The pandemic has inflicted a harsh toll on retailers. As customers avoid stores, many retail segments have entered a hostile era of shrinking margins and fierce competition. A TCS cross-industry survey conducted in the early months of the crisis found that revenue had declined for 61% of the retailers polled. In the U.S., at least 29 major retailers have declared bankruptcy, including many iconic names. In this environment, only the nimblest and most technologically adept will prosper, I argue in the latest edition of TCS’s management journal, Perspectives.
In my article “The Digital Capabilities of the Most Resilient Retailers," I discuss the six digital capabilities that are crucial for retail success: an end-to-end digital customer experience; AI-based analytics that continuously improve the customer journey; cloud-based enterprise systems; highly automated core business processes; real-time visibility into the retail supply chain; and key partnerships in digital ecosystems.
I realize that many retailers may not be able to move on all six fronts simultaneously. As they juggle rethinking their digital strategy with managing cash flow, the big question for them is where to begin investing. I believe that post-COVID-19, there will be lasting changes in the way consumers shop. All will want a unified buying experience. That, of course, means the ability to buy online, pick it up in a store, or (if they can’t get to a store) have it delivered the next day, or increasingly the same day.
Retailers can deliver safe, unified retail experiences without eroding profitability. But it requires adopting an algorithmic and digital-first approach to their businesses. My TCS Perspectives article explores three ways to prepare for the post-pandemic marketplace:
- Delivering seamless customer experiences with unified commerce, contextual hyper personalization, and ‘phygital’ retail.
- Building cognitive supply chains with fluid networks, accelerated at the last mile of delivery by a human-robotic workforce.
- Transforming existing stores into stores of the future with experiential and contactless shopping, hyper-localized assortments, and micro fulfillment hubs with automated and intelligent store operations.
2020 was a crucible year marked by stories of resilience and lost opportunities. With a vaccine available and lessons learned on why investing in a flexible business model and technology foundation are non-negotiable for customer centricity and sustained growth, 2021 will be about vigilance and valor. Retailers that embrace a post-COVID world and cater in real time to the demands of consumers who want to shop online, in stores, or anywhere else in their shopping journey will be ready for a Retail Spring.