For retailers, the COVID-19 crisis has been the best of times and the worst of times. Although many brick and mortar stores have been hit hard by the crisis, online retail has boomed. As a result, businesses have had to innovate to keep up with increasing eCommerce demand.
1. Supply Chain Issues
Worker layoffs and lockdowns led to significant supply chain issues during COVID-19. Customers ordering favorite products online were often unable to receive them because there weren’t enough in stock. Although many of these supply chain delays have been corrected as workers returned to their jobs, the pandemic raised awareness of how vulnerable the supply chain can be to unexpected shocks.
In addition to supply disruptions caused by COVID-19, one-day delivery has now become the norm. Businesses have to innovate to keep up with customer expectations by looking at customer feedback on social media to find ways to improve delivery and service. Internet of Things companies are pairing digital twin technology with supply chain statistics to forecast inventory needs. Supply Path Optimization or SPO creates a more efficient path from the supply side to demand by reducing complicated SSP or Supply Side Platform interactions. This development improves efficiency and cuts costs.
2. eCommerce is Booming
There is little doubt that the COVID-19 crisis has accelerated online shopping. According to Forbes, the Year over Year growth for retailers’ online operations grew by 68% by mid-April 2020. It was trending up even before the pandemic and rose 49% YoY in January. The U.S. and Canadian eCommerce activity were up 129% YoY as of April 21, and 146% worldwide.
Even as the public has emerged from lockdowns, the path of the pandemic is still uncertain. Many may choose to continue working and shopping from home. This will mean increasing demand for online options. Businesses that already had a strong eCommerce component before the outbreak of COVID-19 have managed to thrive during the ongoing crisis. Other companies have had to adapt and innovate quickly to keep up with the trend.
3. Feature Marketing
Retail marketing strategies have changed significantly because of the environment created by COVID-19. Because of supply chain problems, many consumers had to switch from popular branded items out of stock to alternatives. New situations required adaptation and items with innovative features. For instance, many designers released high-end, fashionable facemasks as a result of COVID-19. Feature marketing has prevailed as the most effective retail marketing strategy because it places the product’s importance over the brand.
Feature marketing encourages new customers to purchase a product for the first time and gives existing customers more. The popularity of reviews demonstrates how essential feature marketing is; when customers write a review, they often do not focus on the brand but describe its features and how well they worked. Many consumers will purchase an item only after reading reviews to demonstrate the importance of focusing on features rather than brand marketing.
4. Customer Experience is More Important than UX
Successful retailers know that UX is a priority, but customer experience may be even more important in the current environment caused by COVID-19. Since many people have more time to spend making decisions about what products to purchase online, optimizing interactions with potential customers can increase sales.
One way to improve customer experience is to provide high-quality User-Generated Content (USG) in user-testimonials, reviews by verified customers, and social media posts. The success of USG is outstanding; in a survey, 86% of millennials believed that USGs were an indicator of brand quality, and they were found to increase conversion rates by 270%. Providing promotional videos geared to various age groups (i.e. with young actors to attract millennials or older actors for baby boomer customers) is also an effective marketing strategy that improves customer experience.
COVID-19 has represented a sea change in retail marketing strategy. Supply chain innovation and the improvement of customer experience have become higher priorities as more people stay home and demand efficiency. In addition, eCommerce customers want to get a full picture of an item’s superior features before they buy it. Even after the COVID-19 crisis passes, these trends are likely to continue for the long-term, and the retailers must innovate to cope with an increasingly competitive environment.