The International Data Corporation (IDC) have now halved their growth estimation for the global retail industry in 2020 from pre-COVID-19 forecasts and predict that impacts will vary considerably from one sector to another. As the novel coronavirus hit China, who is the engine of luxury consumption, brands saw a first drop in revenue. As the pandemic eventually hit Italy, where many luxury brands are headquartered and home to key suppliers, the nationwide lockdown meant operations were further impacted.
Grocery retail, on the contrary, has seen a positive impact as consumers stock up on food and supplies at a higher price.
As the economic consequences of the virus hit the retail industry, retailers had to act immediately and not only protect their business but also their employees and customers, ensuring the safety of everyone in the value chain. With lock-downs being declared in all parts of the world, stores and retailers closed, the supply chain slowed down if not stopped, demand became unpredictable, with huge impacts on stocks, and store footfall has dropped. Business continuity became their primary focus, alongside emergency response management, immediate adaptation of staff, simplification of assortment and an increase in online capacity.
Simultaneously, from a customer behavior perspective, concerns over COVID-19 risks drove online demand - 47% of customers increased their online shopping activities. However, this quick spike in demand meant that almost 40% of shoppers were unable to find what they were looking for and 25% did not receive their orders on time. In the clothing industry for example, consumers waited for weeks and even months for their products to be delivered. Despite an increase in costs and a reduced margin, the results do not match consumers’ expectations.
Having to face a number of challenges, such as emergency response, changing customer behavior and latent digital disruption all exacerbated by the outbreak; the retail industry has entered into territory of the new normal.
Online shopping has become prevalent and the standard for convenient shopping - making experience the forefront of brand differentiation. Brands and companies are now more than just what they say - they are what they do. According to Salesforce’s ‘State of the Connected Customer’ (2018), 84% of consumers say the experience a company provides is just as important as their product and service. The omni-channel shopper experience and responsiveness to demand represents a new consumer mandate that every company should embrace.
The ability to adapt to the coronavirus outbreak and its tendencies linked to its economic impact also include the long-term effects, which is what will separate the winners from the losers. To avoid digital Darwinism, companies need keep adapting towards the new normal - digital-first. The good news is that the solutions and technology for them to upgrade already exist.
Technology areas that are key to address include the challenges of commerce and self-serve technologies, intelligent and contextual marketing technologies, shopping as an experience both online and offline, and supply chain automation backed by a robust cloud-based AI-enabled infrastructure.
Salesforce is addressing these needs with a set of solutions including their Commerce Cloud B2BC & B2B, Community & Service Cloud and Marketing & Integration Cloud amongst others.
With 15 years of experience, a worldwide recognised Salesforce multi-cloud Platinum partner status, and the #1 agency worldwide, Isobar has throughout the years gained in-depth knowledge and expertise of the retail industry and has delivered high-value solutions to address the specific needs of our clients. With a team of 1500+ Salesforce experts, we have successfully completed several projects for retail organisations across the world.
Keep in mind the following priorities for driving your business in this new era:
- Transform to a digital-first model
- Back to basics - focus on the customer
- Reimagine your stores to supplement the digital-first model
- Make your operations agile & flexibleLeverage tech intensity to drive growth & efficiency
- Elevate environmental & social consciousnessStrengthen the power of business to do good in tough times
We are ready to discuss. Are you? Contact us, to find out how you can adapt to the new digital era of online shopping and experience.
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