi, Executive Director of Sustainable Apparel Coalition says “I would really hope that people look at this and say, ‘It is actually critically important for us to understand our supply chain just as well as we understand the business…It’s actually the best time to figure out how to do this, so that you are looking at how you future-proof your business.”
There’s an opportunity for retailers to shift their supply chains with sustainability in mind. Many retailers have been hampered by factories across the world temporarily closing down. Retailers could explore whether there is an eco-friendlier way to produce and deliver their product that doesn’t rely upon supplies and staff across the globe. They may try to reduce their carbon emissions, create new processes that reduce their time to market, or source materials closer to home. Putting the time in now to make your supply chain more ethical will likely reward you further down the line as ethical sourcing, production and delivery become more important to consumers.
To survive this unexpected shift in consumer behaviour requires retailers to take an Agile and innovative approach to their physical and digital experiences. Keep a close eye not only on economic trends but consumers’ social values after this global pandemic. Will consumers shop in the same way? What’s important to them now? Where does your retail organisation fit into this new world? Only time will tell.