The global retail sector is expected to see USD2.1 trillion global loss in 2020 (according to a report by Forrester) and it will take 4 years to recover the levels of growth seen before the pandemic. With store fronts closed, we have all been forced to buy some things via online platforms. Will this trend continue? Will we see changes to E-Commerce catalysed by Covid? To find out, ECA approached Oliver Tan, CEO and Co-Founder of ViSense for his opinions on the matter.
Covid saw a massive increase in E-Commerce sales. Do you think this trend will continue post-Covid?
What we saw immediately during covid-19 lock-down was a rapid shift in buying behavior towards digital commerce as mobility become restricted and safety became major concerns. These shifted buying behaviors immediately towards online stores, starting primarily with daily essentials like healthcare, food and healthcare. ViSenze’s own Covid-19 Impact study, just recently released in June, showed top performing consumer categories in healthcare and beauty, food & beverage, shoes and clothing in that order from January to April 2020. Average global sales revenue for online fashion stores in April was also 21% higher year-on-year, while Amazon year-on-year sales were up by 26% in Q1 2020.
Yes, with traditional retail chains and malls continuing to be affected by mobility post-lock-down, in-store social distancing and other safety concerns, it is likely new consumption patterns will shift strongly towards digital commerce and shopping channels that are enabled by digital experiences that overcome these concerns. Nearly half of global consumers say they will not return to shops for ‘some time’ or ‘a long time’ even after the lock-down ends, according to GlobalWebIndex’s report.
What are some things that we can learn from and improve?
Covid-19 has taught us many things and makes us think harder about digital transformation. Retail is one of them. While it is critical for retailers to work through operational and tactical considerations to re-open retail stores, it is also an opportunity to for them to quickly re-examine their business and adopt digital platforms in the new normal. I see 4 immediate areas they will need to adapt quickly and innovate:
1) Store reopening is fundamentally different in every way
So how do you keep your customers and associates safe, while playing a new role in customers’ lives? Can store offer online ways for customers to search against store inventory while in the store? Or before coming to the store.
2) Customers’ values and behaviors have likely changed
So, what are these changes? For instance, if they are concerned about touching products on shelves, can stores offer virtual try-outs and sampling instead?
3) Stores will likely play a different role in the customer journey
Think omni-channel and think of the store only as a part of the customer journey and not an end destination.
4) Reopening efforts have already started
Lay the tracks while the train is moving. This means immediate store safety measures, offer deliveries for online orders or offer pick-up solutions.
Where will we expect to see innovation in the future with emerging technology, to push E-Commerce further?
Covid-19 will push over 80% of retailers and brands – both retail chain operated and online – to adopt artificial intelligence either in their operations or customer experiences.
If not, they will decline and die from not knowing their shoppers. These innovation applications will be lasting and impactful as retails need to accept that store will play a different role in the customer journey. I see 5 types of retail innovations and solutions being adopted more rapidly in the future of retail:
1) Augmented Reality / Virtual Reality technology / 3D technology
How do you bring the stores to shoppers if you can’t bring shoppers to stores? The answer is virtual product sampling, virtual showrooms, and even virtual malls. These technologies have additional advantages. Take Levi’s for example. Not only using these technologies to engage customers, but also to streamline operations. They introduced 3D technology for sampling and design, eliminating the need for physical samples to sell to merchants.
2) Smart interactive AI solutions like intelligent visual search, voice, live streaming
In an omni-channel retail world, having smart intelligent technology on devices we interact with or even on the simple smartphone is going to become even more important. For instance, AI powered shopping lens on smartphones that can recognize any product (in real world or from Instagram) and showing matching products immediately is already a common feature today and will become even more useful. So will smart conversational commerce usage and live streaming which allow marketers to use interactive video streaming formats to engage online shoppers.
3) Autonomous stores
Shoppers will be conscious in limiting interactions with other shoppers in stores as part of social distancing. So self-servicing solutions powered by AI, facial recognition, and self-check-out can make both in-store experiences better for customers. These autonomous solutions can also integrate both online pre-shopping behavior like product search with store-based experiences like appointment based shopping or self-pickups all part of a seamless experience.
4) Personalized recommendation solutions
Covid-19 will continue to disrupt normal buying behavior and shift more purchases to online means. That means even more data and compute required to understand houseful and consumer behavior. How do you differentiate personal shopping from household shopping? This is where smart algorithms and analytics come in; understanding consumer preferences, buying intents and offering them smarter recommendations for different members of the household.
5) Demand sensing
Supply chains were heavily disrupted during covid-19 lock-downs starting with China. We saw major impact immediately across a whole range of industries including retail. In a post-Covid world where both supply and demand patterns are likely to be more complex due to uncertainties like price variances, time sensitivities, and competition, retail players will need to be smarter in maximizing their supply capacities to reduce dependencies while dealing with more accurate demand forecasting. With this much complexity in demand sensing, only AI can deal with the massive loads of data, to minimize the risks and errors in forecasting correctly.
There is much talk about smart city these days, how does Ecommerce play a part in this?
Contributor: Oliver Tan
Author: Dharun Janarthanan
Project Associate, ExpertConnect Asia