2020 marks the beginning of a time of reckoning for retail with the crossover to a new decade, against the backdrop of global economic uncertainty exacerbated by the COVID-19 outbreak. This new era of retail will be dictated by constant preparedness for the future and brands need to continuously reinvent themselves now more than ever.
Retail might seem like it’s fighting an uphill battle but there are positive indicators that the appetite of Australian consumers hasn’t completely waned. In some sectors, shopping sentiment has skyrocketed. Our latest data shows sporting goods for 2020 to date has significantly outperformed that of Q1 2019 by over 11 times1. Since the beginning of 2020 Webcam sales have hit a peak increase of 1300% and pet training aids have peaked over 300% since the start of the year.
In the face of COVID-19, all is not lost but the pandemic has forced retailers’ hand at truly embracing and acting on change in three main ways.
It’s the tipping point for retailers who failed to adapt digitally
Most, if not all of us, were unprepared for the pandemic but there has been more of a spotlight on those that are accountable to the people they serve, such as brands and retailers to customers. This is because some businesses failed to adequately supplement the shopping experiences they offered with innovative, engaging digital tools.
Digital marketing is one example. Pre-COVID-19, 8 of 10 Australians shop online and by 2021, the ecommerce market penetration rate will reach 85.2%. Retailers should focus on remarketing – a huge opportunity in doubling down on increasing the conversions from website visits. To complement these efforts, retailers can adopt ‘custom audiences’ if partnering with advertisers that can provide first-party data to put products in front of customers they already know.
Playing catch-up when a crisis hits will always put you one step behind and to some, not being a digital-native retailer pre-COVID-19 has done just that.
It’s forced efforts to wholly execute and convert sales online
In a time highly fueled with fear and uncertainty, customers are experiencing mindset shifts that are dictating their day-to-day behaviour. Customers are actively seeking ways to distract themselves from sadness, alleviate their concerns and bring joy. Not being able to physically interact with others, customers are increasingly depending on technology to do this.
Retailers must use their online efforts to execute and convert sales because customers are expecting them to meet them where they are. To do so, promote your business without looking opportunistic by allaying customer motivations. If you can’t sell your product or service, look for ways to build and nurture customer relationships by looking at what can help them navigate the current situation.
This is not a flash-in-the-pan approach. Retailers must have their finger on the pulse on how customer behaviour and sentiment is shifting, as these are subject to change at any given moment. Criteo is helping its partners do just that by applying advanced machine learning and unparalleled data sets to better understand and serve customers at this time.
It’s forced retailers into a new understanding of the supply chain
The pandemic has forced many to rapidly adapt their supply chains because the importance of delivering a frictionless ecommerce experience has hit new highs. Without understanding the extraordinary measures put in place to ensure that products continue to be delivered to stores and the doorsteps of consumers, retailers are not setting themselves up for success.
Above all, retailers need to maintain an open line of communication with their suppliers. As network-wide shortages become commonplace, transparency is key to securing a fast and reliable supply. McKinsey & Company has also noted discretionary and nondiscretionary categories across suppliers, merchandising, distribution, logistics and fulfilment which outline key areas for action across the supply chain that can help retailers meet demand.
While this pandemic is a passing moment in time, brands will be remembered by how they supported their customers in time of need. However, operating in the new era of retail is not just about withstanding the current situation. COVID-19 has kickstarted three areas of change that should transform a retailer’s approach to be successful for both today and the foreseeable future.
Colin Barnard is Commercial Director at Criteo Australia and New Zealand