Every retailer is focused on the “new normal” coming out of the pandemic, especially as it relates to shopping habits. However, substantial changes affected the retail industry before COVID-19 and accelerated due to in-store visits taking a significant hit.
Some retailers lost out, but some found a way to pivot, leading to lasting change in the way people buy and sell.
To help our retail customers chart a course toward a rebound, Infobip commissioned research to identify how the shopping landscape has changed and what consumers expect now and in the future.
The IDC Infobrief, sponsored by Infobip, “From Disruption to Crisis, to Rebound: The Resiliency of Retail in a Changed Landscape,” highlights the trends facing retailers as they re-open for business in a post-pandemic environment.
Trend #1: Retail spending is coming back – but still below pre-COVID levels
Overall, retail spending dropped from 34% to 23% during the pandemic, but post-COVID levels are projected to creep back up, though not reaching pre-pandemic levels just yet.
Retailers can help encourage consumers to up their spending game by looking for ways to meet them where they are now.
For example, retailers such as Target were especially poised to seize the opportunity with same-day delivery services. Even non-essential retailers like Lululemon were able to capitalize on the “loungewear wave” and the “home workout revolution.” Two trends likely to stay with us long after the pandemic.
For more on how best-in-class retail giants like Unilever, Amazon, and Zappos are driving loyalty and retention in 2021 through focusing on the customer experience (CX), download our guide, “CX Market Leaders in Retail”.
Trend #2: Segment matters – some retail segments fared better than others during the pandemic
Like many other economic trends over the past 18 months, COVID-19 accelerated what was already transforming in the retail landscape. Depending on which retail segment you’re in, things got a lot worse – or better.
Not surprisingly, essential segments (including grocery, pharmacies, and hardware stores) saw an 18% growth in sales. In contrast, non-essential segments (footwear, apparel) saw a nearly 16% decrease and were among the first to shut down. The opportunity was for e-commerce businesses, which were well equipped to respond to the increase in online spending precipitated by the pandemic.
Just as the movement toward hybrid workforces (a blend of in-office and at-home workplaces) is expected to be the norm post-COVID-19, retailers who excel at “hybrid models” consisting of in-store and online options for buying and returning will be able to win the hearts and wallets of their consumers.
Trend #3: Consumer expectations changed significantly during the pandemic – and are likely to become permanent
Consumers have developed certain expectations about how they want to interact with stores. That is not likely to change as we look toward returning to “normalcy” after the pandemic.
Shoppers may have moved online for a majority of their purchases, but they haven’t abandoned brick and mortar stores altogether. They are taking a holistic view of their shopping interactions, redefining the omnichannel experience in new ways. The trend toward Buy Online, Pick Up In-Store (BOPIS), or curbside, in addition to same-day delivery from ordering online has made the overall shopping experience easier and more convenient.
With the proliferation of these omnichannel buying experiences comes the need to communicate with consumers about their purchases through personalized messaging, SMS communications, chatbots, and more. Consumers expect these communications and no longer find notifications from retailers a nuisance when they are expecting a delivery.
More than 50% of consumers prefer omnichannel experiences, and 70% of them prefer contactless payments, changing how they want to interact with stores. The consumer has spoken. Are retailers listening?
Trend #4: The future is bright for retail spending – provided retailers take advantage of the “New (Shopping) Normal”
Retail has historically been behind the digital curve, but COVID-19 forced a quick catch-up. In some cases, new growth opportunities will become table stakes for the industry long after the pandemic recedes.
The most crucial change cited by retailers investing to meet the needs of changing consumer expectations is the requirement to support a connected customer experience. More than half of retailers rate CX Innovation as a priority for transformation over the next three years.
As a result, retailers who create end-to-end journeys that let the customer own the process and move beyond just COVID-19 concerns are the best poised to give customers the experience they demand.
There’s still time for retailers to up their digital game and meet the new demands of their customers who have redefined consumerism for the way we live — and shop — now. Stay tuned for our next “Retail Resiliency” blog that will cover new research from an IDC White Paper about what the pandemic has taught retailers about the customer experience.
Download our IDC Infobrief
Learn more about the pandemic’s impact on consumer shopping habits and the new opportunities for retailers.