Digital transformation

It’s plain to see that digitalisation is the clear “winner” to come out of the coronavirus pandemic. Although our society and everyday lives have been becoming increasingly digitalised over the past few years, Covid-19 has given digitalisation a major boost, with many aspects of it now being implemented much more quickly, efficiently and effectively.  According to a survey conducted by the German E-Commerce and Distance Selling Association (BEVH) one in two consumers will be shopping online more as a direct result of their experiences during the pandemic.

Retailers are increasingly seeing that their investments in digital infrastructure are paying off. It goes without saying that e-commerce and online retail brings a number of challenges for bricks-and-mortar retailers, but also opens up exciting new opportunities, too. Due to the numerous restrictions that the lockdowns have brought, the importance of offerings such as click and collect, cash-free payment and multichannel systems have become increasingly important.

Solutions like click and collect that allow shoppers to pick up their online purchases from a physical store will continue to enjoy their new-found popularity in 2021. Implementing such a BOPIS (buy online, pick up in-store) strategy helps bricks and mortar retailers to stake a continued claim as an important part of the logistics chain. The combination of online and offline retail will increase enormously thanks to the digital formats that we are already seeing – and actively shaping through our behaviour as consumers.

Fuelled by the lockdowns caused by the pandemic, lots of retailers have been putting omnichannel concepts through their paces.

A 2020 consumer survey conducted by Accenture confirmed this trend, revealing that the majority of respondents want to go on using services such as home delivery, click and collect and making purchases on social media platforms in future. Click and collect appears to be particularly popular among younger consumers. One  of the questions in the survey revealed that 11 percent of respondents had used this service since the outbreak of the coronavirus pandemic. And the numbers are even higher for younger people. The appeal of systems like this are obvious: in a lockdown scenario people still want to get their hands on what they need and what they would have picked up from the store under any other circumstances.

The study also showed that retailers can win over customers with quick, free delivery and by making local deliveries. By contrast, long shipping times, additional postage and packaging costs and out of stock items were among the negative aspects cited by respondents. Quick delivery and short waits were a must for younger customers.

As online purchases are bought and paid for on the internet, they also mean shoppers no longer have to inconvenience themselves with cash. Perhaps inevitably, cash free payment methods have gained a lot of ground during the pandemic. While some  retailers had only been making tentative steps towards introducing cashless options, their mindset has since changed thanks in no small measure to the Covid-19 pandemic, and now the entire payment process is increasingly moving away from cash, towards payment by card – including in stores.

Regional before global

Supply bottlenecks and reliance on international producers has proved to be a real issue during the pandemic. This has culminated in growing calls for products to be sourced locally – from both consumers and retailers. One  survey showed that 23 percent of customers shopped at smaller stores during the coronavirus pandemic specifically to support local businesses, reward good customer service and rediscover a more personal shopping experience.

Thanks to recommendations from family members, friends and neighbours, as well as countless initiatives on social media, regional and local retailers have been in the spotlight. People are actively looking to show their support for businesses in their area while pushing back on international supply chains and multinational behemoths. A consumer survey conducted by  Accenture in 2020 revealed the depth of feeling: around half of respondents indicated that they had shopped in local stores and bought products from the local region. Around 80% said that they would continue to do so after the pandemic is over.

Paradigm shift

The oft-touted paradigm shift towards a more sustainable approach to consumption – something seen in the retail sector for a long time, and a subject often covered by this blog – has gathered speed as a direct consequence of the Covid-19 crisis. Spurred on by climate activism and the issues highlighted by the likes of Greta Thunberg, consumers now have an increasingly awareness of social, cultural and ecological issues which is leading to a clear shift in consumer behaviour. People are now shopping more carefully and more cost-consciously, and demand for local and sustainable brands is on the rise. And this is one of the trends that is set to stay with us in 2021. Many consumers are also using the hiatus enforced by the pandemic for a fundamental rethink of their own behaviour.

A number of retailers and brands have shown greater awareness of their social responsibilities during the crisis. Faced with closed premises and a shift in customer attitudes, many businesses have had to look for alternative revenue streams, while also striking on ways to help people in crisis. Textile manufacturer Wolford has started producing face coverings and car maker Fiat Chrysler and fashion house Prada is now also making protective equipment for the health care sector. H&M is the latest in line to announce plans to produce and donate PPE for front line workers. Herbal liqueur manufacturer Jägermeister is also getting in on the action, providing a hospital pharmacy with alcohol for disinfectants. Elsewhere, leading sparkling wine producer Henkell Freixenet is donating pure alcohol to pharmaceuticals giant Merck for use in sanitisers and antibacterial cleaning products. Innovation at its best.