The coronavirus pandemic has convinced the minds of a number of CEOs that what is actually happening was going to happen in the future. Retail has been hit badly.
“The retail industry was already on course for a huge shake up and with lockdown forcing the closure of shopping centres and retail stores the industry has been forced to act.”
In the US, analysts at Coresight Research which tracks retail closures projected that about 25% of America’s malls would disappear within the next three to five years. That could rise to as many as 50% “if we can’t stop the bleeding,” Coresight CEO Deborah Weinswig said in an interview.
The coronavirus pandemic caused a huge shift in consumer behaviour. According to Australia Post, 5.2 million Australians shopped online in April, an increase of 31% compared to 2019. The closure of shopping centres and retail stores highlighted the vast gap between the physical in store experience and the online experience and how disconnected the two functions are.
The fallout was that many retailers were unable to trade during the pandemic. They had products sitting in stores that they couldn’t show online, putting their businesses at risk and providing their customers with the perfect excuse to explore other products and brands.
Slessor, who has worked with hundreds of retailers and property groups globally to develop their digital strategies and drive higher conversions through connection, details why a physical store and an online website need to be seamless.
The customer journey is broken
“It was no secret that physical retail was in trouble long before the pandemic began, challenged by Amazon and an increasing number of e-commerce players. Many retailers have used COVID-19 as the perfect storm to rationalise their business, but the fundamental reason for the demise of retail is the result of a disjointed customer experience. The customer journey is complex and erratic, spanning across multiple channels and devices,” said Slessor.
“The challenge for retail and shopping centres is to shift their business from one of multiple siloed channels to an omnichannel experience that is seamlessly integrated. This requires a cultural shift in the organisation and rethinking the digital to physical store experience.
“The typical journey to purchase starts with Google (in fact 81% percent of shoppers research on google before they buy). Often the journey breaks at this point, with most retailers unable to show customers what is actually available in their local store, or allow them to purchase before their visit. Customers have put up with this subpar experience for years but now, in a time where customers have shifted to a safety first, crowd adverse and convenience is king mentality, this is no longer an option.”
A seamless customer experience
To provide a seamless customer experience retailers and shopping centres need to work together to:
- Give customers what they want, in the moment that they want it (for example, being able to show what is in store is critical).
- Provide customers with contactless services and the ability to connect to humans using technology for instance contactless payments and concierge type services.
- Enable customers to choose how they complete their journey through services such as click and collect, drive through or uber style delivery.
“This holistic experience has been implemented by Bunnings, recently named the most popular retail outlet since lockdown started based on search data. They reported a 19.2% sales growth for June quarter. Bunnings has a lot going for it – a great range of products and it was considered an essential service during lockdown in an environment that lent itself to home renovations – but a major element of its success was a superior omnichannel experience. Customers can browse, check stock at their local store, buy online, click and collect or drive through,” she said.
“Providing omnichannel experiences impacts the bottom line. Omnichannel customers spend 4% more in store and 10% more online than single-channel customers. For every additional channel they use, customers spend more money. Sadly, only 29% of us say that we get a consistent customer experience across all channels.”
A cultural shift is required
“The challenge for retail leaders and shopping centres in this environment is to use the coronavirus pandemic to drive innovation at pace; to openly challenge a model that hasn’t changed for hundreds of years, to be comfortable with making mistakes and to be willing to invest in a future that has been thrust upon this. This requires steering away from bureaucracy and roadblocks and breaking down internal silos,” Slessor said.
“The retailers that move to providing a unified journey, where the physical and online store are seen as one and the same to the customer, where customers can switch channels, location and social media platforms but still receive the same level of service will be the retailers that survive and thrive. The ones that don’t won’t.”