Anyone in retail now needs to be much more targeted and creative to motivate customers to spend at a time when global economies are sluggish and unpredictable.
It’s no real surprise that footfall to bricks and mortar stores is predicted to return to lower levels than what was seen before the pandemic took hold. This varies from country to country, but the diminished experience offered in-store due to the safety measures that have been put in place, and consumer concerns for personal health putting a significant number of shoppers off venturing in-store. In addition, the lockdown has encouraged consumers to re-think the shopping opportunities offered online. According to Forrester Research (2020) 50% of customers are shopping on digital channels for products they’ve never bought online before. Forrester Research also indicates that 90% of customers say their behaviors are different as they avoid physical stores, put discretionary shopping on hold, and buy exclusively online or as much as possible online. Clearly, the crisis has readjusted consumer purchasing habits beyond the short-term and now ecommerce is more important than ever to them.
Where does this leave brands and retailers, especially as we head into Peak? For brands already on the right path to digital transformation, the crisis has accelerated their need to create better ecommerce experiences and to make further investment in the right tech and supply chain ecosystem to support this. For brands and sectors that have been overly reliant on their in-store presence for both sales performance and brand building, this is a ‘make or break’ opportunity to completely rethink their approach.
In fact, anyone in retail now needs to be much more targeted and creative to motivate customers to spend at a time when global economies are sluggish and unpredictable. In the UK, the British Retail Consortium trade body said retail sales values rose by 3.4% in annual terms in June, which is a positive turnaround after the sharp 19.1% fall in spending recorded in April during the lockdown. However, expectations of a global recession and a rise in unemployment is predicted to impact consumer spending behavior.
Forward-looking companies need to consider implementing innovative strategies that provide them with a competitive edge. These might include shifting your Black Friday deals to different dates to get in ahead of other retailers. Or bundling online deals to replicate the way customers shop.
Customer spending is likely to be tighter so retailers may need to focus much more on providing unmissable value.
Retailers may well be eager to attract shoppers with some really good bargains, but this may mean that profits will be very low for key events like Black Friday. This makes it really important that retailers get creative with how they sell through stock which is either seasonal in nature or has a high stock level.
Good preparation is essential. Retailers need to make sure they have several plans in place ready to be activated when needed. Stores will be fighting for customers more than ever before so if your competitor has the same offer as you then you’ll need to differentiate quickly. These multiple promotional strategies should be designed so that they can leverage different discount values, bundling specific shopper segments, top of mind awareness etc.
Retailers also need to narrow their lens on how they review online performance - speed and agility will be essential. It is recommended to look at behavioural data based on a far shorter timeframe as this will be a really important lever for managing sales. Don’t use the traditional longer timeframes for assessing sales data as this will push products that were popular pre-sale and won’t be reactive enough to capture spikes in interest. Set your lens to a more reactive date range, where you can apply the previous day’s sales data and push products which are popular and on promotion.
E.g. If you have a TV that costs £2,000 and doesn’t sell that frequently, but when in a 50% off promotion, it will sell really quickly. You’ll want to look at the last 1 day of sales for that item and not the last 30 days so it will be pushed up to the top of the results.
And if you have any questions or would like more information on how we are assisting some of the world’s leading brands and retailers succeed in these challenging times, please feel free to contact me on firstname.lastname@example.org.