What’s Next for Retail Once the Pandemic is Over?
COVID-19 has changed the way retailers do business now and into the future.
Today’s consumer essentially has three core demands: make my life easier, make my life better, and make my life more fulfilling. Retailers are responding to these consumer requirements with more urgency in the wake of COVID-19.
The pandemic-induced shift to much higher levels of direct-to-consumer (D-to-C) and e-commerce shopping behaviors has led retailers to take a consumer-centered view of their entire business, from supply chain and operations to content and marketing, and a technology ecosystem powered by real-time consumer data.
We believe an experience-led customer journey makes life easier for consumers, makes their lives better, and fulfills them on a deeper level to ultimately drive loyalty. Every touchpoint with the consumer should be looked at as a trust point. It’s an opportunity to go beyond a transaction and provide value — to connect and build trust, a relationship and a stronger brand.
Retailers and brands have been given the permission to change. Now, what will they do with it?
You Need to Understand Your Consumer
The retail industry has always thrived on finding ways to get consumers in the door. E-commerce had grown in recent years, but it was never a priority for most traditional retailers. That all changed with the pandemic, when e-commerce suddenly became a lifeline for an industry that had no other way to reach its customers.
While the pandemic isn’t over, retail’s reliance on foot traffic as the primary driver of sales volume likely is. Rising in its place is a model founded on deep, enriching relationships at every step of the consumer journey. This strategy requires retailers to build a sophisticated understanding of the way consumers live, eat, shop, work and play — and use this knowledge to provide value in the right place at the right time and in a way that respects the consumer's data and their privacy.
Data is the fuel that powers a personalized and unified consumer experience in a world where every journey is different. Building on information captured in CRM (customer relationship management) databases and augmenting it with external sources of insights, retailers can develop a complete picture of the consumer — wants and needs, expectations and preferences — and use it to enrich the consumer’s life, provide value and build trust, and stand out in a highly competitive retail environment. Doing this the right way can make a retailer a valuable and indispensable part of a consumer’s life.
E-Commerce is Only One Piece to Building a Strong Consumer Experience
Successful retailers understand that e-commerce is just one part of the formula for building a lasting connection with consumers. The core question retailers must ask themselves first is not “What e-commerce investments do I need to make?” but rather “What consumer experiences do I want to offer?”
And it’s not just about being online; it’s about doing it right. Both e-commerce and stores play a role in the future of retail. Your supply chain, data, marketing and technology play a role. Successful retailers will create a connected journey that's relevant to their target consumer and reaches them where they are, whether that’s in-store, online, or in the parking lot for a curbside pickup.
Retailers also need to consider how near-term social needs will impact digital buying. Humans are inherently social creatures, and while the shift to online will likely remain, the desire for post-pandemic social interaction and validation may drive consumers back to stores, either temporarily or to seek something new and different. Evaluate each step of the journey and develop a plan to meet the needs of today while also providing a value proposition that encourages consumers to continue doing business with you tomorrow and beyond.
Build a Resilient Supply Chain
The last mile is a critical component of the consumer experience. A breakdown in fulfillment could sacrifice the entire relationship with the consumer, no matter how great every other part might be. An integrated, scalable supply chain and operating model that can consistently deliver on the brand promise across the consumer's journey will be another critical enabler of loyalty, advocacy and long-term value. Our own Future Consumer Index has shown that consumers have little patience, even during a pandemic, for shipping delays or the inability to deliver a product they need.
Retailers that invest in logistics to support e-commerce and develop a foolproof fulfillment strategy that likely involves their physical stores will find it easier to deliver a consistent experience to their consumer base that makes their customers’ lives easier, better and more fulfilling.
Jeff Orschell is the consumer retail leader at EY Americas, globally connected, multidisciplinary professional services organization.
Related story: The Future of Retail: Beyond the Pandemic
Jeff Orschell is EY Americas’ Retail and Global Account Leader. EY provides consulting, assurance, tax and transaction services that help solve our client's toughest challenges and build a better working world for all.