2020 has seen retailers shuttered stores, limit hours, and withdraw financial guidance as they grapple with how and when to reset their businesses. Faced with the challenge of adapting to and planning for the Great Retail Reboot, only a few businesses have benefited from the global quarantine fall out.
Wizz Selevy, founder of Wizz&Co in London, and I discuss the impact across geographies and how the Health and Beauty sectors have not been unscathed, with most consumers taking a step back and seeking skincare over cosmetics products.
The Consumer Mindset Has Shifted
Wizz describes the changing of consumer mindset with more being reserved in their spending. “Consumers are searching for a) products they need now as in essentials; b) determining need vs. want; c) buying out of boredom and from wish lists; and now d) more people want to be shopping with brands or retailers that have a purpose.”
Consumers are consciously pursuing brands they can relate to and that they want to support. As mindsets change, retailers need to stay mindful of incorporating consumer needs if they haven’t already into their business. Now is a time to be planning for new types of growth and opportunity by adapting to these shifts, keeping consumers engaged, and look for new ways to profit.
However, there remains an opportunity for retailers to reach their customers during this time, as consumers across the world are still stocking up on items like body lotion, facial skincare, and hair products to get through the crisis.
"People want to be shopping with brands or retailers that have a purpose" Wizz Selevy
Meet Consumer Where They Are
For brands, this means meeting consumers where they are now, while they are experiencing high levels of anxiety and trauma in their lives. Start by developing easy-to-consume brand-relevant content that can be informative and entertaining. It’s counter-intuitive for competitive brands and retailers- their current goal is not just shopping-cart optimization, but developing culture/country appropriate emotional consumer connections.
Go Digital (for real this time)
Additionally, brands should look beyond the crisis with a focused digital and in-store plan that bridges them to the consumer's recovery by country. Lock-down economics have opened up new loyalty channels and shopping opportunities for brands and retailers because consumers are more emotionally available to targeted loyalty programs that add value to their lives and have more time and bandwidth for evaluation shopping. This has paid off for some companies in China, as consumers turn to beauty and skin care products that they developed new digital relationships with during the lockdown.
Retailers/brands looking to create a more digital presence should consider:
- Consumers reach to digital – more brands will be turning to digital-first
- Beauty brands deploy diagnostic & try-on tools for purchases previously in-store
- Create digital journeys: DIY treatments, how-to-guides, blogs, videos, plug in’s
- Create advocates: how can you encourage and reward your most loyal customers
- Capture customers wish lists, gift lists, reserve & ship later, gift cards, gift emails
- Optimise shop via social, swipe ups, extend audience e.g. Tik Tok, Pinterest
Investing in Growth Technology
Ulta Beauty is an excellent example of a consumer-centric retailer who has witnessed revenue growth during the pandemic. It retains and engages with consumers because of their robust omnichannel behavior between in-store and online. Even when stores were closed, their increase in sales was aided by their strategic investments in emerging AI & AR technologies. They acquired try-on augmented reality technologies, teamed up with partners like Revieve Digital Beauty Advisor’s selfie skincare diagnostics and recommendation platform, and have now had a better experience to connect with and build a more loyal consumer base.
An example of a retailer adapting is Nordstrom. On CNBC, President Pete Nordstrom and Chief Executive Erik Nordstrom state, “We’re going to take a phased approach.” Nordstrom operates 380 stores and has rolled with the punches during COVID-19, coming up with new ways to operate. The company is looking to create more personalization for consumers, utilize their online shopping through e-commerce, offer more curbside pick-ups at more locations, and add more parking spots for returns at locations. Employees at stores will hand out masks. Currently, the retailer is working on contactless transactions.
The Rise of the Essential Utilities
Brands during the pandemic are paying attention to Amazon as they witness massive spikes in sales. Due to this, brands such as Oars + Alps, Wunder2, and S.W. Basics are looking to sell on Amazon. Founder of S.W. Basics states, “We avoided it for so long, but it’s impossible to [do that] at this point,” says Adina Gregore, the founder of natural skincare brand S.W. Basics, which is pulling out of all other retailers, including Target and Thrive Market, to sell strictly on Amazon and its website. The decision came down to utility. “They have the most control over the process of getting products to customers.” Amazon was considered one of the most reliable beauty shopping destinations, while retailers Ulta and Sephora were closed.
Post Pandemic Retail
Forbes recently reported an increase in app usage for digital shopping and predicted more usage moving forward across all platforms—especially with Amazon and Walmart. Besides more digital shopping, consumers will be more health-conscious, stay at home more, and have a shift in brand loyalty as they were forced to purchase other brands due to the lack of their go-to brands. To move forward, retailers need to think of the now, analyze what retailers, that are succeeding during this time are, doing and work to implement that into their own business and plan for the future, some Rebooting Retail tips:
- Digital lock-down permanently shifts consumer in-store emotions & behavior.
- Newly digitalized customers more open to omnichannel buying relationships.
- In-store personalization must address digital security, sampling,hygiene concerns.
- UYOD Shoppers – Use Your Own Device – presents retail and brand opportunities
- Be ready with agile assets,nimble capabilities to adapt to consumer expectations.
You can listen to it on my Podcast or watch video below:
Link to Video here: https://www.youtube.com/watch?v=MIOkHCgnSjo
Connect with Dean here: https://www.linkedin.com/in/followdean/
The Reboot Chronicles Podcast is a popular no-holds-barred forum, on iHeart Radio, iTunes and Spotify, that has been bringing together CEOs, entrepreneurs, authors, and global leaders for over a decade to discuss how organizations are rebooting Growth, Innovation, Talent, Culture and Governance in unprecedented times.
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