New shopper behaviours are here to stay

retailers

 

Jean Pierre Lincoln has led retail strategy for global brands, for 25 years. He’s joining us for a free webinar in November and we love you to join us too. Meanwhile, the dreaded Second Wave is here so we asked him what this means for retailers and what are they doing about it. Over to you, JP.

“Whilst some customer habits will return to normal, others have changed forever,” Steve Rowe, CEO Marks & Spencers.

 

Shopper insight has been at the heart of my career in marketing strategy for 20+ years but never have I seen it shift so profoundly and quickly. The biggest single change to the way we shop has been the amazingly rapid adoption of technology. Former Dragons Den panellist and retailer Theo Paphitis believes that Corona has accelerated the transition to digital retail by five years. 

The knock on effect of this digital adoption is that shoppers are looking to technology to make their in-store journey as simple, safe and convenient as their online shop. In fact, 67% of consumers now expect brands and retailers to be more innovative in the way that they use digital technology to enhance experiences and their safety.* 

retailers
*WTC Covid, Commerce and Consumer UK. August 2020

Consumer needs are evolving, almost on a week-to-week basis, and the rapidity of change in shopping behaviour is creating a tidal wave that is threatening to sweep right through the high street. 

And now that second Covid spikes are appearing across the country, and retailers have gained retail resilience to survive, they need to understand how they can address their customers’ changing needs and to adapt rapidly to stay top of the shopping list. 

Let’s consider the core needs of today’s retailer.

1. Serving the anxious consumer

Consumers are looking for retailers to take the lead when it comes to their safety and well-being. According to the GWI Covid19 tracker report, 49% expect retailers to have restrictions on how many people can enter a store, 60% expect regular cleaning/disinfecting and 64 % want to see retailers being rigorous with their social distancing measures.

People expect these safety measures to be in place before returning to public spaces – many are delivered by, or can be supported by, technology.

Restaurants already use checklists to show when tables and other facilities have been cleaned. Retail needs to adopt the same measures to ensure that shoppers feel that their store is on top of Covid and they can shop safely.

We’ve all become used to using QR codes as part of the track and trace programme and ordering food and drink in pubs and restaurants. This simple technology opens up the possibility for retailers to keep shoppers up to date with safety measures and cleaning routines as and when they visit their stores.

Others are creating richer, safer shopping experiences

  • New Zealand’s first virtual shopping mall

In the midst of the COVID-19 pandemic, the town of Whakatāne, on New Zealand’s North Island, created a virtual mall featuring local and regional businesses. Customers can choose to shop online by store or product type,and can purchase from several retailers using only one shopping cart. 

The virtual mall allows retailers and service providers without an online shopping option to develop one. The platform also links shops that already have ecommerce websites to the virtual mall, while retaining a unique domain name and style. 

  • Virtual makeup – how Meitu let you try on without touching

The COVID-19 pandemic has hindered the ability to physically trial products before making a purchase. Chinese beauty tech company Meitu has developed a tool that features a fast and user-friendly program that generates virtual makeup effects in just a minute with over 20 styles and effects to trial. It can also make recommendations based on the user’s facial features.

2. Putting an end to the queue

According to the WTC Covid, Commerce and Consumer Report the average queue time is now 3 minutes. All things considered, that may not seem too unreasonable, but it still means that on average, since lockdown, consumers have wasted 1.5 hours standing in a queue.

55% of consumers said they would welcome the ability to book time slots rather than queue. 

So who’s already doing it?

  • Fairways Markets Skip Check-out App aiding social distancing

In New York, Fairway Markets’ scan-and-go app is helping shoppers practice social distancing by avoiding long lines at checkout. After shoppers download the app, they use their phones to scan product bar codes. When they have finished with their shopping, users scan a special QR code that tells the app they are ready to pay. Around one in twenty transactions is audited after checkout by a store employee, to deter theft

  • Lidl’s WhatsApp Chatbot helps shoppers avoid busy periods

In another attempt to provide a solution for long queues, Lidl has launched a WhatsApp chatbot in Ireland in which customers can converse and find the quietest times at their local stores. Customers can send the chatbot a message on WhatsApp stating the time and day they intend to visit a particular store. Using real-time data and customer transaction numbers, the chatbot will respond with an automated message. 

  • LineScouts “Busy-ness” monitor 

Slovenian digital company LineScouts has developed an app that notifies users of the congestion they can expect at their local store.

LineScouts produces an aggregate ‘busyness score’ based on data from Google and crowd-sourced reports. The queues are then given a traffic light rating – red for very busy, yellow for busy, green for light traffic and purple if there is no data. Users can also help by reporting on the conditions at their local store. 

3. Giving consumers a sense of control

“71% shoppers want to know product availability before purchasing in-store**”

Retailers have seen a surge in demand for core products during lockdown as a result of panic buying and/or stockpiling. The strain on supply chains has meant that products from toilet paper and pain killers to flour and pasta have been unavailable when consumers have wanted to buy them. 

This has led to frustration and disappointment for consumers and a direct consequence of these supply issues is that major brands have been accelerating their D2C capability (Heinz built and launched its E-commerce offer in less than three weeks) in order to circumvent retailers creaking supply chains and go direct to the consumers buying their products.

To counter the clear frustration that shoppers were feeling several rival grocery retailers and supermarkets came together to ride out the increased demand for certain products and manage supply chain concerns. In a remarkable move, Morrisons, Sainsbury’s, Costcutter, Co-op, Tesco, Lidl, Aldi, Waitrose, Marks and Spencer, Iceland, Asda, and Ocado, jointly published an open letter that detailed steps they were all taking to maintain both consumer safety and flow of goods.

With 71% of consumers wanting to know product availability before purchasing online or in-store** the opportunity for innovation is huge.

The solution for retailers is to keep the shopper informed at all times. Providing real-time stock updates, store locator details, pricing information and even the ability to buy and reserve (especially if they are card holders) are ways to prevent shopper disappointment and maintain loyalty 

  • OurStreets pivots app to help retailers and shoppers

OurStreets a micro-mobility and road safety app, has developed a new supplies feature for retailers and shoppers. The ‘Supplies’ section of the app provides relevant and timely local data that’s focused on which supplies are currently available in area retail outlets. Retailers who partner with the app can send official updates on levels of crucial items in stock and, usefully, can send alerts when something is back on the shelves. 

 

4. Delivering value

“Consumers now want messages that move away from ‘we’re here for you’ and more towards ‘here’s how we can help you’ **”

The economic uncertainty and the potential spike in unemployment has meant that shoppers are even more conscious of the pound in their pockets. 

Pre lockdown the use of mobile in store in grocery was relatively low. Only 18% used price comparison tools and 16% got promotional offers sent to their mobile***. The rapid adoption of technology has changed that forever with consumers using digital devices to check out all the latest offers before and during their shop. 

Furthermore, consumers are running the rule over retailers during the lockdown to see which stores understand their needs and which ones are there to support them. 54% of respondents report that sales and deals are the most valuable communications from brands right now.

If retailers deliver real value and are seen to support their customers in these difficult times there is an opportunity to lock them in for the longer term. As a consequence of the outbreak 11% signed up to a supermarket loyalty scheme. The rewards are great if retailers get it right.

  • Walmart are delivering real value transparency

Walmart Savings Catcher is a feature of Walmart’s regular app. After shopping at Walmart, you can use it to scan your receipt and compare prices of some items against competitors’ advertised deals and get the difference back on a Walmart Rewards eGift Card.

5. Contactless commerce

Covid has practically killed off cash forever and the use of contactless commerce will only increase until there is almost universal adoption. 

This is being driven first and foremost by the hygiene and safety factor (51% say this is the primary reason for using contactless payment) but convenience it is also a key to its rapid adoption (49%) ***

Furthermore, online delivery and click and collect have continued to grow exponentially as consumers seek to reduce human contact and look for the most convenient and safe way to get their shopping to their homes.

It’s happening at both ends of the retail spectrum. Now even smaller retailers can offer home delivery…

Amsterdam-based location data and technology platform HERE Technologies is offering SMEs a free tool to help implement its own simplified and efficient delivery service during the COVID-19 pandemic. HERE WeGo Deliver will allow businesses to plan and dispatch a delivery service without paying for software development or implementation costs. Users just upload their order destinations and the number of drivers to the platform, HERE WeGo Deliver then optimises each route and delivery sequence. 

  • Amazon Go. The future of contactless retail 

Another example of contactless commerce is, of course, the Amazon Go concept. They launched their own store to create fanfare, but now their technology is available to white-label for third party stores. 15% of shoppers said that they were excited about stores where you don’t have to queue to pay, like Amazon Go*.

Amazon announced during lockdown that it was opening a number of new stores in the UK. Of all the threats to high street retailers, they remain the largest.

Summary

In 2019 A study by GWI found that 26% of Retail Executives said they were Interested in technology but would wait until cost/technical problems were solved and 53% believed technology did not fit their model/customers.

In 2020, Covid completely changed the landscape forever. Retailers can’t afford to “Wait and See” anymore. 

Some of the examples above show just how quickly companies are making things happen. As we move towards whatever the new “new normal” is, now is the time for retailers to act.

If you’d like to learn more or discuss any of the themes in this article, please join us for a free webinar on Thursday 19th November at 1pm. It’s a 45 minute, lunch-time friendly session where JP will be joined by Apadmi’s Chief Strategy Officer, Marcus Hadfield, to talk more about New shopper behaviours: What are they and where should retailers focus first?

* WTC Covid, Commerce and Consumer UK. August 2020

** Digital commerce 360 Covid Report 

*** GWI COVID-19 Tracker, Wave 4 19,26 May