As technology continues to evolve at the speed of lightning, consumer behavior is also changing at the same pace. The modern consumer is tech-savvy and more connected than ever before, which has forced retailers to go digital so that they remain relevant. The trends that are anticipated to drive the digital retail sector in 2020 are primarily influenced by consumer expectations such as the need for speed and enhanced experiences. Some of the top trends that every retailer should have their eyes on include
RETAIL THE NEW NORMAL
In response to the pandemic, we have seen a change in consumer behavior. E-commerce platforms experienced a 6% increase in global traffic between January and March 2020.
Websites generated 14.34 billion visits, compared to 12.81 billion in January 2020. The mass retail sector has been number one since the beginning of the crisis with a record +135% growth in volume of visits and +103% growth in transactions. The Digital technology has become the cornerstone of our way of life and the economy in quarantine.
The crisis has not profoundly changed our aspirations and expectations, but the new rules are introducing new modes of consumption, new trends, some of which will disappear and others which will forge new retail models. To remain relevant in this changed environment, retailers will need to focus on the customer experience and define specific objectives.
Retailers are facing problems with their stores that the industry has never experienced before. Despite the challenges that the stores face, we see an opportunity for the in-store trade to integrate technologies that can help to adapt to the new way customers interact with physical locations in the midst of the crisis and in the midst of the preparation for the return of customers.
It all starts with the customers and how they experience a physical store. Retailers who can personalize shopping experiences by store will be the ones who succeed.
In order to do so, Adaptive retailers know how to transform and shape specific experiences adapted adjusted to each client in an experiential physical space.
1. THE RISE OF THE DRIVE
If home delivery is booming with sales that have doubled over the last two years weeks, more than 80% of the generalist food e-commerce remains made by the drive. The drive-thru channel was already the only channel with a promising growth potential of 7%. Its turnover increased by 80% during the lock-down period.
The reasons for this success are due to the respect of the social distancing rules and the diversification of the client base.
E-commerce is appealing not only to families that until now have accounted for most sales, but also to an additional 1,2 million households in the first week of confinement, including nearly 500,000 retirees. DIY and home improvement stores such as Leroy Merlin, Castorama and Brico Dépôt who opened their doors for their costumers to buy essential products, have also switched to drive-thru. Drive-thru collaborations have also made their appearance: Chronodrive has joined forces with Yper, its collaborative platform, allowing costumers to do the shopping for thei neighboors at arisk. Carrefour has launched a test phase with Shopopop and offers delivery by individuals, thus avoiding the need to use its own fleets. Some consumers will have developed new habits during containment and will be permanently converted, while others will prefer to remain faithful to their pre-crisis consumption habits. The balance will nevertheless remain positive, since a market share of around 8% is anticipated for the rest of 2020. The economic crisis that will follow the health crisis will be a catalyst for this circuit, which offers advantages: convenience, real time savings for consumers, good budget control and access to an attractive promotional offer, often at the same prices as in stores.
2. « BUY NOW, PAY LATER »
One of the latest trends in retail is the growing popularity of immediate purchase and subsequent payment systems. The «Buy now, pay later» concept has exploded in the fashion industry (Asos, Boohoo, Topshop…). This allows buyers to delay and stagger the payment of a product they can take home immediately.
The ready-to-wear retailer Etam was a forerunner in France by launching Try At Home: a logistical innovation that allows an increase in the average basket, while saving time for customers who only pay for the items that suit them.
The pure player Zalando dissociated the process of the cash flow. By offering the possibility for customers to pay after they have received their order with all the options of payments available, customers can benefit from a more fluid payment system and decide to pay when they’re ready.
In the current economic climate, flexibility payments can contribute significantly to increase the average order size, while making shopping more enjoyable for the consumers.
3. DIGITAL PAYEMENTS
The Scan & Go functionality is gaining ground, as it makes the checkout process more fluid, a very sensitive point for supermarkets today. In France, Monoprix stands out with its Monop’Easy application, which allows customers to scan products themselves before putting them in their shopping trolley.
The promise is obvious: less time in the store and an improved customer shopping experience.. Retailers are gradually approaching the «perfect» shopping experience, Just Walk Out, initiated by Amazon Go, which allows costumers to do their shopping and exit the store via smartphone identification. Sensors combined with artificial intelligence are used to detect purchases and automatically invoice accordingly.
Acceptance of payments via digital modes has grown rapidly. By 2025, the adoption of these payments could be as high as 67% worldwide, estimated at 57% before Covid-19.
Customers increasingly expect to be able to make a purchase immediately, without redirection or lengthy payment forms. Pay by Link is a simple tool that allows you to create and send personalized payment links in seconds, directly to the customer’s inbox.
This means of payment is very popular with luxury houses. Indeed, this solution is an excellent way to sell a limited edition or custom-made item to VIP customers.
4. STORES WITHOUT STAFF AND CASHIERLESS
Since the crisis, unmanned stores have been experiencing an unprecedented success, particularly in China. The tools that enable this digital transformation includes RFID tags, computer vision system, machine learning, IoT devices and facial recognition.
Amazon developed the cashierless Just Walk Out system, allowing customers to come to the store simply using a credit card. The technology underlying this system is the Amazon Go Grocery model that includes RFID and Bluetooth and allows making purchases without going through the cashier.
To further reduce direct in-store interactions, it is also possible to develop a contactless shopping system, scanning barcodes and QR Codes so that customers can receive information about desired products via their smartphone.
Cleaning, moving merchandise off the shelves, guiding customers, tracking and analyzing inventory… are no longer reserved for humans alone. Badger Technologies illustrates this trend by having developed a fully autonomous robot, equipped with sensors and computer vision technology to identify out-of-stocks, non- complacent prices and other anomalies in the store. Robots, combined with artificial intelligence, are expected to help retailers more than ever to reduce costs and improve store operations…
5. LIVE STREAMING
After the Covid-19 pandemic, millions of people were confined at home. Live streaming has grown considerably and has proven to be an excellent opportunity to growth (the video witnessed a conversion rate average of 10.57%).
Experience, interaction, authenticity and immersion are the key words at retain the added value of live performance streaming to commerce. According to the Chinese Ministry of trade, the number of e-commerce live sessions exceeded $4 million over the course of the first quarter of the year
This trend is becoming more apparent in the West and some Western brands such as Guess, MAC, Burberry or Paul Smith have become aware of the power of this channel and take advantage of the Global Shopping Festival, which is organized every year by Alibaba, to participate in the «See Now, Buy Now» fashion show.
During this fashion show, Chinese consumers can instantly order items worn by the models from the Taobao application.
During these weeks of confinement, the Decathlon brand took advantage of the opportunity to push the eclub. decathlon.fr by opening it up for free, thus improving conditions for thousands of people by getting everyone involved in sports activities.
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