Guest Column | July 19, 2021

Responding To 5 Key Trends In The Post-Covid Retail Landscape

By Johan Liljeros, Avensia

COVID Yes we are open

The retail sector and consumer trends are constantly evolving, but this scenario has been accelerated during the past year as the coronavirus pandemic changed the world. For retailers, the past year has felt like a lifetime as they struggled to adapt to the upheaval. A year into the pandemic and the need for agility is essential as responding to key trends that are dominating the post-Covid retail eCommerce landscape demonstrate why a Modern Commerce framework approach is crucial for retailers to stay one step ahead.

Trend # 1: Superfast Hyper-Convenience

E-tailers have been focused on speeding up delivery, moving from up to a week to two days to one day from ordering and, finally, having the order ready for curbside pickup in a moment. The coronavirus pandemic has played a role in fueling this trend. With physical shopping channels shuttered for large periods of the past 12 months, consumers had to move their shopping online, and delivery expectations became heightened. As such, superfast delivery has become a vital offering, especially for many retailers, even outside of the grocery business.

As eCommerce looks to address an expanded array of customer journeys and offer greater convenience, on-demand delivery is a growing trend. For on-demand delivery to be cost-effective, it needs to be focused. For retailers, this means they need to prioritize popular and common products rather than trying to offer everything they sell on-demand.

Trend #2: Mass Micro-Fulfilment

Micro-fulfilment helps retailers address the last-mile logistics challenge by placing small-scale warehouses (or having the ability to use the retail store as a distribution point) in locations that are close to end customers.

Many retailers turned to micro-fulfillment out of necessity during the pandemic by using stores that were forced to temporarily close to the public as ‘dark stores’ for fulfilling the new influx of eCommerce orders. Now that retailers have this proof-of-concept, post-Covid retailing is seeing micro-fulfillment becoming more formalized. At present, it’s a largely manual operation using existing store stock, heavily reliant on the physical store’s inventory precision. But retailers are now looking to maximize the benefits with improved and more automation, as well as precision inventory.

There’s also a sustainability benefit to omni-channel retailing when using micro-fulfillment. With sustainability a growing concern for many shoppers, particularly in the Millennial and Generation Z age groups, micro-fulfillment is one way retailers can improve their sustainability credentials and service levels at the same time.

Trend #3: The Unmanned Store

Automated retail will be a key component of future modern commerce. A store where customers can walk in, take what they want, walk out, and be automatically charged ticks a lot of those boxes. Perhaps the most famous example is Amazon’s Go stores featuring its “Just Walk Out” technology.

Automated retail technology enables retail stores to be placed in locations that they couldn’t feasibly have been before. This is because automated retail can fit into small-footprint, self-contained stores that can be situated within locales ranging from car parks to office buildings to sporting venues.

Unmanned retail also offers a cost-effective way of bringing essential retail to remote and low-population density areas that are currently unserved.

The technology that makes this possible is also used to increase throughput and service in manned stores. Self-checkout is common in some industries (e.g. grocery stores) in many parts of the world. One store associate is monitoring eight to 12 checkout stations resulting in much higher throughput.

Trend #4: Experience Everywhere

In an omni-channel retail world, experience needs to be everywhere and there are several ways that forward-thinking retailers are addressing this. Some are bringing the store experience to the customer via mobile mini-stores, such as the one operated by Louis Vuitton.

The store, which is roughly the size of a small caravan, can be driven directly to the consumer’s home, allowing them to shop a curated selection of Louis Vuitton wares from their driveway. The mobile space is designed to offer the same luxurious experience that customers can expect when visiting a Louis Vuitton store, including expert staff and beautiful packaging of purchases. Notably, if a person is a repeat Louis Vuitton customer, the products in the space are all specially chosen to the customer’s taste and size. It is an entirely personalized experience that is centered on the customer as an individual.

Community building is another way that digital can help support an optimal brand experience. We already see this happening naturally on social media as individuals curate their feeds by choosing who or what they follow, engage in comments and discussions, and join groups.

Brands, of course, need to translate what experience means in their industry. For example, self-checkout and curbside pickup at Target is a convenient experience for consumers. But for Louis Vuitton, experience means something completely different.

Trend #5: The New Normal Customer Behaviors

The COVID-19 pandemic will likely continue to have an impact for some time.

At a basic level, retailers need to provide shoppers with more certainty regarding what they will find in store when they visit. This includes letting consumers check what’s in stock online before they arrive at the store. This is the very basis of omni-channel today and not providing store insights like this, will push shoppers away from the store as well as other channels, and the brand as no one wants a wasted journey and will definitely not re-experience it.

Touchless technology also will be an ongoing factor. This includes the unmanned store as already mentioned, but also other experience-enhancing offerings such as virtual queuing. This doesn’t just work in times of social distancing and reduced capacities.

For the same reason, we are likely to see retailers continuing to offer bookable shopping appointments, either in-person or as video session where the interaction and transaction are done over video with a store associate/product expert. This will especially be the case in retail sectors such as luxury, but also in sectors that have greater customer support needs, such as electronics. With the right technology, it is possible to keep the customer in the funnel even with moving between channels.

As part of the omni-channel ecosystem, the store also will need to function as a broader fulfillment point. This means not only serving those shopping in-person but also being used as a mini-warehouse for online deliveries. One advantage of this approach is that it results in a single supply chain for the retailer. This makes it easier to have a complete view of the business and to optimize as needed.

Adapting To Change With Modern Commerce

It’s easy to shelve innovation in times of difficulty in favor of cutting costs, but this is a short-sighted approach. Retailers who innovate only when their hand is forced are by nature reactive businesses. Savvy retailers act through innovation and are ready to change the way they do business to adapt quickly and cost-effectively.

They do this through a Modern Commerce approach to drive the right experience, right context, and right timing. A Modern Commerce approach embraces composable commerce, which refers to the way the solutions are set up: Separate building blocks and best-of-breed applications -- all with different business capabilities to suit that specific channel or market.

When retailers build their commerce solution using a composable approach, they have unlimited flexibility to adapt for markets, channels, and growth. Brands can add the building blocks that suit the experience they want to offer in the best possible way, ranging from AI personalization and experimentation, search, recommendations, data insights, and other components. This makes it possible to innovate, fail fast, take risks, push boundaries, and align the business according to shifts in customer behavior -- all while maintaining perfect performance, speed, and quality. 

Change is the only constant, whether it be customer behavior, new technologies, or new tastes and trends. Retailers embracing a Modern Commerce approach can stay one step ahead and ready for whatever is next.

About The Author

Johan Liljeros is General Manager and Senior Commerce Advisor, North America, at Avensia. Through a combination of technical and strategic business expertise, Avensia helps B2C and B2B customers accelerate their growth and become even more successful in their day-to-day business through next-level digital commerce.