In an uncertain age defined by the terms ‘isolation’, ‘remote’ and ‘socially distanced’, it’s perhaps fitting that this year’s NRF Big Show unfolded virtually – especially since so many of the shared insights revolved around reimagining the face-to-face experience.
The world has changed rapidly over the past year, and retailers are racing to keep up with a new frontier filled with automated stores, AI-powered everything, sky-high customer expectations and socially conscious practices. For businesses that have not yet transformed to face the future, the time to act is now.
But what might this amorphous future look like, and how can today’s retail leaders use this moment to innovate, grow stronger and better meet the need of their customers?
To find out, let’s take a look at four key insights from the 2021 NRF Big Show.
1. The reversed roles of online and the store
Before the pandemic, stores often functioned as showrooms for brands, enabling customers to browse and discover products at their leisure, perhaps while making some impulse buys. All that changed in the face of lockdown measures and safety concerns, when trips to the store became less about discovery and more about fulfilment, often for purchases made digitally.
On the flipside, digital channels became places for less purposeful shopping. This shift was reflected in online conversion rates, which dropped from 3% to 1% as traffic increased, while in-store conversion rates rose from 10% to 25%. This reversal of roles led to many retailers reimagining their customer experience with new services and offerings.
- Amazon launched Amazon Explore, where customers can book live virtual experiences with experts, many of which are shopping-enabled.
- IKEA in China created an app that lets users walk through a virtual 3D store, customising the colours and fabric of furniture as they go. This has led to a 900% boost in conversion rate for home furnishings.
- Carrefour implemented mobile ordering and robotic pickup for some of its Paris locations, while Starbucks rolled out walk-through stores with online ordering and contact-free pickup.
While many new virtual and low-contact offerings were created to address health and safety concerns, they have the potential to transcend their prosaic origins and become truly disruptive technologies. As these technologies rise, the role of the store will further evolve, and the future looks to be a place where store strategy is a subset of digital strategy.
2. The rise of the low-touch economy
Moving towards low-touch or totally contactless shopping experiences became a priority in 2020, and many of the changes instituted by retailers will become a permanent part of the new normal. The low-touch economy is here to stay, and some of the new ways of doing business not only create safer experiences, but more efficient and personal ones.
- Cornershop by Capgemini in London uses a questionnaire to learn about its customers’ unique preferences regarding lighting, music and more. These preferences are then used to personalise the experiences of returning shoppers.
- Consumers can head to unmanned Amazon Go stores to shop entirely contact free, while Amazon’s voice-controlled Alexa can be used to pay for petrol at select US stations.
- Shopline, an ecommerce platform in China, opened a physical store to provide DTC vendors with a way to reach traditional brick-and-mortar shoppers via live streams.
As businesses get smarter, leaner and more efficient, the role of in-store automation is predicted to grow. Many retailers will turn to robots for simple tasks like stock replenishment, freeing up employees to concentrate on their customers.
3. Shoppers expect next-level service
As more and more customers moved online, their expectations for service changed. Convenience, immediacy and personalisation became crucial concerns for retailers trying to keep pace with the digital experience.
- Walmart reported a 4x increase in shoppers choosing delivery or pickup options, and McKinsey reported that 75% of US consumers changed their shopping behaviour during the health crisis.
- In a Simplr survey from October of 2020, nearly 60% of consumers said that the most important aspect of customer service is response time.
- The growth of subscription services extended beyond the grocery industry, as shown by BarkBox, who used personalised messaging to reach pet owners. One projection shows that 75% of D2C brands will offer subscription services by 2023.
It’s clear that there will be no return to pre-pandemic customer expectations, and the bar for exceptional service will only get higher.
4. Social responsibility is no longer optional
Duelling economic and health crises shone a stark spotlight on inequality, making it imperative for businesses to safeguard their employees and focus on social justice and environmental responsibility.
- Lowe’s provided their employees, communities and first responders with over $1 billion in assistance, in addition to establishing Making it With Lowe’s, a programme set up to assist diverse small business owners with getting their products on the shelves.
- H&M and IKEA focused on “green recovery”, promoting a post-Covid business model that would drive economic recovery through environmental investment.
- Pharmacies are investing in tech to prepare for their major role in vaccine distribution strategies, especially in America, as stores like Walgreens are within 8 km of 80% of the US population.
For many of today’s consumers, a brand’s ethics are just as important as its products or services, and many won’t do businesses with companies that don’t share the same values. For retailers, focusing on social, economic and environmental responsibility isn’t just an opportunity to build a better world; it’s a chance to build better relationships with their customers.
What’s next for retail?
To paraphrase William Gibson, the future of retail is already here – it just isn’t evenly distributed. Some retailers were able to quickly pivot to online and D2C strategies to navigate crisis, while others went further, establishing unmanned shops and ghost distribution centres.
Virtual experiences boomed, subscription services brought the world to our door, and big brands turned to social initiatives to build a better tomorrow. In the shadows of these innovators sat the old guard, suddenly forced to accelerate long-term digital transformation strategies in a matter of weeks or months, but growing stronger in the process.
Stores have been reimagined, as has the customer experience, and the long journey towards more meaningful engagement has begun.
To learn more about what Salesforce had to say at the 2021 NRF Big Show, check out this webinar where we share the main Salesforce announcements, highlights, latest technology innovation, incredible customer stories (Starbucks, Fanatics, Sally Beauty) and insights.
Don’t miss our newest addition; a Salesforce Loyalty management service for B2B, B2C companies enabling businesses to deliver a connected loyalty experience across the entire customer journey.