As retailers welcome customers back into stores, it’s important to acknowledge COVID-19 has had a dramatic impact on consumer behaviour and the way people shop, with a greater disparity between the online and in-store shopping experience.
While there will be continued demand for a traditional retail experience and a physical store presence, retailers will need to work harder to entice consumers in an increasingly hypercompetitive market. With industry-wide margin pressures, the additional costs incurred to meet new government regulations for things like sanitising and staffing to enforce social distancing rules, are making it even harder for retailers to manage operational efficiencies.
Adopting smarter technology, which also enhances the consumer experience, can help. Australia is making progress with the adoption of self-checkouts and ‘scan and go’ technology, however, it is still lagging when compared to other international markets. For example, European supermarkets face stiff competition and rely on innovation to help differentiate their customer offering and drive efficiencies. It is not uncommon to see advanced technologies, such as electronic shelf labels that have replaced paper tickets on shelves. In North America, there’s roaming robots scanning shelves for product gaps and Amazon has just announced the new touchscreen-enabled shopping trolley.
With customer experience a critical consideration in today’s challenging retail environment, using technology to enhance on-shelf merchandising is key. Out of stocks or incorrectly ticketed items can leave customers with a negative brand and store perception but Australia’s grocery sector is making progress to help improve the issue. Last year, Woolworths undertook a trial with field marketing company CROSSMARK, using a new app called Compass that calculates lost sales and out of stocks.
The Compass app uses data analytics to help suppliers provide a better customer experience by identifying potential instore issues such as such as out of stocks, hidden products, lost facings, phantom stock or ticketing issues; anything that might contribute to lost sales. In Australia, the grocery sector commercialises store data but in other regions of the world this information is often available for brands to help strategically support stores and help drive a better customer experience.
As the future of retail will increasingly rely on the customer experience, personalisation is often seen as the best approach for it. However, retail basics cannot be overlooked as personalisation won’t make up for a badly merchandised store – products on shelf, correctly ticketed, and easy to shop.
Delivering highly personalised in-store experiences using data analytics and artificial intelligence will provide an exciting opportunity for retailers to evolve the shopping dynamic. With automation becoming more prevalent, a more customer-centric approach will see stores become more customer service-led, using technology to offer personalisation at scale.
Supermarkets today are focused on providing greater convenience, and COVID-19 has been a catalyst for online shopping growth. Together, these two forces make shoppers realise how easy and convenient it is to shop for groceries without the need to step into a physical store. However, human interaction will remain at the heart of retail. The industry will have to rethink how it can build relationships with customers to keep them coming back into stores, even when they don’t need to.
Patricio Servat is business development manager at Crossmark