The global pandemic has created huge challenges for the UK retail industry. According to Office for National Statistics, total UK retail sales volumes in 2020 fell by 1.9% compared to 2019, making this the largest annual fall on record.
One year on, we have inarguably seen a massive shift in consumer habits. Social Distancing measures and business closures have significantly disrupted consumer spending habits and has fundamentally changed shopping behaviours. While this has created a wave of uncertainty for the foreseeable future, businesses adapted to new ways of working, engaging swiftly with technology, and embracing the changing ways in which to safely deliver items.
Those who do want to make a purchase are increasingly opting for online retailers. Consumer’s shift to online shopping experienced a dramatic acceleration since the first lockdown came into effect, and online sales rose to a record high of 33.9% as a share of all retail spending.
As we push further on into the year, we still can’t be completely certain what the rest of 2021 will bring. Though, what we are sure of the most, is that the disruption in some capacity will stay. Shopping online has become too convenient, especially for customers who may have been (and still be) reluctant to shop in-store once lockdown restrictions have lifted.
The Impact of Ecommerce in the Retail Sector
Due to an unexpected increase in demand, and 2020’s effect on the high street, the ecommerce industry is flourishing. The final quarter of 2020 drove significant ecommerce sales, spurred on by events including Black Friday, Christmas, and frequent UK Lockdowns. With the UK opening non-essential retailers in mid-April, it’s easy to assume that the pattern will continue as consumers are not anxious to give up the convenience and safety of online shopping.
The UK currently holds the highest adoption of online shopping and by 2030 technology will affect a third of tasks in UK retail. The Covid19 pandemic has only accelerated this shift towards ecommerce platforms and by 2022, e-tail revenues will grow to $6.54 trillion, up from $3.53 trillion in 2019.
For retailers who did not have transactional websites the impact was destructive. All non-essential stores remained shut for the beginning and any hope for a retail recovery was torn. Those with an established, robust digital strategy had been better prepared to react to unpredictive behaviours while others scrambled to upgrade their online presence.
In turn, this means keeping pace is no longer sufficient for success or survival.
Ecommerce businesses that progressively connect with consumers through authenticity and convenience have continued to successfully build trust and retain customer loyalty and will continue to do so as more customers start to favour digital channels.
The growth of internet-based technologies has provided retailers a set of higher customer service capabilities, including dynamic pricing, real-time service, and the ability to provide the consumer personalised offerings, all through the adoption of ecommerce channels.
For the retail industry in particular, the prevailing customer sentiments determine the latest trends that inform decision making, including everything from product design to management, to marketing messages. This means that accurate and up-to-date customer analytics and intent predictions are a key competitive advantage for any organisation that relies on customer loyalty.
Those who are using a data driven approach to find new ways to engage with customers, new opportunities for efficiency, stay ahead of the trend curse, and maximise the cost-effectiveness of their marketing efforts will have a better basis on which to make important business decisions based on the data generated.
Lessons learned in 2020 Can Help Retailers to Survive and Thrive in 2021
If 2020 has made something clear to us, it is that confinement has changed consumer behaviour habits. Even with new measures of safety, hygiene, cleanliness, and health taking place in every retail establishment, as well as the progressive rollout of the vaccine, many consumers will elect to continue doing their shopping online to avoid the risk of infection.
There is a greater need for retailers to meet consumer’s demands to succeed. For many, this has meant that they need to upgrade their online presence, offering online sales channels to compete with others through an unpredictive year.
Retailers must ensure that both digital and in-person channels are seamlessly aligned and recognise that consumers will more than ever expect to connect with a brand through multiple engagement options.
Read this guide for our view on the biggest retail trends emerging in 2021.
Capture What the Customer Wants the Most
Businesses often fail across digital channels as they are not aware of real-time demand and preferences of their customers across omnichannel journeys.
As people change their behaviours, retailers, marketers, salespeople, and customer support reps will need to react fast, as consumers are likely to have multiple touchpoints with a retailer and expect their journey between each touchpoint or channel should be seamless. This means companies will need to pursue one holistic approach – an omnichannel experience that consumers can willingly use anytime and anywhere.
Customers are constantly shifting across buying channels and have an unprecedented number of ways to engage with businesses, from traditional channels to a continuous array of digital practices. Companies that adapt to this can improve their user experience and drive better relationships with their audience across various points of contact. This experience is consistent and unified for every journey the consumer chooses to take.
In the wake of increased online traffic and store closure trends over the years, many traditional retailers are now prioritising omnichannel retailing and leveraging in-store analytics technologies to track, measure and analyse customer activity.
Omnichannel is built on multiple methods of promoting & distributing products. Therefore, improving customer service by providing multiple communication options that offers more flexibility as the consumer can seamlessly switch between channels throughout an interaction, enabling them to further reach out with problems or concerns using multiple channels.
At Data Clarity, we have worked with high-end fashion retailers to develop ClarityOmnivue – a full end-to-end data management and analytics solution that enables retailers to get to know their customers and offer personalised and relevant brand experiences to deliver value.
Gain Value out of Real-Time Data
The key to achieving retail success is to be more data centric. Successful retailers utilise consumer data to provide tailored shopping experiences for individuals, accurately predicting needs and wants right in front of your eyes to suggested purchases and enhancements that collected data says will likely result in a purchase.
To attain real value out of data analytics, retailers need to consider aggregating their data across disparate systems into a single, unified view throughout the organisation. Once in place, retailers will gain true insights which will help plan customer retention strategies, including personalised offers, pricing, and stock decisions.
The retail industry faced massive disruption in 2020 but accelerated digital adoption and alternative opportunities opened to build loyalty with a broader range of new and existing customers. Digital channels have completely changed the way customers interact, but with the right strategy, many businesses can embrace the changes from the past year to unlock growth and retain loyalty.
At Data Clarity, we are on top of the challenges and opportunities this presents for retailers. We conduct data audits for organisations to highlight the current capabilities, strengths, weaknesses, and opportunities.
To discover how you can do more as a business, contact us today.