How The Pandemic Is Revolutionizing Retail Posted on | MediaPost


The global pandemic is holding a mirror to our faces, challenging us to question our spending habits. And arguably, no sector has been harder hit than retail. In March alone, when our country was closed for only two weeks, retail sales went down 50%, and with the bankruptcy filing of J.Crew this month, the pandemic has claimed its first retail casualty.

But there is hope. Despite likely broad and fundamental changes to the retail experience as we knew it, one in four people say that shopping is the activity they are most looking forward to getting back to after the COVID-19 crisis subsides.

So how can retailers prepare to meet both new customer expectations as well as government health regulations? We surveyed Americans to understand what they want most from retailers going forward, and how brands can step up to meet these needs.

In addition to the common threads across many industries, including cleanliness, social distancing standards, and omnichannel shopping, purchase and collection/delivery options, the findings revealed three key areas where expectations are changing. Those areas include a shift in price sensitivity and embrace of off-price goods, new tech-enabled features that bring in-store inspiration into the home and make it safer to be in-store  and an increased awareness in supply chain, product, and packaging sustainability.

Embrace consumers who are trading down. Following the 2008 financial crisis, the off-price industry blossomed as consumers became more price-conscious than ever. Today, consumers across the board are driven to deal-hunt as they cut spend from their closets: 22% of the nearly 400 consumers we surveyed are already cutting spend on fashion purchases. Notably, higher-earning consumers are still shopping, but beginning to trade down, embracing lower-priced options as we move into increasingly challenging financial times; 34% of consumers with a household income over $75,000  are planning on turning to sale-centric shopping after quarantine ends, with no reduction in frequency. Marketers should reevaluate their target audiences and messaging, reaching higher-income shoppers with new price-sensitive messaging that speaks to today’s needs.

Accelerate the in-store experience. Retailers from Ulta Beauty to H&M to HomeGoods have long offered shoppers the thrill of discovery and inspiration. But as consumers remain cautious about being outside their homes, the new shopper mindset is less about the hunt, and more about the transaction: 42% say they will use curbside pick-up more often. But marketers can use technology to meet the new customer needs beyond curbside options. Location-based technologies accelerated by 5G can alert shoppers to the number of people in a store at one time, and predict the best time to visit a store to avoid crowds or lines. Additionally, our research shows that one in four respondents want retailers to incorporate “payment options with their mobile phone” or “touchless or robust self-checkout options” as part of the checkout experience. As 50%  of all mall purchases are made in cash, retailers will need to encourage contactless alternatives,  including turning reward programs into payment systems, or incorporating Venmo or Apple Pay into everyday transactions.

Re-imagine the digital dressing room for both inspiration and transaction. As shopping remains primarily online, the act of trying on products needs to go beyond the physical dressing room. Gen Z and Millennial shoppers in particular expect technology to fill the physical gap: 1 in 4 say they expect retailers to offer AR technology to “try on” products at home, and we’ve started to see retailers like Kendra Scott begin to adopt virtual try-on tech for jewelry. Artificial intelligence can also provide consumers with personal shopping recommendations based on real-time and predictive data sets that are customized to each shopper’s preferences, as well as style, fit, and availability. And with 24% of consumers expecting to increase their spending via social media after Covid-19, increased investment in this space can also move the needle.  In the next retail chapter, meet consumers where they are by prioritizing their digital world for both inspiration and transaction.

Reinvent the delivery model. Quarantine go-tos like Amazon and Grubhub have seen consumer spending grow by over 30% since the start of the pandemic. With third-party delivery app usage at an all-time high, retail brands have an opportunity to rethink their delivery models. And as we adjust to new normals, consumers want safety and sustainability alongside speedy delivery. One in four consumers are hoping to receive boxes/packaging with protective materials.  Consider new pathways into retail with third-party delivery apps or new subscription or membership services that can provide a more relevant trial of products, and rethink packaging needs to account for a broader set of consumer values beyond expediency.

Liz Fermon, Director, Communications Planning, Mediahub US

This article was originally published on MediaPost