What have been the pros and cons for retail businesses considering the circumstances of recent months?
Today we ask experts in the sector to outline their viewpoints on the question.
Kelly Slessor, CEO of Shop You
Pre Covid retail was already experiencing huge challenges operating seamless channels that integrated both the physical and digital store, required investment and a skillset that many retailers did not have internally. During Covid we saw online increase by 50%, services such as curbside pickup increase by 208%, and the forward-thinking retailers move to video concierge and personal stylists type services. Analysts believe that the retail industry accelerated by more than 5 years in less than 3 months. We have now retrained customers globally to shop online and over the next 6 – 12 months we will see the survivors driving enhanced experiences in their digital channels. Sadly there will be many more fallouts of those that can’t invest in and accelerate their digital experience.
Adam Ioakim, Managing Director, APAC, Emarsys
Running a retail business is full of ups and downs, particularly in the COVID era. Operating in a world where e-commerce is booming was already proving challenging for many brick-and-mortar retailers. Unfortunately for some, COVID-19 was the nail in the coffin that saw to their permanent closure. For others—particularly retailers that have adopted an omnichannel approach—it’s been a very different story.
Yes, in store retail still suffered, but online provided numerous growth opportunities and learnings. For example, in March, 43 per cent of online sales were made my “new customers”, according to our ccinsight analysis tool. This represents an opportunity for retailers to target a brand new customer base and build loyalty over time.
Running a retail business isn’t easy. There are risks (particularly for single channel businesses), but there are also opportunities, like COVID-19 transforming shopping attitudes and behaviours. Retailers that are constantly looking for ways to optimise their business, leveraging technology and insights into consumer trends, behaviours and preferences, will be in a strong position to withstand disruption, and perhaps even come out the other side stronger.
Gordana Redzovski, APAC Vice President at Vend
Owning a retail business can be a truly rewarding, empowering experience. It provides the chance for a retailer to express their creativity, style or personal values through the products they stock; whether that’s designing a clothing line, making candles or running a boutique homewares store. From store layout design and marketing, to finances and business management, retail business owners have a wide range of responsibilities so there’s variety every day.
However, significant challenges recently have forced many retailers to come up with creative solutions to adapt and overcome these obstacles. For instance, many bricks-and-mortar retailers have set up eCommerce stores as an additional avenue to sell while their physical stores are closed. And whether it’s fashion stores increasing lounge and activewear ranges, homeware stores offering ‘home spa’ products or liquor stores providing at-home cocktail kits, retailers are also pivoting their stock to match new customer demands. It’s inspiring to see local retailers utilising their retail smarts and tech savvys to overcome the cons and embrace the dawn of the retail spring.
George Shillito, Commercial Director of Red Paddle Co
The retail industry is evolving faster than ever before with the introduction of tech and large online corporations driving customer expectations. To excel in this landscape, retailers today must be ready to adapt by stocking sort after brands and products whilst staying abreast of product innovations and wider industry trends. Products are just part of the purchase decision. Customer service, expert knowledge, readily available inventory and trusted, fast fulfilment are all the realm of the retailer. If done well, these factors allow retailers to stand apart and be recognised as industry leaders whilst giving customers a definitive reason to shop with them whether that be online or in store. Our global network of Red Paddle Co ecommended Retailers are leading the charge with this to offer not only the World’s No.1 inflatable paddle boards but also an unrivalled customer experience before, during and after a purchase.
Craid Padoa, managing director of Wanzl Australia
Retail was one of the sectors most affected by the pandemic. The good news is that the skills that retailers developed navigating this crisis will stay with them for life. Some have done well revenue-wise out of COVID, others have struggled, But everyone has had the opportunity to build stronger, more customer centric businesses and resilient operations particularly in maximising the e-commerce opportunity, alongside building key leadership essentials like resilience and adaptability.
The demands and pressure that the pandemic has placed on retailers have been extraordinary. They have managed unprecedented disruptions to supply chains and volatile demand which made planning very difficult, alongside rapid shifts in consumer behaviour and sentiment. Even retailers witnessing a rise in revenue are facing a significant increase in costs to employ extra personnel for cleaning and customer counting. Many retailers – even those doing well in the short-term – face an uncertain future and the winners will be those who remain adaptable, intelligent and invest wisely.
Mac Wang, Head of Australia and New Zealand, Stripe
Amid COVID-19 we’ve seen years of offline-to-online migration compressed into weeks, requiring businesses to understand online shopping carts, delivery and fulfilment, and reducing friction of online payments. At the same time, it’s an opportunity to consider new business models — the subscription model has been long-touted as the new way of buying online, but amid COVID-19 it has really begun to show its resilience.
Businesses in almost all sectors have been turning to subscription models due to the benefit of recurring revenue and additional value that the model brings. It allows retailers to break out of purely transactional, one-time purchases, and gives an opportunity to continually build on and improve customer relationships. And it’s not just about software. From luxury items like dresses to commodities like razors to meal delivery kits, consumers are now accessing goods, all for a monthly fee.
The retail businesses that will thrive during these times of unrest are those that are the most adaptive. Now more than ever, consumers are looking for brands that deliver different and better buying experiences. Now’s the time to rethink the way you run your business, and find new ways to add value to your customers’ experiences. For those who are struggling and may not have a subscription aspect to their business, now is the time to seriously consider developing a recurring revenue business model.
Jason Toshack, ANZ GM at Oracle NetSuite
Many of our retail customers have shown amazing resilience and agility over the last couple of months, finding new ways to diversify their offerings and meet customer needs. Retailers around Australia have had to lean heavily on ecommerce and digital tools while physical stores have been shut, and those who had the right technology foundations in place were able to adapt relatively quickly.
In addition to an increased focus on ecommerce, we’ve also seen retailers find creative ways to stay connected to their customers. From higher levels of customer support, including the use of digital assistants or chatbots, to remote consultations in categories where customers still require a more personal touch, like optometrists.
Australian retailers have by and large done a great job of using the tools available to them to connect with customers, and those with the right systems and infrastructure in place have been able to meet or even exceed their customers’ expectations.
Shannon Ingrey, Vice President and General Manager ANZ at BigCommerce
Although it’s really too soon to know the lasting impacts of COVID-19 on the retail industry, we do have some early indicators as to what these might be.
The sheer speed and scale of lockdown restrictions would have had an incredibly sobering effect on retailers that rely heavily on bricks-and-mortar sales. But the pandemic could also turn out to be a coming-of-age moment for ecommerce and omnichannel retail, both here in Australia and around the world.
Coronavirus has been a catalyst for change in the retail industry, the likes of which we haven’t seen before. Online retail has shown the kind of growth in the last few months that would otherwise have taken years. There are a couple of key drivers here – firstly, with shops shuttered, many more Australians were forced to look online for their everyday purchases – something that omnichannel retailers were quick to take advantage of. However, we’ve also seen businesses across a range of industries increasing their online presence in response. In this sense, COVID-19 has driven change that opens doors to new, exciting and profitable opportunities for many retailers.
Like many others, Sydney-based brewer, Beer Cartel, was forced to close its doors as a result of the country-wide lockdown. As a result, Beer Cartel quickly ramped up its ecommerce store, offering customers a variety of beers in its “QuaranTinnies Isolation 12 Pack”. The pack helped drive a 300% increase (YoY) in sales for Beer Cartel and proved the value of its ecommerce store.
Sreelesh Pillai, General Manager of F reshworks Australia
The last few months have undoubtedly been difficult for everyone in the retail industry. At Freshworks, we’ve been working with the likes of T2 Tea, to help enable their continued success in the industry and have observed a number of findings.
For T2, the change was all about effectively servicing their employees. Having already implemented Freshservice – Freshworks’ IT service management platform – for their business processes as well as their incident and problem management, their internal functions didn’t suffer much. The integration of Freshrelease – Freshworks’ project management software – further aided T2, as they were able to gain a holistic view of tasks, problems and incidents, which helped in delivering quicker resolutions. This translated into their external relationships with customers, as IT functions were already optimised and ready to handle anything that was thrown at them, thereby improving the overall service experience of customers.
As this shows, retailers ultimately had to be willing to adapt and make use of the technology available to continue offering the best possible end user or customer experience.