A Retail Challenge

By Tanya Long, Chief Operating Officer, Argility Technology Group.

The virus is reshaping the consumer goods industry in real-time, rapidly accelerating long-term underlying trends in the space of mere weeks and months.

Let me begin by saying that like many of you, I’m feeling a tad COVID’d out. The retail sector must be so tired of reading about what to do to survive COVID-19: go online, be more diverse, etc.

What has struck me in the past three to four weeks is the need to endorse a spirit of hope. I feel many of us are tired of looking to essentials and are seeking to look to the future for ways to spoil ourselves – maybe poring over travel brochures, or splurges on non-essential leisure goods as opposed to necessities.

It is just five months since the World Health Organisation declared the COVID-19 outbreak a global pandemic, which in turn has impacted every country on earth and hailed an era of uncertainty on both the economic and social fronts.

The retail and hospitality sectors took the brunt of the initial shutdowns. The retail sector has always been one of the biggest barometers of change – due to the adapt, or die, competitive aspect of this arena.

The closure of many brick-and-mortar outlets in favour of online offerings is just one example of how consumer purchasing patterns are changing the entire fabric of the industry. Therefore, retail has always had to evolve and to do it rapidly.

Consumer behaviour has changed dramatically, posing challenges for retailers that need to keep pace with the change or risk loss of trade and/or customer loyalty simply because they have not anticipated or made hasty preparations to satisfy new consumer demands.

I decided to do some homework and see what research surveys are revealing on this topic.

Research by Bazaarvoice − which boasts a network of over 6 200 brand and retail sites as its client base − reveals high demand for leisure goods during lockdown and not just basic necessities. It analysed different patterns and changes in behaviour, from increases and decreases in product page views, to orders placed, reviews submitted and questions asked. It reviewed this data globally across more than 20 product categories and compared it to the same period in 2019, as well as the earlier months in 2020.

People are responding in a variety of ways that are being manifested in behaviours and purchasing patterns, as they attempt to get to grips with a new normal.

Results reveal how people were shopping in March 2020 at the beginning of the lockdown and showed that customers started to really embrace online shopping, setting themselves up for what appeared to hail a long period spent at home.

The statistics showed a 21% increase in online orders in March 2020 versus March 2019, and in a survey conducted with over 3 000 members of the Influenster community, 41% of respondents said they were currently shopping online for things they would normally shop for in-store.

This would seem to confirm we are having to change our normal shopping habits and look to purchase more items online than normal. A comparison between March 2020 and the same period in 2019 saw a 25% increase in page views. This is said to be possibly because consumers must now search for new products because they are housebound. It is also possible they are purchasing brands they are not familiar with due to anticipated limited product availability.

An Accenture report notes COVID-19 will permanently change consumer behaviour, attitudes and purchasing habits, and predicts many of these new ways will remain even in post-pandemic times.

This survey reports that while purchases are currently centred on the most basic needs, people are shopping more consciously, embracing digital commerce and buying local. This latter trend, if reflected in the South African market, could be good for business here.

The report also notes that to manage isolation, consumers are using digital to connect, learn and play, and anticipates they will continue to do so.

One pattern reportedly being endorsed across the globe is the move to a virtual workforce as more people work from home and are enjoying doing so.

Consumers view products through changed eyes

So, in so far as we are all now living differently, buying differently and in many ways thinking differently – the pandemic’s economic and social impacts have been immense. Patterns include supply chain disruption and retailers closing their physical doors only to strengthen their online presence.

The virus is said to be reshaping the consumer goods industry in real-time, rapidly accelerating long-term underlying trends in the space of mere weeks and months. Accenture research is indicating that new habits formed now will endure beyond the crisis, permanently changing what we value, how and where we shop, and how we live and work.

Perhaps the next question in the evolution of retail specifically is for the sector to determine what consumer goods businesses should offer if they are to be prepared for what comes next.

Fear certainly fuelled the initial panic buying of staple goods – hence the shortages of items like toilet paper that ended up leading the social media memes.

Obviously, consumers are deeply concerned about the impact of COVID-19, from all perspectives, be it health, economic, continued availability of necessity goods, etc.

People are responding in a variety of ways that are being manifested in behaviours and purchasing patterns, as they attempt to get to grips with a new normal.

It is likely there will be a greater reliance on retail technologies incorporating artificial intelligence and machine learning capabilities, becoming the order of the day as companies attempt to familiarise themselves with their consumers’ reactions and develop personalised strategies to cope and retain the trade.

Albeit the days of one size fits all marketing have long been over – the need for strategies that reach out and capture the attention of this new complex consumer is now greater than ever.

* In my second Industry Insight in this series of two, I will have a look at what may be new and everlasting shopping habits.

For more information contact our Business Consultants on 011 712 1300, email info@argility.com or visit our website, www.argility.com

Source: IT Web