- The retail world is expected to see an overhaul in a post-Covid world and retailers will need to embrace technology to meet dynamically evolving consumer needs and expectations.
- Beth Ann Kaminkow, the Global Chief Executive Officer of
Geometrywho is recognized as a leader with a proven record of re-imagining retail gives us a sense of how the retail ecosystem will need to evolve.
- She also gives Indian retailers some advice to weather the storm and future-proof their businesses.
Therefore, it is imperative that brands understand the consumer’s evolving needs when it comes to the retail experience and come up with solutions. There will be a growing need for more and more retailers to ensure
We recently had the opportunity of discussing the future of retail with
The future of retail
The pandemic has led to an obvious shift in consumer behavior where people now want to be careful about where they go, what they touch and who they interact with physically. This has already led to a rewriting of most physical experiences.
So how will retail evolve in the future, to make place for the evolving consumer expectations? Kaminkow said, “When we think about what the future holds, we must first look to consumer behavior. It used to take us 40 days to develop a new habit, but this crisis has forced us to adopt new habits overnight.We are witnessing 3 years of digital transformation in 3 months. This massive inflection point will give rise to new models, including across the physical retail space, to value the brand impression, engagement and experience in ways that go beyond sales per square foot/meter. At a basic level, removing friction through integrated technology that will enable a completely different experience:avoiding queues, self-checkout, clean, convenient experiences, endless inventory, delivering personalization, social and instagrammable spaces, building elements of social media and storytelling directly into the merchandising, mirrors, VR AR and more.”
She shared that the key will be to accelerate the push from Online to Offline (O2O) to Online plus Offline (O+O). “Consumers will be looking for more than ‘convenience’ as they expect retailers to offer innovative ways to fulfill their needs in safe and accessible ways,’ she added.
While omni-channel had been a rising trend even before the pandemic, its growth has now been accelerated. However, she shared that it must go one step beyond, to seamlessly link or integrate the consumer journey across multiple channels. “In short, we’ll need to use digital to enhance the consumer experience both online and offline. Omni now also refers to the need within an organization to have a full view of a products route to market from creation to conversion. This recognizes that if a brand can’t be found or is out of stock, that is not just a sales issue, it creates longer term brand equity issue. This elevates the importance of commerce in the marketing and media mix,” explained Kaminkow.
The pandemic has also led to a lot of innovative, out-of-the-box thinking and collaboration with different industries. Retail has seen collaborations with industries lie telecommunications. “Retail is at the forefront of engaging with consumers, therefore collaborating with and leveraging retail data helps other industries better understand their consumers. Not surprisingly, we see an increasing number of mobile transactions, therefore retailers also find themselves collaborating with Telco companies in new ways to solve for the need for the latest technology and faster network speed. Fashion and cosmetic industries have already introduced AR & VR into their marketing efforts. Some restaurants also use those technologies to provide more information about their menus. However, with the current LTE, the speed is still not fast enough for AR/VR. Once 5G is fully operational, more retailers/brands will embrace AR/VR as well as voice enablement,” she added.
Brick & mortar and the new retail experience
With retail being impacted the way it has been, the question now is, will people be unwilling or uncomfortable visiting stores and showrooms for a long time to come now?
Kaminkow doesn’t think that physical stores will lose their importance but rather it’ll need to be ‘reimagined’ to meet a new set of consumer demands, desires and expectations.
“Buying behavior has been altered across the world but there are other socio-economic realities specific to geographies which will impact the path to revival. In certain categories we will definitely see commerce shift online for the foreseeable future, but in other areas we see a resurgence of brick and mortar leading to economic revival. We have already seen signs of this within mom & pop and local grocery. The locations that have adjusted for contactless payment and have a consumer trust built into the shopping experience are thriving,” she said.
The new avatar of physical retail experience will need to be digital-first or said another way, technology-enabled.
The key to getting it right will be to understand what people need from a physical shopping experience to optimize the physical presence. “My predictions, physical store footprints will shrink and new stores openings will be architected much smaller and or in new formats – in many ways addressing the trend over the past few years of physical square footage being as much about the experience than the product, or retail as core to the omnichannel experience. Look at the Fabindia experience center, which has wellness centers as well as separate space allowing customers to interact with consultants on various aspects of health and well-being,” she added.
In such a scenario, brands will need to be open to evolving and evolving fast. And that is where technology will come in.
Speaking about the role it will play in the future of retail, Kaminkow said, “Technology will help re-design shopping experience: such as tech-enabled personalization and data-based recommendation. With so much at stake, when we evaluate the future of retail, there is a lot that needs to change to meet current realities, remain future relevant, and to update to a successful, sustainable models. It starts with brands and retailers being armed with the right tools to leverage data and optimize creative to truly understand today’s consumer’s needs, wants and demands. And, technology plays an important role in creating aunified commerce experience in an omnichannel world.”
She also added that technology provides the capability to get the right product to the right consumer, when they want it, where they want it, how they want it and, now in the safest environment possible. “It’s about how retail will innovate in a low-touch or no-touch economy.This means everything from contactless solutions both in physical retail and digital commerce that will drive new behaviors.Including contactless payments, contactless access to products, safe packaging, contactless delivery, etc.”
Giving the example of what Google has done with GPay in bringing contactless payment solutions to rural areas she added, “Technology opens up the possibility to reimagine retail across physical and digital and to knit those systems and experiences together. This is no longer about building one solution that will last decades. Technology allows for constant and continuous evolution as retail is no longer static online or offline and will need to be a fluid environment and experience reflecting the changes in our lives.”
Another very important facet of the physical retail ecosystem and an important touchpoint for brands is sampling. How will this whole transformation affect that aspect in the future? Kaminkow believes that digital sampling will soon become the new norm. “And when it comes to digital sampling, utilizing immersive tools like AR and VR can present real-life experiences. For physical sampling, we will see more of new packaging and sample station designed to protect the safety of consumers and staff; for example, samples that can be opened with one hand. Subscription boxes delivering sample-sized products can be another option,” she explained.
Challenges for the retail space
While a lot of players have been agile in terms of coming up with solutions to meet evolving consumer needs, there still are challenges that will need to be addressed and solved. On asked what some of these larger challenges are, Kaminkow listed these:
- Dealing with unexpected uncertainties (such as the current pandemic) – as this may lead to further waves
- Building the trust factor with consumers – and serving the constant changing needs of the consumer with speed and quality
- Creating a balance between virtual and physical retail – getting the mix right and ensuring that new routes-to-market expand the business v. cannibalize it
- Ensuring safe shopping environments – sanitization and health will remain important aspects of any physical retail, pickup and delivery solutions
- Creating experiences through restricted yet innovative means – recognizing that brand building in commerce is an essential way to create distinct, ownable relationships with the consumer
- Economic uncertainty and financial concern – job loss and personal fear of financial decline will greatly limit consumer confidence and discretionary spend
While the retail experience around the world has been transforming, Indian retailers have also been quick to react. More and more players are thinking of ways to minimize friction while also coming up with contactless solutions. So what is it that Indian retailers should keep in mind while planning for the future?
“The key will be closely watching the consumer and larger macro-shifts to predict the changing behaviors shaping the future of how people shop and buy. AR in e-commerce is making its presence felt as more and more brands are embracing new ways of creating commerce opportunities as well as dialing up experience and deepening brand engagement,” Kaminkow said.
Traditional retail, which is the backbone of the Indian retail economy will continue to innovate in order to survive, she believes. “Whatsapp for Business and digital payments are creating new opportunities for commerce. Today there are tools that allow these traditional retail stores to modernize inventory and stock management all through a smartphone. Rural markets are embracing voice as a commerce tool. I think the post-Covid world will be phygital - and we will see a mass adoption of digital tools, many of which have been around for a while now. In the grocery and beauty category, we will see new dispensers and other physical devices that allow for smaller quantities to be sold with less wasteful packaging,” she added.