Welcome to the latest Etch business briefing. In this snapshot of the week, we wade through the melee of Covid-19 updates, articles and thought pieces so you don’t have to.
So what has happened since our last Business Briefing? In a slightly baffling address, Boris Johnson laid out plans for tentatively reopening the country. People are being ‘actively encouraged’ to return to work, exercise limits are being lifted. Depending on how the situation evolves over the coming weeks, non-essential stores could reopen from June 1st.
THE QUICK READ
Short on time? Here are this week’s headlines…
- Preparing for a new consumer: Today’s consumers have new – and legitimate - health, wealth and sustainability concerns. They now have to navigate a complex reality of relaxed restrictions and lingering virus threats. As a recession looms, we’re also seeing the emergence of a distinct consumer group consciously restraining spending. All of this is happening against a backdrop that’s critically questioning our materialist past.
- Reappraising technology’s role in consumer journeys: Social distancing measures will jeopardise the shopping experience as we know it, removing the ability to tactically engage with products and challenging social interactions. In these fundamentally altered circumstances, consumer journey maps need revisiting and technology’s role reappraised to both better protect consumers and enhance an otherwise sobering physical experience.
- Realigning internal teams and targets: We find that online teams and offline teams are often separate and can be tasked with almost competing KPIs. This crisis means that we need to challenge that thinking. Technology shouldn't be considered a rival to physical experiences, but a natural - and now imperative - complement.
[Accurate as of midday Thursday 14th May]
THE LONG READ
Preparing for a new consumer
Once stores fling open their doors, exactly how consumers are going to behave remains something of a mystery. What we do know is that while the threat of the virus looms large, real concerns will prevail about health and personal safety. Naturally, this will impact would-be shoppers’ readiness to venture back on to store premises. Brandwatch revealed this week that 31% of consumers would not feel safe visiting shops and stores once lockdown restrictions were lifted.
As Nielsen notes, in a bid to protect their safety, we can expect new consumer behaviours to emerge under this ‘rebound’ scenario, heightening pressure on retailers. Not least, consumers will be looking to limit touchpoints, demand more precautions everywhere 24/7, value personal space, opt for open confined spaces and value virtual before physical experiences.
The issue of personal physical safety is made all the more challenging by the fact that it doesn’t simply begin and end in the instore experience. As BRC Chief Executive Helen Dickinson pointed out this week, consumers need to feel safe throughout the entire shopping trip. That means creating safe journeys to and from stores, as well as a safe experience within the store itself.
Even as retailers rush to furnish stores with hand sanitisers and health screen employees, safety is just one battle. There’s then the added complication of how consumers will behave as a recession approaches. 31% of UK consumers expect the crisis to have a dramatic or big effect on their personal finances, 41% are planning on cutting back everyday spending and 67% are delaying large purchases. Nielsen believe that we’re about to see the emergence of two distinct consumer sets – those with insulated levels of spending and those who will have restrained their spending habits altogether under Covid-19 duress.
But even if consumers are unimpacted economically and unphased about their personal safety, there’s then the challenge that Covid-19 has forced a reappraisal of many aspects of life, not least consumerist excess. As Mary Portas discussed in Retail Dive this week, ‘I think that a lot of people are going to realize that they don’t need as much.’ For Portas, it remains to be seen as to whether physical shopping remains alluring from an entertainment and escapist standpoint. After all, ‘We will all be craving a bit of entertainment, which is what shopping has always been.’
Reappraising technology’s role in consumer journeys
But exactly how entertaining will a physical shopping trip now feel? We visit stores not least for the ambiance, tactile browsing experience and social interaction. How will we browse for clothes, for example, when we can no longer touch the fabric or indeed try on the items in a now (most likely) shuttered changing room? How does the customer service experience feel when advice is administered from behind a mask or Perspex screen?
As eConsultancy stressed last week, under these profoundly altered circumstances, customer journey maps need reviewing in their entirety to better establish the role that technology should play in both functionally protecting consumers’ safety while enhancing the physical shopping experience.
For example, the significance of online to offline services, such as ‘click and collect’, is elevated under Covid-19, both in helping minimise instore social interactions and in reigniting customers’ relationship with physical stores. As the New York Times observed this week, in a bid to reduce social contact at the point of transaction, we can expect more contactless mobile payments, remote points of sale and shop assistants armed with tablets and phones. As Forbes spotted, new software is burgeoning to monitor shop visitor numbers, control social distancing and even stop people from touching potentially contaminated surfaces.
But it’s more than that. Technology has a role to play in the instore browsing experience, acting as a substitute for the IRL item or product trial. As we mentioned last week, DTC opticians Warby Parker have already introduced an instore app to take glasses measurements, reducing staff and customer physical contact. Likewise, we’d expect virtual try-on technology, such as Sephora’s Virtual Artist or Ulta’s GlamLab to be used instore as a health-conscious substitute for beauty product trials. With changing room usage potentially restricted, could this open the doors for the wider adoption of instore augmented reality sizing technology?
Equally technology can address the inherent conflict of customer service in a Covid-19 era. How do your in—person customer service representatives or store associates operate effectively from behind a mask and at a distance of two metres? We were fascinated to read John Lewis’ Britain Through the Lockdown report this week, not least to learn that their efforts in virtual customer service provision and ecommerce aren’t abating under eased lockdown restrictions. If anything, they are accelerating.
During lockdown, John Lewis introduced free digital nursery, home and styling services to provide the inspiration, guidance and support that otherwise would have been fulfilled instore. In just three weeks, the company saw 1,000 appointments. Rather than curb the service under lighter restrictions, they plan to expand it to include online services such as wine tasting, yoga lessons and cooking classes.
Despite changing social distancing mandates in the US, luxury department store Saks are also planning the introduction of virtual shopping appointments. Using video conferencing apps, such as Zoom, personal stylists will walk customers through the store, removing items off rails for closer inspection. They’re also introducing a new ‘valet’ return system, where shoppers can text shop assistants to meet them at the store entrance or complete the transaction outside.
Realigning internal teams and targets
If this crisis highlights anything, it’s the importance of an innate symbiosis between physical and digital experiences. Achieving that requires a cultural shift and the breaking down of internal silos to adopt a collective deeper focus on customer needs. But it also requires a top-down acknowledgment that digital experiences aren’t the foe of physical experiences. They are a natural - and now imperative – complement.
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We'd like to invite you to join the conversation on how COVID has impacted your industry and the opportunities you've found for innovation and change. Join as Head of Strategy, Harriet Nicholson, and Head of Innovation, Seth Campbell talk through their insights whilst the world adjusts to a new normal.
Thursday 18th June at 2pm.
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