Don’t shop till you drop when you can shop on cloud nine
Covid-19 has exposed a silver lining for retailers, says Raymond Ma, General Manager, Alibaba Cloud Europe.
“What do points make?” asked Bruce Forsyth, host of the 1980s classic TV game show Play Your Cards Right.
“Prizes,” bellowed back the audience, in what has become one of British TV’s most iconic catchphrases. It’s a simple idea but one that is embedded in the psyche of consumers, thanks in large part to store loyalty cards.
As the Covid-19 pandemic has maintained its stranglehold on our ways of life, it’s been interesting to see how some retailers, such as Sainsbury’s and Lidl, have turned to online engagement with consumers - through gamification, offering digital prizes and in-store rewards - to encourage them to keep coming back for more.
It’s one of a few examples of how retailers are looking to fight back against the overwhelmingly depressing forecasts for the industry, especially on the High Street. As the Centre for Retail Research reveals, store closures are expected to reach 20,620 this year, with job losses rising to 235,704, an acceleration of a trend that was already on the march.
With the UK experiencing further lockdowns, its bricks and mortar retail trade appears to be in freefall. Not that the UK is alone in this situation; overseas in Singapore, department store Robinsons recently announced that it will be closing its last two stores,after 162 years of trading.
However, despite the disruption it caused, the Covid-19 cloud held a silver lining for retailers who had shifted their businesses online.Recent figures from the KPMG Retail Sales Monitor claim that online non-food sales increased by 36.7% in September, against a growth of 3.5% last year.
Overall, the 12 month average is expected to hit 26.3 percent growth, and that’s without factoring in food sales. It all points to a trend we knew was happening; but it opens up a debate about how to build the best online stores and stand out digitally, while still enticing customers back to offline stores.
New Retail, new journey
As we increasingly find in the modern era, the answer to the conundrum lies in technology. Running an online businesses supported by cloud computing is akin to building an offline store in many ways.
And, one of the most important considerations is to migrate the whole consumer journey and develop strategies at every turn to inform, stimulate and enhance the overall online experience.
This is especially true for the Gen Z demographic, who are inherently digital-savvy consumers that are in danger of missing out on the High Street, at least in its traditional form.
So, how can technology actually help enhance the overall shopping experience? For many retailers (and we include the 100,000 or so independent UK retailers here), there is an opportunity to use the retail space differently, to re-imagine the post-pandemic shopper and build a next generation retail store that is aligned and in harmony with an online store.
“We have to re-imagine the high street and it’s been interesting to see how brands like Nestle and Swisse are looking at shifting in-store shopping from being product-based to more holistic consumer experiences in China”
But first, let’s look at how the online experience is already evolving, as that will have an impact on customers’ expectations in bricks and mortar stores. Many online retailers in China, for instance, have embraced services that make the customer journey easier, more enjoyable and more rewarding.
These services include 3D virtual shopping, which enables products to be reviewed in 3D, so customers can take an even closer look at potential purchases.
For customers buying fashion items like lipsticks, nail polish and hair dye, the clever use of algorithms and rendering effects enables customers to virtually ‘try before they buy’, while an intelligent AI engine can also suggest mix ‘n’ match fashion items to complement the original item the customer was considering.
For visually impaired customers, the use of Optical Character Recognition technology can make the online world more accessible to them by reading aloud the descriptive text written on images.
Meanwhile, livestreaming technologies opens online merchant’s doors to a global market, with AI-powered real time translations serving audiences speaking different languages.
This year, during Alibaba’s Global Shopping Festival - 11.11 - 33 livestreaming channels on Taobao Live surpassed RMB100 million (US$14.9 million) in GMV, which demonstrated how the use of technology can be directly translated into sales.
In fact, the recently concluded 11.11 Global Shopping Festival saw Alibaba sales rake more than US$74 billion, with peak orders per second reaching 583,000.
The mega scale event was largely supported by cloud technologies, and utilised a slew of innovative digital solutions for merchant-customer interaction.
While the industry watches the never ending rise of hyperscale e-commerce platform in envy, retailers of all sizes have to react, not just by offering an online shop but by creating experiences for consumers to come back for more.
It is not just consumers who benefit from this new era of online shopping. Cloud-based data analytics platforms helps online merchants forecast potential sales volumes of specific products, potentially putting an end to the perennial retail dilemma of either over- or under-ordering a product.
Meanwhile, the remaining physical retail spaces can become experience centres, that supplement the online store, offering special product displays and demonstrations, digital signage, VR/AR capabilities, play zones, relaxed seating and so on.
Retailers need to be innovative, to not just drive sales but to drive interest and loyalty; but, above all, the store has to be relevant. There also needs to be consistency of products and service, regardless of channel.
Therefore, we have to re-imagine the high street and it’s been interesting to see how brands like Nestle and Swisse are looking at shifting in-store shopping from being product-based to more holistic consumer experiences in China.
Using the Tmall Theme Stores concept, they are turning High Street shops into scenario-based, interactive engaging spaces that are technology-driven and integrate seamlessly with online stores.
For many retailers this may seem like a pipe dream, or something that ‘other retailers do’, but it doesn’t have to be that way.
There are solutions that fit all retail sizes (and pockets), that can digitise bricks and mortar stores and deliver automated, intelligent services, from AI shopping assistants through to intelligent service robots and image search.
While unifying and enhancing the omni-channel retail experience, this will also deliver valuable consumer and product intelligence for the retailer. It will enable more informed decision making, on purchasing, marketing and distribution, as well as which channels are working best.
As Deloitte says in its Retail Trends 2020 report, consumer behaviour has changed and therefore retailers need to adapt to find new ways to reach and serve their customers. Getting the right mix of digital channels will provide lots of opportunities to drive engagement and growth but that’s just the start.
With the right mix, the right data and a new approach to experiences, retailers can re-energise their businesses, build resilience, agility and opportunity and no amount of giveaways, loyalty schemes and in-store games will be able to make up for that.
