2020 has been a difficult and quite unprecedented year for most in the retail business. Like almost everyone else I am glad to see the end of the year is finally here. We can look forward hopefully to a better year ahead. Notwithstanding the news of a new strain of virus, people are generally optimistic that the worst is behind us. We can hope more businesses and activities will open and the economy in general will begin its way back to Pre-COVID levels. Retail business has been one of the worst affected by the many lockdowns and restrictions. As 2021 begins what can retailers expect in the coming year? I share some of my thoughts with you.
1. Offline retail isn’t dead yet:
I was at the hypermarket in the local mall yesterday and was surprised to see the large number of shoppers who were not just window shopping. While the number of people shopping for products online has increased, offline retail is slowly picking up. We have all seen the pictures of crowds in the markets during the Diwali or Christmas. These are ample proof that people will step out to shop if they need to, whether there is a pandemic or not. Beyond that is a dangerous sense of weariness that is setting into people in general. The wedding season has started and shops should begin seeing an increase in footfalls. So should restaurants and other places to eat.
2. Cross-channel customer engagement will increase :
Like almost everyone else I spend quite some time on my laptop or smartphone browsing, checking my emails, going through social media or just reading the news. I come across many ads, some of which are for the same brand. What is surprising is that in most cases I see the same ad, for the same brand in different places. The technology exists to customize messages to shape a customer’s journey through the marketing funnel. However, very few brands use employ it. It has been established that customers engage better with messages when they are part of a cross-channel plan. I expect in the coming year more brands will begin synchronizing communication across different channels.
3. Customer Experience will be key:
There must be at least a few retail businesses I haven’t returned to because I had a poor experience dealing with them. While customer sentiment will improve, sales will still be slow to begin with. If customer experience was important before, it will become vital now. Brands that provide a superlative customer experience will stand a greater chance of business than brands that do not focus on customer experience. The focus will be on personalization of customer experience. Brands will begin to provide a seamless CX across platforms, tailored to the specific preferences of customers. Again, the technology exists but few companies utilize it.
4. Retaining customers is important :
I am on the loyalty programme of at least a dozen retailers, both offline and online. However, most of them just send me messages with general offers on products that I have no interest in buying. It surprises me why these retailers do nothing with the data they have on customers to send them personalized messages with offers on products they might like. The pandemic has brought rapid changes in customer preferences and brands will have to keep track of data, know what customers like or don’t like and provide them with solutions that are to their preference.
5. Going digital is not a matter of choice anymore:
In the last 8-10 years of my career, I have often recommended a digital presence to companies, either for e-commerce or for marketing. However, it is only in the last few months or so that clients have started looking at social media marketing, SEO, Google Adwords or e-commerce seriously as their main marketing activity. Ad spend on digital media is fast catching up with conventional media. In 2021, that gap will reduce further. TV ad spends will still remain high but much of the print advertising budgets will shift to digital.
Payment channels: Most of my smaller purchases these days are settled using UPI. The convenience and the contactless nature of the transaction are attractive. Even businesses, such as supermarkets, which did not offer UPI payment solutions earlier, do so today. In 2021, new payment channels will become prevalent such as WhatsApp, Samsung Pay or Apple Pay. For businesses, offering more payment channels will open up a wider customer base.
The coming year is both a year of challenges and a year of opportunities. The retail businesses that best understand their customers are geared to serve them will be the ones that come out most successful.
