Consumers are rapidly warming to buying online. Here’s how to respond.

For some time now there has been talk about Retail 3.0, the new form of retail in which more traditional retailers move online to be able to successfully compete with digital incumbents.

The Covid-19 crisis will accelerate the transition to Retail 3.0. In many industries, as a result of the crisis, consumers are showing very clearly how they believe shopping of the future should look. For example, 44.9% of the respondents in a recent Dutch survey said they buy more online. There is no reason to believe that after the crisis these people will suddenly go exclusively to stores again. It is therefore sensible for retailers to proactively investigate how they can offer customers a more satisfying online experience in what will become the new normal.

Different challenges in different industries

Most industries are facing challenges and changes as a result of the crisis. Supermarkets and meal service providers are seeing great growth. DIY stores and garden centers are also experiencing growth because home workers are also doing more redecorating and spending more time in their gardens.

On the other hand, the fashion industry, for example, is seeing a major decline in sales. Supermarkets, DIY stores and garden centers may benefit to some extent from the crisis, but they too face new challenges. This year, when people suddenly started stockpiling toilet paper, pasta and mineral water; everyone learned to expect sudden and unforeseen peaks in sales of certain products. Supermarkets are now, among other things, faced with the question, “How can I efficiently plan my supply?”

Another important necessity caused by this pandemic is that retail organizations need the ability to check how their employees are feeling during these difficult times. Do they feel safe with the precautions taken? Do they have suggestions to make dealing with customers safer? Do they suffer from the increased pressure?

Need for different data within an organization

Retail organizations that are now, due to these and other developments, moving faster to online solutions need to think about their many, many data requirements.

Different departments need different data and insights that will empower their decision making and help them to be successful. The business owner of a category or unit has different needs from data than a data scientist or business analyst. For example:

• The business owner will say, “That KPI doesn’t look good. I need to go deeper into it. Maybe I need to run a special campaign.”

• The data scientist wants to see the raw data, to feed the algorithms that help the business target the special campaign to the right audience.

• The business analyst wants to make certain data calculations and look at cross-sections of data in order to make reports for stakeholders.

More retailers are finding data products that fit these types of individual needs. Data is the way to succeed in the next incarnation of retail. Fortunately, at the same time, analytics have become more accessible.

Work backward

In fact, technology is a commodity. It's not so much about what kind of solutions you buy. It's about what you do with those solutions. Do you sometimes feel like your technology is making your business decisions? To avoid that, work backward to start your new technology selection process.

First, figure out what your organization’s new normal will look like. How have your customers changed? What do they expect more of from you? What changes will you have to make to keep them happy? Once this is clear and you have determined the desired business outcomes, work back to which technology you need to achieve the best results. It’s like reverse engineering on a business level.

Happy customers make happy retailers

As colleagues, we (the authors) frequently work together and with external partners like SAP to help organizations satisfy customers.

An example: a leading retailer had more than 250 legacy applications supporting business areas including logistics, supply chain, stores, merchandising, finance and corporate systems. These outdated applications became a serious bottleneck that impacted the retailer’s business. As a result, it was pressured by born digital competitors like Amazon, selling the same products at the same price, but with delivery as much as one week faster. Customer experience was also lagging. We built a delivery model around the retailer’s need for speed. It reduced costs substantially and improved customer service because the retailer was able to fulfill orders as fast as its online competitors could.

Stay in touch

Even if customers have less need for particular brands or industries during this crisis, it is important to stay in touch with them. What is important for your customers during this crisis? What do they expect from your brand and/or products? With which promotions or products can you surprise them?

A few examples: several large fashion brands have started to produce fashionable mouth masks. Alcohol producers use their factories to make sanitizing products. Car brands (even in Formula One!), have developed new, faster and cheaper ways to manufacture respirators. Meal suppliers have made contactless delivery possible. And countless museums and other cultural institutions have opened their doors digitally and free of charge to help dispel the boredom of so many people in quarantine.

Our advice: Think ahead, be creative and stay constantly in your customers’ field of vision.

Stay safe, stay successful!

 

 

 

44.9% of the respondents in a recent Dutch survey said they buy more online. There is no reason to believe that after the crisis these people will suddenly go exclusively to stores again.

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About Birgit Niss
Global Head of SAP Solutions Sales
Birgit Niss heads global pre-sales for back-office solutions in Retail, Transport and Logistics. She has over 25 years of experience in back-office solutions, especially with SAP across different industries. Additionally, she has been in various roles such as program manager for large implementation projects, heading SAP teams and business development — always pursuing efficient business processes for the customer. Before joining the Atos Retail, Transport and Logistics pre-sales team, Birgit was broadly engaged in developing business across the whole SAP value chain, in relation to infrastructure, SAP running on public clouds, security, implementing sound business processes for the customer, and also in consulting for gaining the most benefit from the SAP solution.

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About Bram Steenhoek
Head of Global Retail Consulting
Bram is the head of global retail consulting at Atos. He leads an international team of business consultants that combine business understanding with problem solving skills and technical know-how to help clients create value. He sets vision and brings thought leadership combined with a practical and entrepreneurial mindset. Bram holds a masters in Marketing and has gained experience in the software and creative agency industry where he helped some of the worlds largest brands create value from digital technologies & data through strong customer focused value propositions.

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