Reinventing Retail in 2021: Technology Innovation, CX and Analytics Will Drive the Market
The impact of the COVID-19 pandemic has been varied across industries, but the way it has shaken up the retail industry draws few parallels. Lockdowns and movement restrictions brought business in physical stores to a trickle and led to changes in buying patterns and consumer preferences almost overnight. Retailers that relied primarily on in-store experiences have now redefined their strategy to focus more on digital commerce.
Online shopping has boomed, with strict lockdowns and consumers choosing to remain indoors for safety reasons. FTI Consulting expects online retail sales to increase by 25 percent this year, nearly double of its previous estimate. It expects online retail sales to reach $748 billion in 2020, compared to $598 billion last year. McKinsey reports that most categories have seen more than 10 percent growth in their online customer base during the pandemic. Many consumers say they plan to continue shopping online even when brick-and-mortar stores reopen.
Even when consumers start visiting physical stores again, the experience will be different at least in the short run. Retailers will need to adhere to physical distancing and hygiene measures within their stores, and make appointment-based shopping and virtual queues available.
Changing Demands Fueled by COVID-19
The pandemic has also brought changes to consumers’ buying preferences. This generation is the first to witness a drastic change from abundance to scarcity in peacetime. It has led to higher awareness about sustainability among consumers and preference for brands associated with sustainability. Nearly 80 percent of respondents in a recent study by IBM and US-based National Retail Federation said sustainability is important to them.
The pandemic has seen consumers becoming more conscious of products related to health and wellness. Products that offer benefits including building immunity and supplements for mental wellness are seeing higher demand. Organic products are also flying off the shelf because of their natural properties. According to The Business Research Company, globally the organic food market will grow at a CAGR of 16.5 percent from 2021 and reach $366.5 billion in 2023, mainly due to consumers increasing their organic food intake to improve their immunity against COVID-19.
What do these ever-evolving consumer trends mean for retailers? How can they re-invent themselves to be more agile in how they respond to fast-changing consumer behaviors and buying patterns?
Staying Competitive Through Technology Adoption
Changing customer preference and the growing popularity of online selling has accelerated adoption of digital channels by retailers, whether it's to enable contactless payment, strengthen online presence, enhance customer experience, provide personalization or differentiate among peers.
Consumers may have moved their shopping online but when it comes to solving a problem they still prefer to talk to a human agent. This means retailers need to augment their omnichannel customer service and improve brand stickiness through a seamless experience. They also need to incorporate automation for contextual and intelligent interactions, and thereby enhance the overall buyer experience across channels. WNS’ omni-channel offering enables users to customize their requirements – giving them on-demand, personalized control to access products, services and support options. These solutions cover online merchandizing, digital marketing, rich-media (3D imaging, augmented reality and virtual reality), web analytics, fraud and risk monitoring, user-generated content moderation, and more.
The Customer Experience Will Be Upended – In a Good Way
With so much emphasis on how customers can expect to receive their products – either through online or buy-online-pickup-in-store (BOPIS) methods – one thing remains clear, and it’s that the customer’s needs will continue to be paramount in the coming year. Because the in-store experience has been completely changed for the everyday shopper, companies are looking to draw customers in through experiences or exclusive offerings so they can maintain those regular touchpoints, and provide amplified customer service.
Expect to see stores converted to fulfillment centers or for stores to offer more exclusive experiences to draw customers in. The focus for many retailers will be to maintain their current customer base and provide them with the needed support during challenging times for retail – especially around the holidays. This can include one-on-one sessions with employees, personalized gifting options, and more. Retailers who are able to re-imagine customer shopping journey and integrate their people, process and data to drive a personalized shopping experience will emerge as winners. WNS’ solution EXPIRIUS, a digitally integrated service model, leverages a human-assisted design to ensure that digital (technologies such as RPA, MI, AI and analytics) is at our core to simplify processes, deliver superior business outcomes and build customer trust.
A Focus on Business Continuity Planning and Resilience
Retailers and all types of businesses quickly discovered their Business Continuity Planning (BCP) was lacking as soon as the pandemic set in. With the world in a different state than it had ever been in, companies that showed agility and resilience by way of strong business continuity planning were more likely to survive. Now that we’ve seen just how drastically the world can change overnight, companies will not soon forget the lessons we’ve learned, and BCP and resiliency have become priorities for most organizations.
Businesses have targeted redundant processes and have found comfort in working remotely, which means companies will continue to reconfigure their working models to meet current workers’ needs. This will include even more adoption of tech-enabled platforms and advanced automation to reduce dependency on in-person workers.
While the pandemic exposed these shortcomings, it has also transformed the way businesses see themselves and their markets. Retailers found an untapped opportunity to minimize disruption risks by diversifying delivery and operational processes, and did so eagerly.
Reinforcement of Cybersecurity and Compliance
The onset of the pandemic illuminated just how unprepared many companies were to switch to a business model that operated entirely online. Not only did they have to shift employee management and communication online, but they also had to deal with the harsh realities of how their cybersecurity methods were lacking.
Hackers made quick work of infiltrating vulnerable businesses, leading business leaders to give greater attention to cybersecurity, compliance, and risk avoidance, which will continue in 2021 and beyond. Through 2023, 75 percent of technology providers plan to incorporate business outcome and risk avoidance metrics within their marketing programs and product offerings.
The pandemic showed the power of a short-term crisis and long-term slowdown, which will take time to recover from, a trend that will continue as economies grow and shrink over the years.
As inoculations against COVID-19 increase across countries and the world slowly pivots back to normal, retailers will need to adopt technology innovation at the heart of their business to remain competitive. The pandemic showed the power of globalization and technology — as we’re more connected than ever, businesses must adapt to that globalization, or face being left behind. Those challenges include being prepared for the unexpected and staying in tune with the latest technology and processes. Smart businesses are preparing now.
Keshav Murugesh is the Group CEO of WNS, a leading provider of global Business Process Management (BPM) services.