The Covid-19 outbreak is accelerating digital transformation for retailers as priorities are reexamined.
According to the new CB Insights Report retailers’ operations are in upheaval in the developed world. The coronavirus crisis has resulted in store closures, shorter hours, and slower shipping speeds — but also, in some cases, hiring, bonuses, and pay raises. The Report indicates that this monumental disruption is simply driving the pace of digital transformation which was already well underway before the pandemic. Trends that may have been on retailers’ radar in the medium term are suddenly critical right now. For example, average daily downloads for the top online grocery apps are popular as new users try out delivery and other low-contact services. Beauty brands’ interest in virtual try-on tools like augmented reality has intensified as well. Retailers, meanwhile, have had the chance to take a closer look at any technology that will further automate their stores.
With temporary store closures and social distancing measures, ecommerce is now a bigger part of many shoppers’ retail plans. Online grocery will boost retailers’ interest in micro-fulfilment centres to make fulfilling orders more profitable. Autonomous delivery will look more attractive, though this requires a fair amount of investment to get up and running in the US. Experience-driven retailers will lean on low-investment online engagement like Livestream shopping. Immersive product content and virtual stores are drawing attention but will require more investment in an efficiency-focused world. At the store, profits will be in sharp focus after the pandemic and retailers will look for technology that automates the store, including AI for inventory management, robot associates, and cashier-less checkout.
In the absence of in-person experiences, consumers are focusing on the essentials. These will range from games to products that have become more necessary for home life, like tech for kids.
Wellness will remain a priority, but consumers will focus more on necessities, such as skincare or grooming. With gyms closed, consumers are taking advantage of more at-home fitness tech to maintain physical fitness; sleep tech and other wearables could also see a boost. Gaming’s virtual worlds have attracted renewed attention as consumers look for new ways to engage with people from within their own homes. Communication will have to be even more precise to reach consumers who are farther away. Loyalty startups that make engagement more personalised will help brands and retailers remain connected. Ecommerce’s importance means more sophisticated advertising tech will also be crucial. Connected “products-as-a-service“ will also help brands stay in touch with (and learn about) consumers at home. Virtual one-on-one consultations for categories like beauty will provide shopper engagement that is more personalized than AI-driven quizzes (and also has the potential to help keep people employed).
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