Reinventing Retail - The View from IDC
This year has been the year of the pivot for retailers as the pandemic reshaped consumer behaviors and the customer experience, most likely permanently. As we look to 2021, retailers need to focus on planning for the future with strategies that meet both the immediate and long-term needs of their customers and maximize the potential of all their sales channels. SmartBrief spoke with Leslie Hand, group vice president, IDC Retail and Financial Insights, about what changed this year for retailers, best practices for 2021 and the role data and analytics can play in helping retailers succeed.
What have been the biggest changes in the retail industry this year and what's been driving those changes?
Consumers told us via a IDC Worldwide, COVID-19 IMPACT ON IT SPENDING Survey (survey conducted during the Aug. 26 to Sept. 6 period), IDC, September 2020, that online shopping increased by 90%. They also told us that they are now making choices about where to shop in person based on the availability of buy online pick up in store, curbside and omnichannel returns services.
This is driving an acceleration of digital transformation – two years in two months is the new adage. The reality is that projects that were slated to be completed within two years moved from strategic roadmap to tactical requirement overnight, and thus investments and significant process changes accelerated.
The pace for becoming more digital has already accelerated by current needs – retailers report accelerating investments as much as two years.
- 35.4% of retailers are investing in technology to close the gaps in digital transformation.
- 21.9% are advancing quickly toward the highest stage of digital maturity with longer-term commitment, change management and integrated, continuous enterprise-wide DX innovation planned.
Investments in data-driven automation have also accelerated.
- 44.1% use data programs to gain insights into our business operations, products and/or ecosystems.
Resilience is a new and urgent priority – adaptability, scalability and the value of investing in the right technologies, business processes and people to serve the consumer best anytime and anywhere. Being digital from a commerce and supply chain perspective was proven to be a differentiating advantage during immediate and current COVID response and recovery periods. Companies that are farther along in their DX journeys, proved to be more adaptable, and yielded better YOY revenue performance.
Workplace transformation programs are also under the microscope – how can retailers keep employees safe and secure while optimizing safe and secure digital and contactless business?
How can the move to BOPIS and curbside pickup help retailers connect with customers, make their brands memorable and cultivate customer loyalty?
Contactless experiences are one thing that is making consumers feel safer. 38% of US consumers reported to us that they feel “more safe” or “much safer” when contactless is in place. Some of the top areas consumers prefer are:
- Contactless product delivery
- Contactless payments
- Product pick up (in store and curbside)
How can a strong returns offering help inspire confidence among consumers in the new retail normal?
Nearly 51% of customers told us that a strong flexible returns offering will make them more likely to frequent a retailer. Trustworthiness is an overriding important element also.
How can technology and analytics drive retail success in the new year?
Investments in analytics will help drive smarter decisions throughout business processes and improve automation of IT processes. Increasingly, artifical intelligence will need to drive a level of responsiveness driven by real time customer shifts and real time insights. AI can be the “ear to the ground” that drives more responsive placement of goods, pricing, promotions and strategies. Being responsive to the customer by having the tools in place will drive success in 2021.
What advice would you give to retailers to help them succeed in 2021 and beyond?
- Listen to your customers, but don’t wait for them to demand a new service before investing. The future of retail is crystal clear – act now.
- Don’t get stuck in analysis paralasys – invest in technology with intent – support your customer, your employee and your business with more transparency, more automation and more flexibility.
- Be resilient to the shifting needs of consumers – in product assortments, processes, marketing tactics and in delivering safe and secure shopping options.
Leslie offered more insights on the future of retail in the "Reinventing Retail: How Retailers Should Embrace the New Normal in 2021" webinar. Watch it now.
As Vice President for IDC Retail Insights, Leslie Hand is responsible for the research direction for IDC Retail Insights, and leads research related to the digital transformation of retail omnichannel operations. Hand works with retailers and technology providers on developing best practices and strategies, aligned with where they are, and where they want to go, leveraging IDC quantitative and qualitative data sets.