Retail after Covid – what's next?

Retail was already heading digital, but Covid has accelerated the need for a greater investment in ecommerce. Asset Factory Co-Founders, Jo and Andy Mackie, share their thoughts on customer behavioural change, the opportunities for ecommerce businesses, and what this new landscape looks like.

Prior to the pandemic, economic and technological changes were already forcing traditional brick and mortar businesses to adopt new digital experiences and solutions. Big retailers were already getting bigger and ecommerce business was up ten percent in the months before Covid hit; forcing local, independent shops to deploy new channels of distribution to stay afloat. 

But it’s no secret that Covid has greatly accelerated this change. Research conducted by leading market research company, Datamine, suggests online spend is currently at $830M, boasting 47.4 percent growth compared to October last year. That’s a pretty hefty increase!

Ecommerce business has become the engine of trade. Meanwhile, retail omnichannel solutions have turned from a strategy threaded by some retailers to a firm string in the bow for everyone; from fashion to FMCG consumer products.

This continued digital growth has changed the face of the retail experience. As retailers grapple with aggressive shifts online, their customers are becoming increasingly discerning, seeking out faster, more authentic online experiences. 

There’s no better example than the explosion of BNPL (buy now pay later) deals across the world. It’s already gained a foothold in Australia, with BNPL transactions predicted to outstrip credit card payments for ecommerce by 2024. Along with BNPL, alternative payment methods like virtual shopping and digital wallets are waiting in the wings to offer customers contactless, frictionless payment methods. 

Basically, Covid has changed the way we shop, interact, and value experiences. Not only has it forced changes to the way businesses operate; it has also created behavioural change in consumers, largely driven by newfound apprehension of being indoors with strangers.  

It’s one thing to adopt these digital channels, but it’s another to make them valuable. In the fast-moving landscape of online shopping, creating user-friendly experiences, while carving an authentic digital brand identity that’ll increase brand visibility and awareness, is more important than ever. 

For retailers grappling with fast increases in mobile spend, investing in mobile-optimised web pages, user experience (UX) design, and an easy online check-out process is essential.

These genuine omnichannel strategies, including personalised video, imagery and other digital assets, are, and will continue to be, a vital piece to every retail strategy puzzle. 

Strong digital growth won’t spark the death of traditional brick and mortar retail though. Instead, it’ll shift to become part of a wider retail omnichannel strategy. Whilst many of us have forgotten what ‘normal’ actually feels like, as we all phase out of regular lockdowns and into ‘living with the thing’, retailers will open the doors of their stores and things will slowly start to feel normal again! 

Whilst in store sales will inevitably climb again, digital will remain strong; it’ll never replace the personal interactions you get in store but will complement them to create more meaningful experiences for the customer. 

Brands who deploy new digital channels and focus on engaging content creation methods will keep experiencing growth. 

We’ve seen this in many of our local brands who, previously hamstrung by the wholesale market, have managed to regain both their market and brand identity. Lockdowns may have halted the operations of wholesalers, but lots of independent brands have refused to fold with them. They deployed digital solutions, took back control over their brand, built out their own online content and, in the process, rediscovered their identity. 

Essentially, moving to ecommerce business enabled them to maintain their local presence, while gaining exponential reach by selling online. 

The retail landscape has, and continues to, change all over the world. Here in Australia, as well as NZ, the UK and the US, we’re walking through a post lockdown landscape where we’ve seen a similar flow of economic activity into ecommerce.  

A recent survey of independent retailers in the U.S shows 80 percent of brands who added new channels to their businesses during the pandemic benefited – and wanted to keep them. 

For all the difficult closures of independent retailers, many opportunities have risen from the pandemic, redefining how we shop and sell. 

As The Atlantic aptly puts it: customer engagements have decentralised from brick-and-mortar storefronts to a constellation of in-person and online touchpoints. 

How we manage these new channels, however, remains the next big question.

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