Transform or die: Why the move to digital is critical for retailers to survive
Retailers have been hit hard by Coronavirus trade restrictions, none more so than those without a digital presence. However, it would be naive to hope everything will go back to normal after the virus has stopped circulating. For better or worse, 2020 has changed the retail landscape for good, especially given the rapid shifts in economic landscapes across South-East Asia.
For instance, according to the Singapore Ministry of Trade and Industry, Singapore’s economy is expected to shrink by between 4 per cent and 7 per cent this year, as the Southeast Asian economy registered a 0.7 per cent contraction in the first quarter from a year ago.
Retailers have borne the brunt of much of this, having to cease trading during periods of closure. It’s likely there will continue to be rolling restrictions in 2021, even after a vaccine is found. The fact is, in the current climate, digital is not a ‘nice to have’; it’s a must have if retailers are to survive.
Life after COVID – digital is key
‘Digital first’ will be the strategy for those businesses looking to trade through the remainder of 2020 and into 2021, not only from a sales perspective but also for finding business efficiencies.
It would be fair to say, before this year, retailers concentrating on a physical experience perhaps did not examine their online user experience too closely. Now, user experience across digital must be tested and refined to keep the attention and spend of the fickle consumer. The customer journey between ‘initial interest’ and ‘eventual purchase’ must be optimized to be achieved with as few clicks and in as little time as possible.
This means personalizing online offerings, serving up items customers might like based on previous purchases. It also means offering a variety of transactional features that make virtual shopping interactions as easy as possible, for instance, payment options, easy, fast (and free) shipping, swift exchanges and returns, as well as instant online customer service to resolve any issues.
Customers may abandon carts when they are hit with unexpected costs such as high shipping fees, or find out the item they wanted is out of stock, or if the purchase journey is too slow. Discovering where churn occurs and what pain points are causing online consumers to drop off, and swiftly solving these issues, can mean the difference between staying in operation or struggling now and beyond the pandemic.
Who is getting it right?
A great example of digital transformation in retail driving success is the Australian fashion retailer, Aje. Despite being in operation for over a decade, the brand realized it needed to further harness the potential of the virtual retail environment, particularly for its digitally-savvy customers, who often do research online before visiting a store.
While over 75 per cent of Aje’s customers were engaging with the brand on their mobile devices, its mobile site wasn’t wholly optimized, and payment types weren’t always working well on its digital platforms. Aje re-platformed to Shopify Plus and they worked collaboratively to identify all the things the site needed to do and optimize where the old site wasn’t performing in relation to sales or the customer experience.
In just a few weeks, Aje saw its conversion rate increase by 135 per cent, its bounce rate also reduced, pages per session increased, and its average session duration also increased. Simply by optimizing its user experience, Aje boosted its sales.
Omnichannel experiences and the future of retail
It’s important to remember those businesses with an existing digital presence who were able to pivot swiftly upon the closure of the store are the ones who stayed in operation in 2020. Insight into supply chains and processes offered by digital platforms provides retailers with agility, along with the ability to automate some processes to increase efficiency and reduce costs in many cases.
It’s also important to note that in order to drive online retail success, simply ‘having a website’ is not enough. Retailers have to have a truly omnichannel strategy, uniting experience across websites, physical stores, social networks, and sales events to ensure they attract, and retain, the consumer’s attention in a cohesive way.
Facilitating the myriad of customer needs across these channels is important as well. Most customers will research the product before making a purchase decision. They may visit a store, read reviews, purchase later online, or purchase in-store but track delivery online. In essence, the linear customer journey is no longer the norm. Therefore, basic customer service requirements such as online returns and exchange, online ‘try on’, same-day delivery, in-store purchase with delivery, and immediate advice and assistance are all vital for trading moving forward.
As an example, with Shopify POS (point of sale) helping run its omnichannel business, Allbirds enjoyed increased conversions using ‘buy in store, ship to customer technology’. It implemented smarter inventory management, allowing it to keep less stock in store which required less retail space to operate – and the use of up to 18 Shopify POS systems in each Allbirds store at once to check out customers fast.
Allbirds leveraged its customer data to enable a smooth shopping experience, but it also used an innovative tool to inform inventory decisions, and also help convert in-person customers when their desired products weren’t available for immediate purchase in-store.
Keeping the retail industry robust needs innovation
The great news is, retail can enjoy a new and exciting resurgence with the right digital platforms and investment into innovation. By moving to a smart and intuitive e-commerce platform, retailers can scale up or down, gather customer data, offer immediate customer service and advice, and even use the power of augmented reality to enhance the online customer experience.
Even traditional consumer brands are overhauling their sales strategies to now sell direct to the consumer (DTC). Lindt opened its first DTC store in five days, and Heinz opened its DTC store in just seven days amidst COVID to ensure operation in 2020.
By making a retail strategy digital-first, brands are in an excellent position to not only take advantage of big sales events to finish strongly in 2020 but also find efficiency and have the agility to scale up or down as the market dictates.
Discover how Shopify Plus, can help kickstart the right strategy and systems for your retail brand to make 2021 a success.