These are the retail success factors for a post-COVID-19 market
Fordham senior accountant Mini Maruvada discusses the trends emerging ahead of a post-COVID-19 market.
As consumers are crawling out of isolation due to COVID-19 restrictions being gradually lifted across the country, retailers are presented with a new challenge: making the most of the opportunities present in the post-COVID-19 market.
COVID-19 has moulded the retail space in a multitude of ways by accelerating emerging market trends such as the push towards digital marketing and transacting thereby, propelling retailers into largely uncharted territory.
There are a few factors in line with observed market trends however, that retailers need to be cognisant of in order to maintain and capture market share in the post-COVID-19 market.
The strategies retailers use moving forward are contingent on trends that have been cemented during the mandatory social isolation period.
Trends include dedication of discretionary spending towards the purchase of staple items such as household supplies, personal care items, home entertainment and fitness.
In such a conservative spending climate, discount retailers and value-oriented store brands are foreseeably in better stead of maintaining and growing market share.
Another trend that may prevail is that a large proportion of the workforce may continue to prefer working-from-home arrangements resulting in a long-term shift in the demand for various goods and services.
A significant section of the market continuing to work from home ultimately means that retailers need to reach their target markets in more creative, and digitally driven ways than before.
COVID-19 has accelerated pre-existing growth in digital and social media marketing and sales platforms.
A similar trend was seen post the 2003 SARS epidemic in China which saw online B2B e-commerce brands like Alibaba catapult to success.
A Nielsen report predicted that the mandatory isolation requirements potentially lead to almost a 60% increase in the amount of video content watched globally.
A significant uptake in media consumption is a signal to retailers to orient their business models in a manner geared towards more digital and social media focussed models.
The most beneficial social media platforms are Facebook and Instagram per a 2020 retail outlook report published by KPMG.
The report found that Facebook was preferred by 72% of respondents and Instagram was preferred by 66.9% of respondents as the social media channel of choice.
Whilst larger retailers will most likely already have mature online retailing platforms in place, boutique retailers with little to no e-commerce capabilities can take advantage of platforms like Instagram to effectively reach consumers and fulfil transactions.
The importance of an omni-channel presence will continue to be imperative to retail success however, brick and mortar stores and customer order fulfilment may need to be modified to incorporate trends engrained during the mandatory social isolation period.
For example, a decrease in foot traffic for brick and mortar stores may require reinvigoration of floor plans to reflect decreased in-person sales and to inject resources into capturing online store traffic.
Highly tech-enabled stores are also a focal point with stores in China and Japan already utilising technology allowing in-store shopping, order fulfilment, and payment on mobile devices.
An advantage of this digitalisation is that it will allow retailers to engage in data collection for more timely decision making.
Using these technologies, retailers will be able to monitor shopping habits, trends and motivations, discount products more accurately, assess inventory levels, and to reach and stimulate their target markets more effectively.
Retailers must focus on maintaining brand loyalty and customer engagement in preparation for the economy to rebound.
Consumers are seeking human connection and brands must rise to the occasion by showing consumers who they are and what they stand for.
Successful brand pivots are driven by a few core strategies including charitable linkups, promoting public health awareness, and digital re-invention.
These strategies have also allowed retailers to satisfy the conscious consumer trend.
In terms of customer engagement, retailers need to be creative with many brands now using avenues like virtual showrooms and social media partnerships to keep customers interested and to re-affirm value-orientation.
COVID-19 has undeniably proven to be an arduous test of endurance for retailers.
However, there are significant opportunities in the post COVID-19 market that can be capitalised on by retailers that are determined to be agile and those that aren’t hesitant to break the mould.