How to adapt your ecommerce and retail strategy for the new normal
In March 2020, retail sales plunged to the lowest rate ever. The decline was more than twice as bad as the previous record set in 1998. With around 40% of Canadian retailers closing their doors due to lockdown restrictions, sales tumbled by 10%, worse than the 4.5% drop in February 1998.
It is a grim statistic and almost every retailer was affected. But as we head for the “new normal”, retailers will have to adapt to the way consumer behaviour has changed. Physical stores have to make the unenviable decision of opening up again (or not). But all retailers will have to reconsider the way they engage with consumers – and not just in a safe socially distant way.
Ecommerce will be central to many of these decisions and consumer behaviour, but the challenge is that there is no script for this. Usually reliable forecasts have gone out the window, not just because it’s open to ensure good ventilation. Shopper behaviour will forever be altered by the first half of 2020 and will continue to change as the world adapts.
A year ago, putting together a go-to-market retail strategy was heavily reliant on historic experiences and benchmarking based on reliable data to make predictions. But the data is still being gathered for the current era - and changing every day - so what are shoppers thinking and what should retailers be more mindful of in these changing times?
A recent study done by Ipsos, the world’s third-largest market research company, released some interesting preliminary findings.
Unsurprisingly, Canadian consumers are still reacting to the financial impact that the COVID-19 pandemic has had on them.
Over a quarter have delayed or cancelled major purchases (28%). As a result, most consumers (61%) also agree that they are being more mindful about how much they spend, and nearly half (46%) are being more cautious by spending more time researching purchases online before buying them.
For retailers, this is vital as we head for the colder months and the holiday season, where we typically see nearly half of our annual revenues come to life.
Omnichannel is where it is at
The holidays will most likely be the most significant in terms of omnichannel sales for retailers. But it is ecommerce where the study predicts to see the biggest increase.
If your product is not accessible in a modern, optimized ecommerce experience, you are basically putting yourself into retail quarantine.
While more transactions being completed online is a no-brainer, it’s not the only thing likely to change. Even consumers willing to make trips to the store will spend far more time researching their in-store purchases – and in some cases relying on click-and-collect offers.
Ditto for using mobile search and retailer apps to make their shopping trips more efficient.
This also means that if a customer has an unpleasant experience in your physical store, they might pick up their mobile and see what is on offer elsewhere - and complete a purchase at a competitor while they’re still on your shop floor.
It’s not them, it’s you
Honesty and transparency have never been more important. While the study found that three-quarters (75%) of Canadians are making fewer trips to the store because of social distancing measures, it also found that almost half (48%) are worried about safety precautions taken by delivery companies. A further 34% are still impersonating squirrels and stockpiling food items and personal care products.
While you can’t do much about the stockpiling (unless you are a retailer in those verticals) you can do something about people’s concerns around safety. If the pandemic has taught anyone just one lesson it’s that communication has to be clear. You don’t need to be all extra with a medical essay about the steps you are taking to keep everyone safe - just be a human being. The same fears you have felt through these last six months are the fears everyone else shares. What would you like to hear as reassurance to take you from considering a purchase to completing a transaction?
No business as usual
In the new normal, there is no room for complacency. No matter how well-established you think your brand is, loyalty or familiarity is no longer the driving force behind a shopper’s decision making.
That’s good news for smaller brands who put customer service at the core of their ethos. If you fall in that category as a retailer, remember to consider the impact scaling your business might have on the very thing that brought people to you.
Another focus is on keeping things local.
Research by Retail Insider found that consumers are increasingly looking to back local retailers. The #SupportLocal hashtag emerged frequently — increasing by 60% in Canada from March to April.
Convenience is key
Almost half (46%) of Canadians surveyed by Ipsos said that convenience was the main driver of their decision to shop online with low shipping costs and avoiding the store and saving time both getting the nod from 37% of respondents.
For ecommerce retailers, delivery is far too often overlooked. Aside form easing concerns about the safety measures, retailers who scale too fast often find themselves hamstrung by the logistical challenges of delivery. Being able to deliver in a set timeframe can often be the difference between a consumer choosing your store over another. Be warned: hell hath no fury like a consumer with a late delivery.
The most surprising finding from the survey, though, is that just 14% of respondents said that having an online coupon was the driver behind their decision to opt for online. In a time where consumers are becoming financially frugal, this finding sticks out. Discounts for first-time buyers has often been the holy grail of tactics to lure new customers, but with so many options available – in this brave new world, you’ll have to do better than that.
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