Over the last couple of decades, retail has gone through a historical transformation, and retailers of different types have changed their strategies to survive. Ecommerce has been the only engine driving many of these fundamental shifts.
And then COVID-19 just happened.
Social distancing and stay-at-home orders have to speed up the adoption of eCommerce from a steady march forward to a wild run to the end line. Online demand will probably remain strong post-COVID-19, and retailers should adapt to the “new normal.” Defining an effective and winning eCommerce strategy and building the necessary capabilities will undoubtedly be a challenge yet, in addition, a massive opportunity to increase profitability and scale potential. Three factors are essential for such a strategy: build up a value proposition tailored to the online world, plan the effective supply chain to meet the need for a more omnichannel world, and empower the transformation with the right innovation, data, and individuals.
The Ecommerce Surge
Ecommerce has been driving an enormous change in retail due to evolving demographics, increasing competition, and rising client expectations. While eCommerce still only addressed 16% of total global retail value in early 2020, it will continue to expand and eventually take the lion’s share of growth in the retail industry.
COVID-19’s effect on online shopping demand has only added to mounting pressures facing retailers. As per the eMarketer, almost 50% of consumers have shifted their spending towards online channels, across all different categories ranging from grocery to electronics to apparel. Online orders see 2 to 3 times year-on-year growth, with certain retailers seeing increases of at least 20 times. Even online grocery, remarkable for its slow rate of customer adoption, has seen a monstrous rise in popularity over the recent months, driven by the desire for a contactless shopping experience.
Investment Time: Now or Never
Indeed, with surging online demand, there are different sides to the retail store. Chain drug, grocers, and other fundamental services have benefited mainly from the pandemic. Shoppers have been stocking the pantry, and their risk-averse behavior has driven sales higher than ever. While the stock-up impact will lessen over time, grocers can rely on sustained tailwinds all through the pandemic. With eCommerce sales growth leading the charge, organizations that can rapidly ramp up their home delivery “purchase online, pick up in-store” (BOPIS), as well as other new online models, are ranked to capture the lion’s share of growth.
Electronics, department stores, and other non-food retailers are battling for survival. However, brick-and-mortar sales have evaporated due to social distancing, and bankruptcies have effectively begun to pile up. More companies realize that the economy will probably not rapidly rebound until a vaccine is created, which could be months or even some years away. Survival will rely upon replacing dried-up revenue streams — eCommerce is probably the essential source in the future.
One lesson everyone should learn from COVID-19 is: The time to invest in eCommerce is now.
To meet this challenge, retailers require a tailored strategy to target customers and laser-focused on fast execution. While no two retailers are similar, an effective eCommerce strategy should address three crucial challenges. To begin with, define a winning customer proposition, which is unique for target customers. Second, design an effective supply chain to deliver against the customer expectation. Third, empower the transformation with technology, people, and processes to rapidly execute and deliver change. Ensuring your retailing business has contemporary eCommerce software is vital to satisfying your customers and keeping your profits flowing.
Too many retailers have wrongly tried to roll out eCommerce without thinking strategically about the overall customer proposition. Companies frequently fail to go past replicating the store experience with a website. This can lead to excessively complex designs, cumbersome user experiences, and estranged customers. Ecommerce without strategic vision almost always fails.
Instead, retailers should envision eCommerce as part of a holistic commercial offering. The primary objective is to design a seamless shopping process that increases touchpoints, mindshare and complements the in-store experience. Building with a strategic vision enables retailers to target ideal customers better and often improves the resulting operations.
While not exhaustive, retailers ought to consider at least three critical factors in building up their eCommerce customer proposition:
Customer engagement: In today’s market, shoppers have infinite optionality. Retailers should focus on creating opportunities to interact meaningfully with customers and give seamless user experiences across in-store and digital environments. This needs understanding what the “jobs are being done” by the consumer: what is the particular need being met? Retailers should return to fundamentals: listen to the customer and set up a strong brand built into each customer touchpoint.
Product and service offering: Many retailers consider they need an expansive portfolio to compete online. A couple of companies can offer everything, such as Walmart, Amazon — for most others, this is a total trap. Retailers should be smarter about where and how they compete. A portfolio of items tailored to target customers adjusted for their preferences can inspire new online behaviors. It tends to be the difference between a fantastic customer experience and one that is overwhelming — with the additional benefit of substantially streamlined operations.
Channel structuring: Retailers frequently inadvertently compete with themselves by implementing eCommerce platforms that undermine their different channels. This can bring in inconsistent pricing, confusing product selection, and poor customer service. Instead, when structuring eCommerce, organizations ought to maintain consistency through distribution networks and continue focusing on the customer. Driving remarkable channel engagement and attraction through exclusive opportunities or products can create welcoming and differentiated experiences.
The future of retail is now taking shape. This new landscape demands eCommerce capabilities that deliver successful customer offerings and professional supply chain designs. Driving and delivering these starts with the technology, people, and processes that empower the transformation:
Technology & advanced analytics
Successful eCommerce channels require next-generation technology and modern modeling. Customer experience across platforms is critical to conversion and retention, yet back-end predictive analytics, upheld by robust Big Data infrastructure; drive both supply chain efficiencies and customer behavioral insights. Having a smooth online customer experience is no more than table stakes — the differentiator is capturing, assessing, and drawing insights from billions of data points, and having the operational agility to execute.
Planning an organization that best response to evolving difficulties is critical for success. There is no “one-size-fits-all” approach: eCommerce maturity, business complexity, and culture significantly impact the choice, and elements can evolve. Retailers should figure out where the eCommerce business sits within the organization, what supporting functions are required, and how to balance the freedom to work with organizational control. Also, retailers should attract talent, have the “right” cultural mindset, communicate across functions, and define decision-making processes to empower an effective operation.
Innovation and continuous development
While COVID-19 presents a prompt burning platform for transformation, this won’t be a one-time shift. Customer preferences will change along with the “new normal.” In parallel, startups and incumbents from different spaces will accelerate the disruption in the post-COVID-19 recovery scramble. Retailers have to innovate quicker than ever before in customer experience, product development, and operational agility.
While numerous retailers are still designing effective eCommerce channels, consumers are ready for the future. Some may think it is still too soon or that it would be better for the pandemic “dust to settle” prior to embarking upon a transformation. Be that as it may, most industries have effectively reached the pivotal point of change. Fast movers are ready to leapfrog the competition — enduring, however, thriving in the post-COVID world. Retailers should consider eCommerce as a holistic process and align the business strategy to operational execution. Ecommerce transformation will need massive investment and commitment from retailers in order to make sustainable, efficient capabilities, yet those that take the leap will create the platform for success.
Get in touch with our eCommerce experts to build your next-gen, robust, and secure online store today!