Retail Evolution in COVID-19

 

Retailers have certainly been affected by the COVID-19 pandemic, prompting many to leverage new tactics to survive. These changes in approach have also influenced the evolution of the retail industry, surfacing new trends with lasting effect.

 With the 2020 spread of Corona virus, the world is facing a new business environment that has never been experienced before. The lifestyle of consumers is represented by 'mask and self-quarantine', and the need and importance of “Contactless” channels are growing in the purchasing stage of products and services. How is the retail scene evolving due to COVID-19? According to the association of accountants called Deloitte, “tens of millions worldwide have been urged or ordered to practice social and physical distancing in a massive collective effort to “flatten the curve,” to slow the transmission of the virus and avoid overwhelming our healthcare sectors.” The press believes “gaining a better understanding of how consumers’ shopping and spending habits are changing in light of this global pandemic could help retailers respond, adapt, and move forward in these incredibly difficult times.”

Solution: How Convenient Is It?

In the opening of the Retail Big Show, the NRF chairman emphasizes "convenience" among the changing elements of the retail environment. According to the NRF survey, the proportion of consumers who chose convenience as important in shopping increased 83 percent from five years ago. So then, how can retailers promote "convenience"? The conclusion the show suggest is “digital innovation”. Two big flows of digital innovation are “digital transformation” and “omni-channel”.

1) Digital transformation

Digital transformation is a process that applies IT technologies such as big data and artificial intelligence (AI) to innovate existing organizational operations and change consumers to experience new services in a digital environment. Simply, ‘digital’ is induced into the process of customers purchasing products and using services. A fashion editor in Vogue Korea Hyeon-ji Nam says, “Fashion brands need to improve the quality of the service of their retailers and upgrade customer service strategy so that consumers satisfy and feel comfortable.”

2) Omni-channel

Electronic commerce has become the ideal ally to make transactions with only one press, without setting foot outside the house, given the impossibility of not leaving home, but with the same needs. Retail companies targeting omni-channel connect online and offline and seek customer convenience or cost savings. Amazon Go, without checkpoints, is a prime example of this target model, and is now bench-marked by the retail and commerce companies from a variety of perspectives. According to Amazon.com, “Amazon Go” utilizes 'Just Walk Out Technology' by accurately recognizing the behavior of a circular camera with a self-driving sensor attached to it, picking up or putting down products on the shelves, and using IT technology to check whether a product is picked up or not.

After the advent of Amazon Go, many retail companies around the world are attempting to develop self-service stores and managerial robots, and various types of the self-service stores are emerging. This is revolutionizing the off-line channels and producing a variety of contents, including discourse on labor structure as robots appear at the forefront of human society. 

3) Pop-up Store

"Pop-up store" is a word derived from a computer window that pops up and disappears, which means an off-line store that is temporarily operated for a short period. It varies from hands-on shops with diverse and different concepts to temporary off-line stores of online-based companies. Editor Hyeon-ji says, “For companies, pop-up store is an opportunity to give experience to customers about their products and services in person, increase brand awareness, and collect customer data through various attempts.”

Pop-up attracts customers' attention through digital mirrors and allows customers to experience more than just looking at it through a variety of links to mobile apps, increasing their interest and desire to buy the product. Hyeon-ji mentions “The key point is that the pop-up store opens on an unspecified day, and that information is only known to the company's community or brand followers. Hence, people who do not know this information often feel like a surprise event, but if it is well-planned, it is a good marketing strategy to spread positive experience or brand-friendly Earned Media.”

How retailers should proceed in the Covid-19 period

What retailers need to investigate is, how will customers continue to look for shopping and how they can ensure scalability in the shopping area for consistent customer inflow. Currently, few customers are coming to off-line stores, and in order to overcome this disruption, channel-to-channel connectivity, and virtual environments are crucial. Also, retailers should plan to provide differentiated experience based on each of the customers’ characteristics in the process of customer purchase. “Digital Retail” which implements these will turn the current retail industry crisis into a new opportunity and become a silver bullet to enhance the sustainability of the enterprise.