Retail was struggling before COVID-19 hit. Over the past couple of years, there have been almost daily reports of stores closing and retailers going bankrupt. CNN Business reported that more than 9,300 stores closed in 2019 and MoneyWise reported that more than 6,600 stores have closed so far in 2020 with predicted shut downs reaching as many as 25,000.
What COVID-19 has done is accelerate the pace and number of store closings for already struggling retailers. Stores without a strong online presence saw their revenues eroded by retailers with robust online capabilities.
Retailers unable to respond effectively to customers’ needs with relevant, personalized experiences failed. As Steve Dennis puts it, “the boring and unremarkable middle has been collapsing for some time”.
In addition, the US is overstored, with an estimated 23.5 square feet of retail for every American, as compared with 16.4 in Canada, 4.6 in the U.K. and 3.8 in France, according to financial services firm Cowen.
While several retailers did not survive in the face of these challenging circumstances, many others are doing well.
Rather than calling this period a ‘retail apocalypse’, it may be more accurate to talk about a ‘retail transformation’.
Retailers that understand their customers and respond to their changing needs with innovative, relevant experiences across customers physical digital journeys will continue to thrive. Some innovative examples of how retailers are leveraging technology and data-driven insights to deliver greater value to their customers include:
- 7-Eleven delivers to wherever their customers are. Their ‘7NOW Pins’ delivery service allows customers to order food, beverages and household, and have them delivered to a range of nearby ‘pins’ located in places like parks, beaches and entertainment venues. The locations often not normally served by online delivery are places where people congregate and that means the opportunity to sell to a broader range of customers.
- Foxtrot, a chain of Chicago-based convenience stores, uses data in an innovative and pragmatic way. It offers 1-hour delivery to local customers in certain areas and uses the data from their orders to inform what it stocks within its local stores. Not only does this approach help Foxtrot improve stock efficiency and decreases waste, it also informs the services they offer. Based on data-driven insights, they can predict trends and what customers are likely to want, stocking local products to help each store be more responsive to their customers’ unique needs.
- The cosmetic retailer, Lush, well-known for being one of the most ethical, green companies in the world is offering products without any packing- a first for a major cosmetics brand. Lush uses its Lush Lens app in physical stores so customers can point their phone at a product and the app will recognize it and provide information on its use, ingredients and other useful content. It’s an innovative way to minimize waste, while still providing customers with what they need to make an informed decision.
What do successful retailers have in common?
They have expanded their digital and in-store offerings in response to customers needs for convenience, safety, and values like sustainability.
They’ve met customers where they are. They have found ways to offer more online services and in-person interactions that focus on providing more value.
They are responding to the COVID-19 crisis by offering safe shopping experiences such as curb-side pickup, delivery services, expanded online services and touchless payment.
They are agile and can pivot quickly in a crisis by leveraging new technologies and using data-driven insights to innovate and deliver relevant, memorable experiences that keep customers coming back again and again.
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