COVID-19 is decimating entire industries, crippling businesses, and crushing any economic growth that many countries have managed to increase since the 2008 recession. A visit to the average city shows rows and rows of shops boarded up with many other businesses on the brink of bankruptcy. On the other had, some retail giants such as Walmart, Target, Amazon, and Kohl’s have actually managed to grown significantly in the wake of the pandemic.
In response to the COVID, consumers are doing most of their shopping online, and retail stores are deploying a series of delivery options that are designed to keep both retail workers and consumers safe. Retails that have learned and adapted to these changes quickly have benefitted from tremendous growth in the last year.
For example, Home Depot reported an 80% increase, Lowe’s a 106% increase, and Dick’s Sporting Goods saw their eCommerce sales volume go up 90% in the 3rd quarter of 2020.
This leads us to the all-important question: How did some retailers succeed in the wake of the pandemic while others closed their doors? What does this mean for the retail industry and how has it affected retail brands here in the US? How are some retail brands managing to break even and even record profits in the middle of all the chaos while others are shuttering hundreds of outlets or filing for bankruptcy?
In Q3 of 2020, eCommerce sales went up 80% at Home Depot, 106% at Lowe's, and 90% at Dick's sporting Goods.
Most high-performing retail brands have adopted certain processes that have helped them enjoy tremendous growth. Retail brands looking for ideas on how to thrive or grow can borrow some of these ideas and use this exposé to their advantage. Let’s explore these, shall we?
Major Behavioral and In-Store Modifications
While many consumers are now ordering their groceries and supplies online, some buyers still prefer the familiar routine of going shopping at a physical retail store. To accommodate these buying habits, many retail stores have modified their physical stores’ layouts. For example, many retail stores, like Walmart, have implemented social distancing rules. This includes clearly marked lines 6ft apart at the checkout counter.
They have also mandated the provision of PPE, hand washing stands, or hand sanitizers to staff and shoppers. There’s also a “mask-on at all times” mandate for buyers within the store. Most retailers have also added a plexiglass barrier to protect cashiers. This minimizes the risk of exposure between buyers and cashiers. Others have implemented fewer checkout or pay points in spite of long lines to prevent crowding.
There’s also a limit to the number of customers inside the store at every point in time. Many stores are also considerate of the needs of veterans, the disabled, and the elderly. Therefore, they’ve allocated specific shopping times for people in these demographics. This way frail and vulnerable consumers risk less exposure and stress while shopping at these stores.
The Adoption of BOPIS and Curbside Solutions
For those who are inclined to buy their products online, retail stores have adopted or improved upon solutions like BOPIS (Buy Online, Pickup In-Store), curbside delivery, pickup points, and in-trunk deliveries. In fact, for many buyers, BOPIS is a major deciding factor – many even abandon their online carts once they find there’s no BOPIS option available.
83% of shoppers value convenience more than they did a few years ago.
Why do consumers like BOPIS? Well, convenience matters more than ever – even if consumers have to pay for it – and many are. In fact, reports show that 83% of shoppers value convenience more than they did a few years ago.
BOPIS provides shopping convenience, eliminates shipping fees, speeds up the pickup process, minimizes the risk of the buyer’s package being stolen, and guarantees that the buyer gets exactly what they ordered.
Shoppers also love and prefer BOPIS because of its added safety benefits. This is why BOPIS has become a favorite among shoppers, seeing a 400 percent growth rate in 2 years and now accounting for 40 percent of retail orders.
Even though customer satisfaction has always been a major concern for forward-thinking retailers like Dollar General, Nordstrom, Petco, Lowe’s, Walmart, and Home Depot, it has become even more important in the sense that keeping customers happy is crucial to their survival.
Providing BOPIS and other convenient solutions has been a key factor in accomplishing this.
Increased Innovation in Frictionless Retail Experiences
For many merchants, there is an increased emphasis on a streamlined, seamless checkout process. Buyers would prefer to buy online and select the BOPIS option when checking out instead of spending hours searching through the store for everything on their lists. When shoppers do decide to buy at the store, they want to be able to do so with as little personal risk as possible. In response, retailers like Target and Amazon have introduced contactless payment options as part of their frictionless retail checkout options.
In fact, Gen Z shoppers insist that a touchless payment option is a must-have for any merchant. This innovative solution makes the shopping experience seamless, cuts wait time to the barest minimum, and completely minimizes the risk of touching highly contaminated surfaces like POS devices.
The customer experience has benefitted in other areas too. Many retail brands have built up a robust retail inventory to match the agility of shoppers who are used to having an “unlimited number of digital aisles” to choose from.
While it took some adjusting on the part of both retailers and consumers, recent changes from COVID have increasingly removed shopping barriers that would have ordinarily discouraged buyers from shopping at their retail stores online and offline.
Focus on Using Artificial Intelligence (AI) and Machine Learning (ML)
Overwhelmingly, innovative solutions we’ve seen in the last year have been driven by artificial intelligence and machine learning technologies. Which is why major merchants are investing heavily. Amazon Go, which is a cashierless store is a great example of how AI tech is driving retail innovation. In fact, the Amazon Go store is so successful that Amazon has started selling the cashierless store tech to other retailers.
But that’s not all. AI and ML have birthed new integrative solutions such as chatbots, smart shelf tags, supply chain software, as well as technology for price adjustments and substitutions. All these factors contribute to an improved shopping experience, reduced inventory bloat, smooth shopping experience, and great customer service.
Final Thoughts
In the times of COVID, the retail industry is rapidly adapting and innovating as the need arises. One example is the recent rise in cross-training employees to create an agile, dynamic, and flexible workforce that allows employees to pivot and assume other job roles when necessary to meet customer demands. In addition, we’ve also seen a rise in one-stop shops, on the other hand, are where shoppers can get everything they need.
Changes such as these clearly point to a customer-centric approach that’s focused on convenience shopping. Retail businesses that do not adopt these holistic approaches are bound to be left behind by those willing to adapt.
The good news is, competing with other big brands might not be as hard as you may think. With the help of a few solid tools and time-saving solutions, you can be up and running in no time.
If you’re thinking of transitioning to or implementing these technologies, OX might be what you need. OX is an AI-powered augmented reality (AR) retail solution platform that uses machine learning technology to improve and enhance your retail operations.
We provide a plug-and-play platform that serves as a viable solution for everything from delayed orders, shipping, and supply chain issues to smooth inventory management, omnichannel order fulfillment, and everything else in-between. Our easy-to-use platform is designed to easily integrate with your current retail systems, thus eliminating the need for an entire system overhaul.
If you’d like to learn how Ox can help increase your team’s efficiency, get it touch:
