How has the reality of retail changed in times of contingency?

Consumer demand for digital services has never been greater and although there has been talk of digital transformation for many years, many companies have made progress, but there are others that are completely analogous and require a drive to immerse themselves in digital environments and ecosystems.

 

While uncertainty and widespread fear are increasing in society, retail and mass consumer companies today more than ever are struggling to adapt, seeing a great opportunity in building optimized digital platforms.

Now is the time to adapt, move forward, restructure and digitize the way you interact with people and the channels through which you make your sales.

There is not enough clarity on how society will recover after this great change of behavior; of interaction with people and with brands. That is why we call on companies to remain competitive, open to digital ecosystems and to adapt to the new normality.

Cull
Photo: Cull

First, recognize that not only the consumer’s buying behavior has changed but also their preferences, intentions and moments of purchase. Nielsen research has revealed six thresholds of consumer behavior related to the impact of COVID-19 globally; starting with “proactive health buying,” “reactive health management” and “pantry preparations” as the first three levels. This is followed by “quarantine preparations” and “restricted living” behaviours, and finally by “return to normal living”.

These new patterns of behavior are a consequence of social distancing, which has led humans to interact differently with each other and with brands. Today there is an important use of technology to acquire products and food, communicate, establish relationships, work and study.

Second, to have a proactive communication based on transparency with customers. Now more than ever, communication is vital to keep customers informed about the steps the company has taken to stay on track and about new safety protocols in stores and with partners to increase trust.

Transparency in product information will become a necessity as a result of changes in the way consumers make purchasing decisions. In a new digital environment, knowing all the product specifications not only ensures faster and more efficient purchases, but also reduces the number of returns or complaints from buyers.

This is when the Master Data Management system has a great relevance and impact on the business, since the work teams will be able to know more about the customers and centralize their information to deliver a truly personalized experience; while ensuring greater quality in the product information across all purchasing channels.

Despite quarantine and extreme isolation measures, consumers expect timely delivery of their orders, frictionless shopping, and companies to provide more personalized offers based on each customer’s intentions or tastes.

Third, quickly shift to a strategy focused on e-commerce. According to the 2019 report for Latin America by the Ecommerce Foundation, sales volume has maintained a steady growth of around 15% and according to Statista, during 2019, the region had more than 155 million digital buyers.

On the other hand, according to a survey conducted in Colombia, as a result of the current contingency, sales through digital media increased by 50% since March 3. In Mexico there was a 40% increase in visits to online service payment and shopping sites and in Peru average reported eCommerce spending rose by 49% in the first week of quarantine. Experts assure that the increase in purchases on digital platforms will continue throughout the year.

As consumers become health conscious, avoid visits to physical stores and make their purchases online, eCommerce and marketplaces are gaining strength. Amazon, for its part, is hiring 100,000 employees as a result of this rapid change to respond to online demand. We estimate that these market dynamics will grow at an exponential level even as the spread of the virus is resolved.

Fourth, review inventory management systems. To respond to high demand, streamline processes and provide a successful customer experience, it is important to have complete control of product management to minimize the risk of impact.

According to Nielsen – March 2020, these are some of the challenges that eCommerce and Retail will face during the emergency: 80% may suffer a break in stocks, 75% pressure on the supply chain, 48% lack of manpower for the delivery of products to the end user and 40% high costs.

Fifth, respond quickly to the competition. While COVID-19 is definitely an unprecedented adversity, it also presents a great opportunity for companies to provide their digital platforms and services to the community.

This moment may even be the catapult that many organizations needed to consolidate their business in digital ecosystems. However, the competition will always be there and the key is to be more agile, more accurate, deliver great value to customers and provide the best possible shopping experience.

We have always waited for this moment: to wake up and turn strategies to digital systems!

Author: Ernesto Serrano, America-Retail