Our Perspective on the Lasting Impact of 2020 on the Retail Trade

January 07, 2021

Our Perspective on the Lasting Impact of 2020 on the Retail Trade

2020 is behind us, thank goodness! What lies ahead? We have seen fundamental changes in the personal habits of consumers, such as working from home, no daily commute, ordering lunch in the suburbs instead of in the city. Also, we saw a seismic acceleration in trends that were already presenting themselves to retailers; electronics payments, drive-through service, mobile ordering and delivery, app-driven loyalty and rewards programs (see our earlier post – Why Retail Incentives Are More Important Than Ever During the COVID-19 Era), were all growing in popularity prior to COVID-19, but the pandemic has made leveraging these mechanisms essential to survival.

Many of these dynamics intersect and overlap but we think there are three major buckets:

  1. The Safety of Staff and your Customer
  2. Accessibility is King
  3. Building Customer Trust and Loyalty

All these trends have been accelerated by the impact of COVID-19 and they will not disappear when COVID is behind us later this year. What follows are our thoughts on the lasting impacts and how you need to be thinking about taking advantage of these seismic shifts.

The Safety of Staff and Your Customer

The necessity of providing a safe environment for your staff and your customers will extend beyond COVID. The threat of a future outbreak of a Coronavirus, another virus, or bacterial infection, will hang over the valuation of retail businesses for years to come. Proactive retailers will start making plans for life beyond COVID by implementing safety measures such as:

  • Ongoing testing regime for staff
  • Employee training for health best practices
  • Exploring cost-effective safe-customer mechanisms such as thermal screening
  • Facilitating contactless transactions where-ever possible:
    • Drive-through
    • Curb-side Pickup
    • Mobile ordering and payments
    • An improved and profitable delivery experience
    • Removal of or improving the safety of self-serve kiosks

Retailers who are proactive about implementing best practices for providing a safe and healthy service environment will go a long way to reducing any further impact from health scares or government-imposed restrictions.

Accessibility is King

Service is a more critical component of your product than ever before. Enabling your current and future customers to avail themselves of your product in the safest, most timely and convenient way possible is paramount. Prior to the pandemic, mobile and online ordering were gaining traction due to convenience. COVID accelerated adoption by adding the benefit of reducing physical contact. Now that consumers are trained, they are not going back. With the dramatic increase in app and online ordering and payment, this trend is here to stay and consumers’ expectations for a clean and safe retail environment will not diminish any time soon.

How do you capitalize on this shift? Continuing to invest in your technology stack so that you can offer your customers the most personalized and friction free experience possible will be more critical than ever. Thinking about ways you can reinforce the key aspects of your brand through technology will become increasingly important as the value of instore experience diminishes. Think about how you can make it easier for customers to order via Siri and Alexa. You will need to improve your online service game – are you paying attention to mentions on twitter, Facebook, Instagram, and other social platforms?

Now is the time to be thinking about future store concepts that are built with convenience front and center. Facilitating fast delivery, drive-through, pickup windows, easy condiment selection, contactless payment, are all strategically critical future-planning considerations.

Building Trust and Loyalty

We all know that retailers who know their customers best and leverage that knowledge to meet and exceed customer expectations will be the winners. The warm instore welcome from staff and your signage might need to be augmented with a personalized mobile greeting when customers are ordering online or on app. A post-purchase thank-you backed by personalized rewards will be essential in continuing to build customer loyalty.

How do you extend your customer experience to online deliveries, especially if you are using a 3rd party? A good place to start is your packaging and any ride-along that you include. Do they maintain or enhance the brand experience you have developed over time?

With less physical interaction with customers, digital interactions will become increasingly important. Engaging your customers through mobile apps, social platforms, and electronic communications will be an increasingly critical skill if you are to grow and prosper. Data is still king, but profitably leveraging that data takes the right expertise and skills.

Loyalty programs are going to become more critical. Your existing customer base is the foundation on which you will build future success. We highly recommend making your loyalty program a strategic priority. Loyalty programs that offer valuable rewards will increase digital engagement with your customer, improving the richness of your data, putting you in a better position to continue to meet and exceed your customers’ expectations.

Another way you can embrace digital is by acknowledging and addressing online reviews, responding to customer comments or posts, personalized offers, remembering customer preferences, and proactively rewarding customers, are now more than just a marketing tactic, they are critical to building and maintaining you customer flywheel ( explained here).

We hope that some of the ideas and observations help you prepare for the new retail environment. Spindy app can help you leverage your reward dollars through gamification – it’s a perfect match for the times as Spindy is contactless, provides great insights into your customers behavior, and rewards customers during and post-purchase.

We extend our best wishes for a prosperous 2021!

Stephen Condon
@streamingguy

Contact spindy if you have questions or comments about this article.