Month: April 2020

US store reopenings

Blueprint for US store reopenings revealed

As the US begins to ponder lifting lockdowns, retailers are being urged to prepare to get back to business, with the Retail Industry Leaders Association (RILA) and the National Retail Federation (NRF) this week releasing a blueprint of how they expect the reopening will occur.

Noting retail had been at the forefront of the COVID-19 crisis in terms of both servicing consumers’ essential needs and business shutdowns, the ‘Open For Business’ blueprint explains retailers have been learning from each other and “now is the time to prepare for the entire retail sector to safely re-open”.

“As an industry, we stand ready to assist governors and mayors with the important task of safely re-opening our main streets and storefronts again, with an underlying commitment to helping all families Shop Safe,” RILA and the NRF state.

Here’s a quick snapshot of how they propose going about it…

Step 1 – Contactless

Warehouses and distribution centres are the first places the blueprint suggests retail and government should focus on reopening in a bid to facilitate e-commerce, contactless curbside pickups and in-home delivery.

“In these operations, a limited number of employees are allowed in stores that are closed to the public to fulfil online orders and deliver purchases to customers who drive or walk up, observing appropriate social distancing,” they propose.

Step 2 – Reduced occupancy

US store reopenings

Once the time is deemed right, the blueprint then suggests government and retailers look at reopening stores to the public with strict social distancing, hygiene, and sanitization rules in place along with customer limits.

Proposing protocols for both employees and customers, the blueprint calls on governments to issue clear guidelines and recommends the use of signage.

It also suggests practical measures like contactless payments and six-feet distancing in checkout queues, and between cashiers and customers at checkouts.

The blueprint further recommends store occupancy of no more than 50 per cent and no less than 20 per cent of the maximum capacity according to the relevant fire code, or alternatively thresholds of no more than five customers per 1,000 square feet of total store square footage excluding employees.

Customer education would be a key component of this phase along with increased sanitization of high touch areas, including technology like the Point of Sale. Strict hygiene measures should also be employed, the report notes, such as increased handwashing and the provision of hand sanitizer.

“During this phase, retailers open additional stores to the public with robust health and safety protocols in place to protect customers and employees and to mitigate the spread of the virus so COVID-19 does not revert,” the blueprint states.

Step 3 – Business as new normal

The third and final stage of the reopening plan sees social distancing measures reduced but sanitization and hygiene protocols remain in place.

The report suggests sanitizer should be readily supplied to staff, hands should frequently be washed, high touch areas should regularly be cleaned and any staff who are showing signs of illness should remain at home.

“There is no doubt that even under the most optimistic of scenarios, American families will be adjusting to a “new normal” for some time to come,” the blueprint concludes.

“The entire retail sector is prepared to meet this challenge and give consumers confidence in our ability to safely and warmly welcome them back into our stores. We appreciate the tireless efforts of America’s governors to safeguard our communities throughout this crisis, and we are ready to work together to safely re-open our economy.”

The RILA and NRF “Open for Business – A Blueprint for Shopping Safe” was released on April 27 and is available in full here.

Retail technology gets personal

Retail technology gets personal

A survey of leading retailers has found establishing personalized relationships with consumers is a priority when it comes to technology adoption, while Artificial Intelligence is considered the must-have emerging technology that most retailers intend to soon adopt.

Conducted by Total Retail, the 2020 Retail Technology Report takes a deep-dive into technology trends, buying behaviors, and future opportunities for retailers.

Here’s an insight into what their survey found…

Where most retailers employ tech

According to Total Retail’s survey of over 110 leading retailers, technology is a significant investment for most retailers, with inventory management, order fulfillment and personalised marketing among the sectors which currently command the greatest spend.

When it comes to where retailers currently direct their technology budget, the report found most retailers spent money on the following technology:

  • Inventory management software – 64 per cent
  • Order management system – 58 per cent
  • Order fulfillment software – 48 per cent
  • CRM platform – 45 per cent
  • Content management system – 39 per cent
  • Personalization – 37 per cent
  • Scheduling software – 33 per cent
  • Marketing automation – 30 per cent
  • Security/fraud prevention software – 28 per cent
  • ERP system – 26 per cent
  • Artificial intelligence, chatbots, and machine learning – 19 per cent each
  • Programmatic advertising – 18 per cent
  • Internet of Things – 17 per cent
  • Automated checkout/cashierless stores and RFID – 11 per cent each
  • Visual search – 10 per cent
  • 3D printing – 9 per cent
  • Beacons – 6 per cent
  • Robots, virtual reality, and voice (commerce and/or search) – 5 per cent each
  • Augmented reality – 4 per cent
  • Facial recognition – 2 per cent
  • Blockchain – 1 per cent
  • Drones – 0 per cent

“The technologies that retailers are currently using (and spending on) reflect the omnichannel nature of today’s retail businesses,” the report reflected.

“Systems that can help retailers track inventory and fulfill orders across multiple channels are becoming more critical as consumers engage with brands across a variety of touchpoints, often in a single purchase journey.”

Meanwhile, they note bricks and mortar often harnesses this technology to employ strategic tools like buy online pickup instore (BOPIS) in a bid to improve the customer experience and their omnichannel offering.

Future tech investment a priority

Over the coming months investment into retail technology will remain a priority for most retailers, the report found, with two thirds indicating they will increase their technology expenditure in the 12 months ahead.

Within these organisations, marketing departments are the most likely to see an increase in their technology budget, with a quarter of retailers directing extra funds there.

Meanwhile, 17 per cent of retailers will increase their spend on technology for digital, and 11 per cent will direct extra funds to product development.

Eight per cent of retailers will boost their technology spend on both customer service and the supply chain, seven per cent will increase spending on their omnichannel offering, six per cent will spend money on technology for merchandising, four per cent will increase tech spending in stores, and one per cent will increase their tech budget for human resources.

Tech gets personal

The biggest priority for stores adopting technology is establishing personal relationships with consumers.

In fact the top five areas where retailers are opting to increase their spend in the year ahead by and large relate to personalization.

“Leveraging data and technology to create one-to-one relationships with customers is a top priority for retailers,” the report stated.

“Nearly half of all respondents (48 per cent) identified marketing automation as a technology that they will be increasing spending on in the next 12 months, the top choice among a laundry list of other options.

“Furthermore, personalization technology (43 per cent) and CRM platforms (33 per cent) were also among the top five for spending increases, reflecting retailers desire to use data and tech to better engage with customers and prospects.”

 AI an emerging tech tool of choice

When it comes to emerging technology piquing retailer’s interest, artificial intelligence (AI) is by far the standout.

“Retailers have adopted, or are planning to adopt, artificial intelligence (AI) at a much higher rate than other emerging technologies,” the survey found.

“When asked to choose the emerging technologies that they’re not currently investing in but plan to do so within the next 12 months, 18 per cent of respondents selected AI, the highest of any technology listed.

“Furthermore, nearly one-third of respondents (32 percent) identified AI as the emerging technology that they believe will have the biggest impact on the retail industry within the next 12 months.”

The full report is available at Total Retail.

Retail trends COVID-19

Retail trends accelerated by COVID-19

A surge in touchless self-checkout, contactless payments and of course online retail are among the trends emerging in retail as the US sector grapples with swift change in the wake of COVID-19.

These are just one of the ways the sector is radically transforming, with experts predicting there will be further changes ahead as the retail industry evolves, pivots and adapts to become more resilient.

Here’s a snapshot of just some of the trends being accelerated in retail by COVID-19.

Touchless checkout

According to a recent survey by Shenkel, US consumers are rapidly embracing touchless self-checkouts as two-thirds of customers look to change their shopping habits in the midst of COVID-19.

Their findings indicate 87 per cent of shoppers say they would prefer to shop in stores with touchless or robust self-checkout options while more than two-thirds of consumers are now using self-checkout, touchless self-checkout or frictionless micro-markets to pay for groceries.

The findings further note:

  • Exactly half of consumers are aware of touchless self-checkout options, where items are automatically scanned and recognized without needing to touch a pad or screen to enter their names.
  • Self-checkout options remain popular with nearly 75 per cent of shoppers using self-checkout to pay for groceries frequently.

Contactless payments

Retail trends COVID-19

US consumers have traditionally been distrustful of contactless payments but that’s quickly changing during COVID-19 and the increased hygiene concerns associated with cash payments and pin pads.

According to the Futurist Group contactless payment features are now considered a necessity by 38 per cent of American consumers, a jump of 8 per cent since the COVID-19 outbreak started.

Importantly this data was sourced early in the COVID-19 outbreak on March 3 but could be an indicator contactless card usage is set to spike in the US as a result of the Coronavirus outbreak.

“What it found was that, before Covid-19 began its spread, three in 10 US adults (30 per cent) reported that contactless card payments were something they needed, while a larger share of 41 per cent said they didn’t need the feature,” creditcards.com reports.

“But data from March 3 indicates a jump to 38 per cent indicating that contactless payment is a necessity to them, eclipsing those who say they don’t need it, at 33 per cent. This represents a 26 per cent increase in the number of U.S. consumers who said they require a contactless feature.”

Online retail

Online retail was already primed to boom between 2020 and 2023, with Visual Capitalist noting it was set to become worth $6.3 trillion in the next three years.

There’s no doubt COVID-19 has accelerated that trend, with Essential Retail noting in March, e-commerce transaction volumes increased by 74 per cent.

“The rise in e-commerce sales has been particularly profound in products related to staying indoors,” they reflected.

“Compared to March 2019, transaction volumes increased by 97 per cent for home products and furnishings, 136 per cent for DIY products, 163 per cent for garden essentials, 26.6 per cent for electronics, 29.7 per cent for jewellery, and 18.6 per cent for Telco.

“Additionally, there was a 97 per cent increase in online gaming. Categories which saw a decline in transaction volume in this period included ticketing by 60 per cent, travel by 44 per cent, and online dating by 8.9 per cent.”

Meanwhile, it’s tipped the e-commerce trend will continue long beyond the quarantine of COVID-19.

“Long term, we and others in the industry predict that the shift in consumer behaviour – opting for online purchases – is likely to outlast the crisis,” Essential Retail stated.

US consumers altering their spending

US consumers altering their spending

The headlines might be grim but it’s not bad news for all retailers, with some set to see a surge in spending as consumers respond to the threat of COVID-19.

The latest data indicates a shift in consumer spending, with essential items like groceries on the rise, while anecdotal evidence from elsewhere globally indicates other sectors may also be in for an uptick.

Here’s how US consumers are altering their spending and the sectors which might see a rise in sales.

Altered spending

According to recent research from GfK, 85 per cent of US consumers indicate they will alter their spending habits in response to increasing concern over COVID-19.

Conducted between March 17 and 18, the representative survey found coronavirus will have both significant short and long-term effects on brand affinity and consumer purchases in the US.

The shopping-related adjustments that consumers expect to make include:

  • Preparing food more often
  • Shopping during non-peak hours
  • Doing more online shopping
  • Postponing or cancelling personal service appointments

“Over the next few weeks, consumers say they plan to spend more on ‘essentials’ such as cleaning products, canned goods, and bottled water – and less on apparel, toys, and other ‘optional’ items,” the survey found.

“But COVID-19 may also have long-term impacts for some brands. Roughly three quarters (73 per cent) of those surveyed say that the way companies conduct themselves during the crisis will impact whether they do business with those brands or retailers in the future.”

So how is this panning out in the retail sphere now?

What’s up, what’s down

US consumers altering their spending

As people spend more time at home and less time socializing with friends at restaurants and cafes, grocery sales have seen a natural upswing.

Statista notes between March 16 and 17, grocery purchases surged 14 per cent, along with non-food child products to keep the children occupied (up 4 per cent), in-home entertainment (up 3 per cent) and household supplies (up 1 per cent).

On the flipside, the same period saw a lot of spending reduced across a range of sectors.

Snack purchases were down 7 per cent, books and magazines fell 10 per cent, personal care products dropped 11 per cent, tobacco products were down 14 per cent, takeaway dipped by 22 per cent, alcohol reduced 23 per cent, pet care services slumped 35 per cent, and consumer electronics fell by 36 per cent.

But as this was in the relatively early stages of the US COVID-19 response, these figures could soon change.

What’s happening elsewhere?

In Australia, for example, where residents have been urged to stay home for the past three weeks, surprising products saw an upswing in sales.

After an initial focus on health products, groceries and home necessities, alcohol sales started to rise, and products like home appliances including toasters, bread makers and coffee machines began to attract increased interest along with home office supplies.

Then came entertainment-based products like audio visual technology, toys and games for children, books, fitness products like dumbbells, gym equipment and activewear, and even intimate apparel.

Will this happen in the US?

Early indicators show the US may follow a similar trend when it comes to purchasing behaviour, with a surprising list of items dominating online shopping searches.

Statista reports more and more consumers are searching for products which they had no previous interest in.

These include:

  • Dumbbells – up 725 per cent
  • Vitamin C Gummies – up 532 per cent
  • Powdered milk – up 516 per cent
  • Bidets – up 379 per cent
  • Bread makers – up 364 per cent
  • External monitors – up 160 per cent
  • Freeze dried food – up 131 per cent
  • Mouse for laptop – up 85 per cent

Retail happening online

US consumers altering their spending

Whether the rise in searches will translate to retail sales remains to be seen. However, one thing is clear, online purchasing has increased rapidly.

A recent study of e-commerce purchasing by Adobe Analytics found protection products like hand sanitizer, face masks, gloves and antibacterial sprays have seen an 817 per cent increase.

Cold, cough and flu products have also increased 198 per cent, while online purchases of pain relievers increased 152 per cent.

Household staples are also being bought over the internet, with toilet paper purchasing up 182 per cent, canned goods up 69 per cent and shelf stable products like rice and oatmeal have risen 58 per cent.

“Right now, as consumers increasingly use digital methods to prepare for a possible emergency, retailers need to ensure smooth, frictionless, and fast experiences on their eCommerce websites and mobile applications,” Adobe Analytics reflects.

“Meeting your customers’ needs and expectations at a time like this is imperative: it could either make or break your brand.”

Six ways retailers can pivot in the time of COVID-19

Six ways retailers can pivot in the time of COVID-19

It wasn’t expected, it certainly couldn’t be planned for, but now retailers are being forced to not just think outside the box, but totally build a new one in the wake of the economic fallout from COVID-19.

So, what are the top tips when it comes to rethinking your bricks and mortar business model as social distancing sees traditional retail grind to a near complete standstill?

Here’s a quick guide to strategies available for retailers to pivot in the time of COVID-19.

A diversified offering

What are the key things people are seeking right now?  In most cases it’s essential items. That’s seeing some businesses up the ante and switch up their product lines.

For example, florists are now delivering packages of essential food and household items, while alcohol distillers are making hand sanitizer. Some clothing brands have also turned their attention to making and retailing face masks.

They’re diversifying their offering to cater to what’s in demand.

Online is critical

Prior to COVID-19, online were certainly important to have. Now they’re absolutely critical.

With more people spending time indoors, this is particularly the case for retailers who offer products like homewares, and DIY items.

People are looking to occupy their time and items like these along with games, puzzles, kids’ educational tools, and tech hardware help keep them busy.

Meanwhile, essential items are also sought online. This includes online ordering of medications and food.

Six ways retailers can pivot in the time of COVID-19

Be transparent

Whether it’s on social media, your website or via your email marketing, be open and transparent about what you’re doing as a retailer.

This includes strategies you are embracing to protect staff health and employment, initiatives that have been put in place to better service your consumer, and how your business is being impacted.

When people understand what you’re doing they’re more than likely to support you and assist.

Be interesting

People currently have a lot of time on their hands, and some welcome a distraction. This is the time to help out with how-tos and guides.

For fashion retailers this is especially pertinent. Guides on getting the look, what’s in, work from home wardrobes and more, could be topics of interest.

Communicate, communicate, communicate

It’s not business as usual by any means, but it is important to communicate that retail is still indeed in business. The offering might be different, the delivery might be altered, but communication is key to ensuring your customers know where you’re at.

Six ways retailers can pivot in the time of COVID-19

Reach out to your community

Help your community and they will help you. This may not be the time to spruik the latest online sale, but it is the moment to reach out and assist those in need.

When a brand shows its altruistic side, it’s far more likely to reap results in terms of loyal and raving fans. Long after this immediate crisis is over, these are the people who will have your back.

Set up for the comeback

Although there’s no doubting things in retail are tough, one unique benefit that is coming out of the current situation is that all industries are being forced to rethink their strategies, embrace technology and look at the systems and procedures within their business.

This hiatus offers an opportunity to look at retail business efficiency and spend time setting up for the comeback.

When COVID-19 ends, and it will, there will be a palpable sense of relief driving consumerism in the immediate aftermath.

That will bring its own opportunity. In the interim, the aim of the game is to remain relevant, cater to consumer’s current needs and be flexible and transparent where required.

If you’re looking for further resources about retail at this time, including Government relief and industry guidance, the National Retail Federation has a dedicated page of COVID-19 resources.