The New Normal: What Can Retailers do to Stay Relevant Post-pandemic?
There were winners and losers during the pandemic. Now that we are slowly finding our new normal, retailers must follow the winners' footsteps in order to become successful themselves.
In the past two years, the covid-19 pandemic has affected store closures and the rapid migration to e-commerce, resulting in a permanent transformation of the retail industry. With things slowly returning to normal, the retail landscape appears to have changed, with some companies seeing big performance gains and others experiencing extreme losses.
“The retail industry outperformed many other sectors, with the average company delivering positive total returns to shareholders (TRS), but the trends that the pandemic amplified are accelerating an industry realignment that had started several years earlier.” – McKinsey & Company
Although consumers returned to physical retail stores during the pandemic, their in-person shopping behaviors and preferences have changed significantly.
Their preferences have changed due to the convenience of computers and smartphones. To remain competitive, retailers must understand and respond to these new behaviors. They must evaluate how they service their customers online and in-store and find opportunities to innovate.
With the merging of physical and digital worlds, physical spaces will need to adapt accordingly. As retailers establish their omnichannel strategy, they must consider how their physical spaces work in conjunction with it, along with the purpose they serve - whether marketing, customer acquisition, or other.
Many online retailers such as Amazon, are opening physical locations to attract and connect with customers, who are buying experiences more than products, and millennials are leading the charge.
But the question remains, how do retailers understand their customers and interact with them? What are the most effective strategies for retailers to engage with their customers in 2022?
There are many factors that come into play when answering these questions. Each retailer answers this question differently depending on its niche. However, there are many common transformations across all retailers, which we will discuss later in this blog.
It is important to note that many retailers have invested in cloud-based platforms since the beginning of the pandemic. Based on a study by IDC, Cloud-based platforms are the foundation for retail growth. By 2024, IDC analysts predict 30% of Fortune 2000 companies will deploy best practices across their omnichannel environments, driving demand for customer data platforms, omnichannel management, and customer service solutions.
IDC analysts estimate that 75% of retailers will fully integrate order and inventory data by 2025, thereby improving conversion by 10%, customers' satisfaction by 50%, and reducing service costs by 25%.
Based on the study done by IHL Group, below are a few common transformations between the outperformers in the retail industry
Outperformers have updated POS hardware and software
No retailer can operate without effective software. Many problems can occur due to outdated POS hardware and software, such as glitchy movements, freezes, lost or incorrect data, credit card reader malfunctions, etc. This leads to slow sales times and unsatisfied customers.
Outperformers make significant investments in IT and Digital Journey
The traditional retail business environment has been transformed by digital technologies. Retailers who have put off digital transformation and focused on their point-of-sales strategies are now finding that they need to play catch-up. Retailers are expected to spend an additional $25 billion on IT and digital transformation in 2022.
Outperformers believe in mobile and mobile self-checkout
An industry that has long been divided between online and offline competition; mobile devices are proving to be a viable solution for connecting the two. This will provide the most seamless, fluid shopper experience, and provide retailers with valuable feedback and contextual marketing opportunities.
Meet with us in Las Vegas at ShopTalk 2022
Accuvia Software Group is sponsoring ShopTalk 2022 in Las Vegas. We are excited to sit down with retailers and talk about all the changes and trends that are happening in the retail industry.