It’s not just about the products.
When the world was turned on its head as an unstoppable global pandemic unfolded, it caught most by surprise. Healthcare systems were overwhelmed. Schools closed. Businesses shuttered. People stayed home.
The retail industry was no exception. The crisis kicked a trend already on the rise into high gear—online shopping. Our research shows online retail saw 10 years of growth—11%—in a matter of mere months. That’s remarkable, to say the least. But perhaps even more remarkable is where this trend may be headed and what it means for retailers.
The retail world had already been on a trajectory toward online commerce before the COVID-19 crisis. And retailers had to respond—fast. Many were unprepared for the tsunami of activity. Their websites and ecommerce platforms were simply inadequate to deal with the amount of unexpected traffic they experienced. And today, new challenges are emerging as a result of unfolding events. As a result, Accenture research shows that to survive, companies will have to embrace the unknown.
The old rules of engagement are off the table. Customer expectations of even the most basic digital capabilities are completely different. The ways retailers used to operate are all but quaint relics of the past. And now, if you want to survive in this constantly shifting, unpredictable cycle, you must prepare. It’s not enough to be digitally savvy. You’ll have to provide a digital experience that builds strong customer relationships. And, yes, we’ve been saying this for years, but the time is now.
These numbers tell the story:
- One in five people who ordered their last grocery purchase online did so for the first time
- One in three of first-time online grocery customers were aged 56+
- Today, 32% of purchases are online
- New users expect to increase the proportion of online purchases by 10%
- Post-crisis online purchases are expected to be 37% of all purchases
With prolonged—and unexpected—time at home, consumers are emerging as more willing to use digital methods. Consumers who are already digital-savvy are doubling down on their use, while people who once resisted e-commerce are becoming digitally engaged customers. Personally, I never thought curbside pickup would be an option, much less one that I would use. Now, not only do I rely on curbside for grocery shopping and other services, I plan to use it after the pandemic has passed.
The new currency
This new world requires organizations to provide digital engagement rather than simply transactions. Speed will become a source of competitive edge, and sustaining momentum will provide cost advantages.
As the digital world expands—and customer expectations with it—the new currency for retailers will revolve around convenience, ease and accuracy. Companies will have to differentiate themselves with intelligence and empathy. Trust will be more critical than ever.
Trust has always been an important element of digital customer engagement, but COVID-19 has elevated a brand’s true purpose. More than ever, customers are looking to brands they can trust to provide goods and services. They want to engage with companies that make safety a top priority. They’re likely to repeat engagements with brands that performed well under pressure, delivered on their brand promise and put customer and workforce safety ahead of financial priorities. In other words, it has become clear that to survive in a more competitive online environment, brands will need to demonstrate they’ve earned customer trust.
This emphasis on trust has elevated the importance of corporate responsibility. And in many cases, companies are stepping up. Take Costco, for example. In Canada, the warehouse retailer required customers and employees to wear masks long before it became a government mandate. Or Starbucks. In March, as the pandemic was unfolding, the Seattle-based coffee giant announced it would no longer accept customers’ refillable cups. Going one step further, Starbucks said it would honor its 10-cent discount for customers who brought in refillable mugs—but those customers would still be issued a single-use cup.
Elsewhere, retailers have reserved in-person shopping hours for the elderly or pregnant women. Similarly, public parks and zoos have begun requiring reservations to limit capacity and ensure safety. Several Canadian telecom providers waived overage fees for home Internet plans. And utility providers suspended late fees and created new payment assistance programs in light of the COVID-19 crisis.
These types of responses amid a health pandemic align with consumer expectations. An overwhelming number of respondents to our survey—67%—said they expect companies to strengthen their business operations to better respond to future crises. Perhaps more telling, the same percentage of respondents said they expect companies to “build back better” by investing in longer-term, sustainable and fair solutions.
As retailers respond with new products and services and innovative ways of working, responsibility will play a key role in winning—and retaining—customers. To understand and build relationships with consumers, retailers will need to use data-driven insights. They’ll need to explore what motivates consumers—factors like price, payment models, support and experience. They’ll need to develop new business models. And they’ll need to collaborate to offer new products, content, engagement and digital technology while they reconsider the physical locations of their stores.
The pandemic has made the home the hub of all commerce. Among other things, this has forced retailers to rethink their investments in digital and how to maximize their brick-and-mortar assets.
To meet new challenges and continue pleasing customers, retailers should consider:
- Creating closer partnerships with local businesses
- Introducing or increasing value and mid-range brands
- Focusing on broader and holistic health and wellness offerings
- Providing options for shopping digitally to generate loyalty
It’s a new and constantly changing world. Companies need to not only deliver the goods customer want—but do so ethically and responsibly. Customer engagement is as much about building confidence as it is the value of products, services and the organization itself.
Gregor Barry is Accenture’s Canada Lead for Accenture Interactive.