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Retail and Technology: What Direction Is It Moving?

In the age of the COVID-19 pandemic aftermath, many retailers have either closed shop or have completely pivoted the way they do business. On a small scale, yoga studios and gyms started offering online classes. Musicians started going live on Facebook for tips. And on a bigger scale, technology became the glue that held many businesses together. Plus, it actually birthed new ways we’re offering retail services today. The question remains: how does an interactive brick-and-mortar keep customers engaged through a more digital experience? The answer: integrate AI technology and offer omnichannel marketing streams.

 

Dating pre-pandemic, we already saw technology start to shift the customer experience: online shopping was steadily on the rise. In 2019, 14% of global retail sales were e-commerce purchases, and that number is estimated to rise to 22% by 2023 (Big Commerce). Leading industries include clothing (59% of US shoppers purchased clothing between 2018 and 2019), with music & games, books, shoes, and consumer electronics coming close behind. Once the pandemic hit, simple things like going to the grocery store became a risk for many. A big number of stores faced closures or heavy layoffs, and online sales began to skyrocket. That, paired with low employment interest since the pandemic, has many retailers asking the question: how do we move forward?

Introducing: the Omnichannel Marketing strategy

The ways that retailers will survive is by thinking outside the box. Instead of offering only one method to buy – in person, at the store – many companies have adopted omnichannel marketing strategies and offered various ways to purchase: like buying online, picking up in-store, or presenting interactive delivery experiences.

A stunning 45% of retail survey respondents by Square and Atlantic Brand Partners said they added new channels to their business during the pandemic, and 80% say they plan to keep them (The Atlantic). Some examples of these new channels include a mobile app, pop-up space, or delivery services.

Let’s get something clear. What this means is not a complete shutdown of offline retail stores. For many businesses, keeping a brick-and-mortar is a must, but it must be reimagined. For example, some stores will stay as is, or some will turn into a ‘dark store’ – that is to become an urban hub that is closed to customers but acts as a packing and shipping hub for orders.

Ten senior executives from some of the largest North American retailers all agreed that having a physical presence was important. Plus, they’d seen significantly higher e-commerce growth in sales with a physical presence compared to those without a brick-and-mortar. (The Atlantic)

So, the new normal isn’t just all online: it’s the balance between online and offline to offer a holistic and complementary experience for the customer.

When reconfiguring stores, omnichannel retailers can choose from three main avenues of how to move forward. 1) Retain the current layout of the store with online pickup layered in. 2) Repurpose a portion of the floor layout for order pickup. Or 3) fully transform the space into a dark store (shipping service only).

Reimagining the Delivery Experience

Because delivery will become a bigger and more normal part of the retail experience, companies are getting creative about personalizing delivery and making it more streamlined. This involves giving more visibility and real-time updates to customers about exactly where their package is at any given moment to retain excitement about the purchase. Integrating AI technology informs customers about what’s going on. So they have assurance and momentum about their purchase is a must. Amazon used to be the only company that offered 1-2 day deliveries, but now other retailers are picking up the slack, as 45% of consumers expect their online orders to be delivered within 2 days (Forbes). By adopting the right technology, more and more companies have access to route optimization, resource planning, and machine learning capabilities that will enable them to offer seamless delivery experiences akin to Amazon. The key: prioritize customer preferences.

Making the Online Experience Quick and Seamless

When improving online efforts, such as e-commerce, social ads, apps, and more, the key is to make sure your page loads quickly and is uber-fast and seamless. Site speed, stability, and delivery times are all crucial factors in the purchasing process and return-customer decisions. For example, making the highest-selling products easy to find helps make sure the customer journey is more seamless. You also want to prioritize high-functioning landing pages and consistent marketing messages. Basically, make popular products easy to find and make the message, and online navigation, seamless.

Get Creative By Bringing the In-Store Experience Online

Because customers are deprived of the bright personalities of sales associates and seeing products in person, technology is keeping up by delivering online methods that are more and more personalized. Retailers show their creativity with this by replacing in-store experiences with virtual appointments. Sales associates can meet with customers via video conference or live streaming. This way they share exclusive experiential content with customers similar to in-person. An example of this is in China with the company Taobao Live, where they made it easier for brick-and-mortar retailers to join its live streaming channel platform, which led to a 719% increase in participating merchants in February of 2020, compared with the prior month.

But it doesn’t stop there. You must nurture and continue to communicate with the audiences you get online. Follow up with them and help them become loyal and repeat customers over time.

For clothing retailers, buying online can be a bit trickier. But with innovative technology, the online experience can be interactive and fun. Jewelry brand, Kendra Scott, is launching a new platform, Virtual Try-On, which uses augmented reality (AR), machine learning, and computer-vision techniques to help shoppers preview styles as they move as if they’re enjoying a complete retail experience from the comfort of home. Shopify, which allows shoppers to add 3D models to their product pages, found that conversion rates increased by 250% with the new feature.

Collaboration: a Win-Win

Does all of this new technology implementation (or store reconfiguration) sound daunting to do all on your own? Partner with other brands. Many retailers have chosen to partner with other brands to boost sales and bring more convenience to customers. Retailers can gain access to new capabilities and expand their brand reach to new leads. An example of this kind of partnership is the shoe brand DSW and grocer Hy-Vee. The two partnered up to offer products through the grocer’s extensive network of physical locations. A new locale, new eyes on your product, and an overall greater reach in places you may have never thought of before is the key to staying (more than) afloat.

Great customer service isn’t just about being pleasant across the counter or over the phone. It includes reading through how long your site takes to load and how fast your package delivers. Plus, how personalized your products are from the initial show to purchase. It takes a bit more creativity and a lot more technological development. Yet also, more ease when done in various ways. Creativity is the key to a thriving business.

Author : Demos Parneros

Demos Parneros is an experienced and innovative retail and e-commerce leader, helping Staples grow from a startup to a Fortune 100 company, serving as President of North American Retail and E-commerce businesses. He subsequently took on the role of CEO at Barnes & Noble, leading a focused transformation plan, which eventually led to the sale of the company. In addition to previously serving on several high-profile company boards, Demos now leads CityPark LLC, where he has invested in 15 companies, including several leading-edge retail tech startups.

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