Trends in consumption and retail before the Covid-19

Investing in technological and digital transformation initiatives will be key for stores, shops and supermarkets to become more competitive, grow in a sustained manner and ensure, in the short and medium term, a promising scenario that will allow them to emerge from the Covid-19 era much stronger. This is detailed in the Ascendant Report on the situation of the Spanish Consumer and Retail companies in the face of Covid-19, prepared by Minsait, a company of Indra, in which one can see not only the technologies that will impact on the most immediate future of the sector, but also how digitalisation has been the key to minimise the impact caused by the virus, to guarantee the management of operations and to ensure the activity, even in the most critical moments of the pandemic.

Once that phase is over, Minsait stresses, it will be more important than ever to combine a dynamic management culture with the application of agile technologies and end-to-end capabilities to evolve in this context, differentiate themselves from the competition and consolidate the new business models that are becoming widespread in the post-Covid stage. Another step in the digitalization that many of the companies in the sector had already begun and that has accelerated in the new scenario created by the pandemic in which, in barely three months, some of the trends that, in the area of transformation, were already beginning to lead businesses and shops, have evolved to the extreme.

According to Minsait, in the current context, companies in the sector are now looking for new work and management models that enable information exchanges with customers and end consumers, strengthening their digital channels to reach, more efficiently, an audience that, during the confinement, has linked, even more so, its purchasing behavior to technology. Likewise, above other technological proposals, the automation of tasks; the union of the online part with the physical store to achieve unified shopping experiences; the control and management of operational risks; the introduction of dynamic pricing and incentive management solutions; as well as the implementation of cyber security technologies that allow data protection; and the provision of resources that help to encourage measures to contribute positively to society and the environment are beginning to stand out.

Schnobrich
Photo: Schnobrich

This is a necessary development that, the Minsait Report points out, is a response to the consumer that emerged after Covid-19, who has incorporated technology into their lifestyle for actions ranging from comparing and analyzing prices and products, to making online purchases or teleworking, and who has increased their concern for health and safety, while at the same time growing their interest and awareness of environmental care and sustainability.

Containment measures that are here to stay The arrival of Covid-19 has accelerated the implementation of measures that had already been contemplated by many Consumer and Retail companies, in the face of the harsh competitive context that the sector has been experiencing in recent years. Thus, if at first many businesses focused their efforts on business continuity, in the medium term they began to strengthen online channels and customer service systems. Along with this, the Minsait Report maintains that, in line with the trends observed, companies in the sector will focus on the following areas:

The integral management of data, which will acquire strategic relevance to increase consumer knowledge and increase the transparency and agility of the supply chains.

Solutions that provide a clearer business vision in the short term and in an environment of greater uncertainty, such as robotization in process automation to improve production efficiency; or execution at the point of sale, dynamic pricing and incentive management to boost sales and protect margins.

Companies will be committed to projects that guarantee business continuity and speed up the response to demand, such as migrations to cloud platforms, and will abandon their doubts when it comes to investments in cybersecurity, both in the area of information and operations.

Engagement with customers is already a key premise, not only to gain their trust and loyalty, but also to anticipate any change in demand trends. Therefore, the evolution of eCommerce systems and the launch of direct sales channels will be essential to increase revenues and update the product strategy in line with consumer interests.
The technological solutions for digitizing the point of sale will once again be part of the business strategy, as physical stores will have to evolve much more quickly into spaces of experience where they can captivate the customer while maintaining confidence and security.

The experience of the main companies in the sector Minsait’s Ascendant Report for Consumer and Retailing compiles the experience lived in these months by some of the main companies in the sector, which coincide in pointing out how technology has not only managed to stop the possible devastating effects of the crisis, but has become the main ally to accompany the business strategy in the most immediate future.

“Technology has been fundamental in being able to endure this period with peace of mind,” stresses Antonio Rodríguez, CIO of Jealsa, who recalls how it has been possible to establish new business processes and operations at the worst moment of the pandemic. For example, “recently there was an open debate about teleworking and at this stage we have learned a lot and seen that it can be offered without affecting productivity”.

In relation to the business and how it should evolve with the return to activity, “there are a series of basics that must be taken into account and in which progress must be made: a good online platform, a comprehensive payment platform, a unique vision of the customer to understand where he comes from, where he buys, where he is inspired; digital marketing to activate these customers, a good CRM…” maintains Morisi Cabezas, CDO at IKEA Spain.

Carlos Uceira, Refrival’s CIO, believes that “in the coming months investments will be scrutinised, but without losing focus on the fact that technology is necessary. It has become clear that this is a way to move forward in order to cope with situations like the one we have experienced”. For Javier Alvarez, CIO of Heineken Spain, “this crisis has served as a definitive backbone to what I would call ‘socialization of technology’. The popularization of e-commerce is the clearest example, that will allow a greater interaction of the consumer and, consequently, a better knowledge and faster identification of purchase trends”.

Diego Sebastián de Erice, director of e-commerce at Grupo DIA, also maintains that in areas such as food, “the sector must break the barrier of e-commerce and establish this channel as a key to the new challenges offered by future consumer habits.

This maxim is shared by César Zapata, CIO of the Lactalis Group, who also draws attention to how the consumer profile has evolved in recent months and the need to respond to these concerns: “Consumers are much more concerned about quality and the health aspect. There is growing concern about product traceability, origin and treatment”. For the expert, these are trends that will continue to grow because they are looking for greater control over products, reaffirming the commitment to those brands that offer more guarantees and confidence.

Author: America-Retail