The Future of Retail Will Demand Courage, Commitment, and Compassion
By Inez Backburn, President of MTI Market Techniques and Innovations Inc.
For the last six months, it has felt like we are living in a Stephen King novel as our way of life has been turned upside down. The way we work, learn, shop, socialize, exercise, and escape has changed, and this new world order may continue into 2021. Going shopping, visiting friends dropping by the office demands preparation as you need a mask, sanitizer, and gloves. Long gone are the days for spontaneity, large social gatherings, and family events. This new world order has placed tremendous pressure on retailers and their suppliers as they struggle to adapt to emerging technologies, new retail formats, multi-ethnic and multi-generational households, and a very bumpy and rocky path to purchase.
Price Promotion and Place will be displaced!
Traditional marketing tactics focused on price promotion and place have been displaced by consumers who are shopping in a “Survival Mode,” stocking up on toilet paper, canned goods, dry goods, and for many of your alcohol. Shopping is now a planned event with line ups and many retailers struggling to keep necessities in-stock. E-commerce is experiencing geometric growth due to the pandemic as assortments in-store have been scaled back. The demand for a robust product assortment, endless aisles, and 24/7 convenience that drove Gen Y & Z online is enticing to all generational cohorts. Unfortunately, many retailers who failed to embrace the potential of e-commerce and prerequisite business processes and technologies before the pandemic have been rendered obsolete by the tsunami of change. Click and Collect, Drive, and Curb Side Pick Up will continue to evolve as consumers embrace this new normal. Consumers will continue to demand value and convenience as they no longer have to schedule a delivery time when they are home because they are home all the time!
Many of you reading this article may have lost your job or significant revenue and are struggling to make ends meet, and I feel your pain. I had many contracts put on hold at the start of the pandemic, and it has been challenging. In less than 24 hours, we shifted from being an employee or boss to a teacher, caregiver, health and wellness expert, mentor, “Chief Inspiration Officer” or, in my case, “Chief Crap Eliminator.” While navigating these uncharted waters has been trying, there is light at the end of the tunnel as we discover new ways of living, learning, working, and shopping.
Retail will continue to evolve as there will always be new formats, new technologies, new products, and more stressed and demanding customers. Retail will not, however, return to normal as consumers will not embrace previous shopping behaviors. The work, learn, and shop from home reality could be here to stay, which will have a significant impact on retail. We learned a lot about consumer behavior from the financial collapse in 2008 as things did not go back to normal. Wealth was lost in addition to jobs, and the fiscal conservatism continued for many years. The pandemic will impact shopping behaviors; we will face health and safety issues in addition to economic realities.
Will changes in consumer behavior become the new normal?
It is essential to remind ourselves that human beings are social creatures by nature, and there are significant generational differences in shopping in a post-COVID 19 world. Gen Z is struggling with no school, no socializing, no shopping, and hanging out with friends and is “Zoomed Out” by online learning. Gen Z is also checking out of traditional “Social Media” platforms where getting “Liked” could make or break your day. Baby Boomers and Gen X are also feeling the pressure as they struggle to find sanity in a crowded workspace. Your home is your castle, workplace, source of entertainment, restaurant gym, and social setting. Time is at a premium, and convenience reigns as we all struggle to create a work-life balance.
Social Media has shifted (Politics Aside) towards more genuine and authentic messaging rather than the pursuit of likes. Every generation is focusing on messages, videos, and posts designed to help others during the pandemic. Delicious meals on a budget, family games, exercising without equipment, building confidence and self-esteem at home, meditation, mindfulness, fashion advice, and staying sane while working from home are trending across all platforms. How has your social media and digital strategy changed to address the need for more relevant messaging?
Harvard Business Review recently published an article advising retailers to avoid being complacent and to focus on the customer experience. Delivering an exceptional customer experience will demand health and safety measures that include masks and physical distancing and extreme cleaning and disinfecting. There will also be an increased demand for contactless payment, as many retailers and shoppers raise concerns about handling cash. Social distancing will result in fewer shoppers in the store as well as the emergence of one direction shopping patterns with the reduction of in-aisle displays. The increase in self serve options will require 100% data integrity and full and seamless integration of loyalty programs and promotions.
Before the pandemic, traditional “Bricks and Mortar” retailers were in a battle with Amazon and leaders in E-Commerce, and subsequently declared war on the status quo. Unfortunately, the retail wars will continue, and the current path to purchase could become harder to predict and navigate in the absence of a focused strategy.
Embracing and leveraging E-Commerce, automation, AI, and deploying more sophisticated forecasting and replenishment models will, however, become more critical in the near and long term. More importantly, what will endear your customers to your brand, store, or business will be how you treated them during the pandemic and, more specifically, how you made them feel. Please take a moment to consider the following questions as your answers will determine whether your company will find shelter in the current COVID 19 storm.
- Do you greet your customers when they entered, did you thank them for their business, did you say “stay safe and healthy” when they left?
- If a customer came without a mask, did you offer them one or ask them to leave?
- Did you limit purchases of necessities so every shopper could get what they need?
- Did you train your employees on best practices for health and safety when dealing with customers?
- Did you deploy health and wellness protocols for your employees?
- Did you reach out to suppliers to work with them to address disruptions?
- Did you change your social media and digital strategy to include messages of hope and support?
- Did you go out of your way to thank first responders?
Will our online behavior result in significant growth for Big Tech?
We should also consider how all the information that we currently share online will be used? Data is the fuel that feeds AI, and the data collected during the pandemic will accelerate AI adoption and create deployment opportunities. What will Google, Facebook, Amazon, Instagram, TikTok, and Twitter do with all this data? Will they independently or collectively leverage our information? Will big tech companies analyze our data to the point where we become the product and accurately predict how we will live, learn, work, and shop. Is all the activity online tracking human behavior evolving into the creation of behavioral products that can be bought and sold? Shoshana Zuboth, in her book “The Age of Surveillance Capitalism,” raises many red flags concerning big tech companies who are using the pandemic to become even more prominent.
Will Google’s offer to develop contact tracing applications open a direct channel to healthcare and a significant revenue stream. Early signs point to Tech companies benefiting from the surveillance capitalism economy as they become more adept at predicting our behavior while simultaneously lobbying governments around the world to postpone enforcement of privacy laws. Every day billions of smartphones are generating digital footprints from the web and social media platforms that are currently inaccessible to universities, governments, and leading researchers. Just imagine what could be accomplished in healthcare, global contract tracing, communication, and outreach if this information was shared.
A message of hope and inspiration
The pandemic will one day end, and we will emerge healthy and triumphant. I, therefore, encourage everyone reading this article to remind yourself that it is more important to determine who you want to be rather than what you want to do. Who you want to be personally and professionally will be dictated by your beliefs, and those beliefs will influence your actions? The actions you take during the pandemic will secure or negatively impact your future. Take care of yourself, your family, and your customers with courage, commitment, and compassion.
During the pandemic, I baked Lindt chocolate brownies for first responders, shopped for seniors who could not get out, tutored children who needed help with math, called friends I hadn’t spoken to in a while to make sure they were ok. I sent cards of hope and sympathy to those who lost someone and dropped off meals for neighbors who were struggling. I also spent a great deal of time standing in lines outside retailers and conducting informal research studies. Many of you have heard the phrase dance like no one is watching well. I cleaned liked no one is watching and started writing two books, “Eat Pray Clean” and “Storemula.” I may not have been able to work the way I was used to during the pandemic, but I was able to make a difference.
Final thought; There are many good and kind people on this planet and if you can’t find one, be one!