Digital Transformation is Reshaping the Retail Landscape
In recent weeks, consumer habits and retail trends have drastically shifted. Most of North America's population is on a stay at home order, and most retail shops have closed. Models are conducting photo shoots in their apartments, grocery delivery apps are gaining popularity, workflows are going digital, and ecommerce dominating retail sales all point to how retail is going through a digital transformation at hyperspeed.
According to online surveys conducted in March and April by Engine Insights, online shopping has increased 74% since March 13 in response to the Coronavirus. This ecommerce boom has been spurred by necessity that has encouraged shoppers who previously may have avoided ecommerce to suddenly embrace it.
It’s difficult to pinpoint how consumers will respond to the reopening of brick-and-mortar stores in the coming weeks and months. While some consumers might revert back to their pre-pandemic shopping habits, it’s expected that others will feel hesitant about going into public spaces, for fear of risking infection.
Other consumers might stick with ecommerce simply because it’s now become a habit. Either way, one thing looks certain: this pandemic is fundamentally shifting consumer behaviour in a way that could permanently increase reliance on ecommerce.
The growth of ecommerce during Coronavirus has brought with it new trends. Read on to learn about some of the major changes that have emerged since the beginning of this crisis. We’ll look at how these changes are trending, their current relevance, and we’ll explore the burning question: if ecommerce is here to stay, which of these retail trends are here to stay with it, post-pandemic?
We’re seeing brand marketing evolve.
With social distancing keeping most people at home, we’re seeing major shifts in behavioural and consumer trends. Consumer priorities have become centred around basic needs, as well as products and services that support a comfortable and healthy home life.
A shift in the average shopper profile means that marketing efforts are shifting as well. Brands now need to find ways to connect with quarantined consumers, and much of that connection revolves around relatability.
Social media has always been a great platform for connecting brands and audiences, and with shoppers spending more time on the apps while they social distance at home, this is more true than ever. But, merchants have realized that right now, social media isn’t all about ad revenue and conversions.
Instead, social media has emerged as a place for online conversations, styling games, challenges, contests, cooking tutorials, fitness classes, and more. Brands are using their platforms to share content and promote engagement that makes followers feel like they’re part of a community.
It doesn’t make sense any more for clothing brands, for example, to share images of their streetwear being worn actually on the street. Instead, clothing brands are reflecting the new normal by sharing images of their products worn at home.
Take a look at Anine Bing’s Instagram feed and you’ll see the evolution of a feed filled with the luxury clothing company’s founder, Anine Bing herself, wearing her clothing line on the streets of Los Angeles, to images of Anine modeling items from her living room.
Similarly, brands like Zara and Urban Planet have drawn on social media influencers to show off the retailers’ spring and summer lines from their own homes. By leaning into influencer marketing, these brands are delivering relevant and consistent messaging that reflects the reality of most quarantined North Americans today.
Creating relatable content has changed, but where brands share that content with consumers has shifted as well. While paid ads on channels like Instagram and Google continue to deliver results, a new channel has emerged in recent weeks as a notable social media platform with the potential for not just brand awareness, but sales.
TikTok is one of the fastest growing social media platforms in the world, with over 800 million active users worldwide. During the pandemic, it’s popularity has grown so rapidly that the app is now testing call-to-action buttons for influencer’s videos, which further positions the app as an advertising platform. And brands have taken note of this: More and more brands are adding TikTok to their marketing strategies by building a presence on the app.
The key for brands on TikTok is content marketing. Brands should be using the app to share with their audience the lifestyle associated with their brand, behind the scenes footage, product demos, and other content that builds brand awareness.
This is what ties TikTok back to the importance of relatability. Users love TikTok because it democratizes the content that users see, meaning that the algorithm shows a variety of content from viral to videos with low view counts. TikTok is not an app full of curated and face-tuned images, it’s “real” people. This element of relatability might be why the app is doing so well, especially during this health crisis.
The importance of relatable marketing was known long before the pandemic hit, with research showing that Gen Z and Millennials especially value brands that put effort into connecting with their consumers. And with the sudden growth of ecommerce and consumers staying at home, it is more important than ever for brands to tap into the relatability factor when marketing to their audiences.
Alternative delivery and payment options.
Alongside the ecommerce boom, we’re seeing alternative delivery and payment options rise in popularity. Stuck-at-home consumers have been more willing to embrace not just ecommerce, but ecommerce practices like “buy online, pick up in store” (BOPIS), curb-side pickup, and “buy now pay later” (BNPL).
The sudden popularity of these practices can of course be attributed to necessity. BOPIS and curb-side pick up lend well to social distancing, and BNPL is a welcome solution for shoppers who are sticking to budgets during tough economic times.
Looking forward, it’s clear that social distancing measures will stay in place even as public spaces reopen, which suggests that BOPIS and curb-side pickups especially are more than just a trend. Once a new practice becomes habitual for people, they tend to stick with it, and so it’s likely that BOPIS, curb-side pickup and BNPL will remain common post-pandemic.
Let’s break down these three practices:
According to reports, since 2014 there’s been a 62% surge in BOPIS. The practice has been around for a while, but in recent years has become more accurate and efficient thanks to digital tools.
The concept of BOPIS is self-explanatory. It allows shoppers to make a purchase through a brand’s ecommerce site, but pick up that purchase in the store. It’s this convergence of ecommerce and the brick-and-mortar store that makes BOPIS so innovative.
BOPIS creates another touchpoint following an online purchase - because when that shopper goes to the physical store, they’ll interact with the brand further. There’s the potential of building brand awareness and trust through in-person interaction, and there’s the potential to make another sale.
The Shopify app store offers various apps to enable BOPIS functionality, but for more complex stores the function can also be built as an integration. Diff, for example, has built BOPIS solutions for both Urban Planet and Wild Fork Foods.
Right now, of course, entering stores for the “pick up” part of BOPIS isn’t possible in most of North America. In lieu of that, curb-side pickup has emerged. And it’s exactly what it sounds like. Rather than going into the store to collect an order, a shopper can drive to the store, and have their order brought out to their car.
Curb-side pickup is a great solution for avoiding spending on shipping - for both the consumer and brand. It’s convenient, and it promotes confidence in shoppers. By offering curb-side pickup, brands demonstrate that they care about the health of their employees and their consumers.
There’s an obvious reason why curb-side pickup has gained popularity recently, but it was gaining traction prior to the pandemic as well. Last year, Cowen research predicted that by 2020 some 25% of consumers would opt for curb-side’s time-saving convenience.
BNPL describes a kind of credit payment that allows consumers to purchase products, but pay for them either later, or by instalments. The recent surge in BNPL popularity is likely due to the economic uncertainty that many North Americans are facing, but that doesn’t mean BNPL doesn’t have benefits during stable times, too.
BNPL payment systems are a fantastic way to incentivize conversions because they offer consumers flexibility, and make big ticket purchases more accessible for lower income earners. For less expensive items, BNPL enables shoppers to make purchases that they might not have the money for up front. Furthermore, BNPL has been shown to reduce cart abandonment rates.
All three of these innovations offer an opportunity for retailers to expand their omnichannel presence in a way that enriches their brand in both the digital and physical space. As with all omnichannel strategies, just be sure that the shopping experience is seamless from start to finish.
Looking forward, it’s clear that social distancing measures will stay in place even as public spaces reopen, which suggests that BOPIS,curb-side pickup and BNPLare likely to stick around post-pandemic.
Shopping experiences are going online.
Since the experience of shopping in-store isn’t possible right now, brands are coming up with ways to connect with shoppers virtually instead. To support connecting with consumers, many retailers have innovated strategies for recreating in-store experiences online.
The goal of connecting online isn’t necessarily to generate revenue. Some brands approach virtual connections and experiences as a long-term strategy that aims to build a community that promotes consumer loyalty and trust.
Strategies for bringing shopping experiences online have ranged from hosting virtual fashion shows to scheduling video calls with shoppers to have “virtual shopping appointments.” Let’s explore some of these strategies in detail.
Since the forced cancellations of annual fashion shows around the world, technology that facilitates virtual fashion presentations has emerged as a solution for video based fashion shows and virtual showrooms.
Using 360 degree imagery, virtual showrooms allow for buyers to engage with products and communicate with brands remotely. Holograms and VR technology are helping conceptualize digital catwalks.
This digitization is happening to fashion’s workflows as well. Fashion brands have swiftly embraced 3D design technology as a solution for designing remotely. Using 3D design means designers can work from home, but it’s also been found to be more efficient. Traditional sampling and prototyping of a shirt, for example, can take three months, but 3D design can render a realistic-looking shirt in one day.
In an industry that already faces criticism for it’s unsustainability, the forced embrace of digital solutions, both in the workflow and in presentation of clothing is accelerating the industry's shift to more sustainable practices - and for that reason, they’re likely to become more commonplace.
In April, David’s Bridal launched a program of virtual appointments. The program is designed to give brides the opportunity to meet with a virtual stylist over video call as the first step in their dress-shopping process. Following this, brides can text their virtual stylist to advise on available dresses, measurements, undergarments and other needs.
David’s Bridal isn’t the only brand experimenting with virtual shopping experiences. Suitsupply is now offering a guided virtual shopping experience with live style experts on its website, and jewelry brand Kendra Scott has introduced a virtual try-on tool using augmented reality to enable consumers to test items remotely.
Although these virtual programs have all launched in response to coronavirus store closures, it’s likely that they won’t go anywhere. David’s Bridal, for example, has already confirmed that virtual appointments and texting will likely continue to be on offer because of the convenience that these tools offer consumers.
An acceleration towards digital retail
One thing is certain, and that is that retail’s embrace of digital tools and workflows has been quickly accelerated by Coronavirus-related demand. During lockdown, consumers are becoming more comfortable with trends like engaging with brands through social media, using alternative delivery and payment methods, and having virtual shopping experiences.
By the time stores reopen and a new normal emerges, these new trends will have become not only a habit, but an expectation. Brands need to prepare for this now, taking the steps to evolve into this new digital environment.
What can brands do to begin this embrace of digitization? If you’ve already got your business online, then the next step is to embrace digital content creation and the use of online channels to communicate with your customers. Following that, brands can introduce digital practices like integrating buy online, pick up in store, or hosting virtual shopping sessions. Just be sure that these new practices support your brand’s larger omnichannel strategy.
With brick-and-mortar commerce slowly returning after closures, ecommerce is where brands will see their highest return on investment (ROI). And as consumers adjust to online shopping habits, brands will see long-term benefits as well. By investing efforts into expanding their digital presence and offerings, brands can ensure that customers remain engaged and loyal, online and offline.
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Written by Diff's Marketing Coordinator, Erin Hynes.
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