2021: the pivotal year for retail?

The past 12 months have been rife with confusion — and opportunity. In 2020 the Covid-19 pandemic dovetailed with gigantic technological breakthroughs, huge cultural transformation and even geopolitical change to create a whirlwind effect across every country and every industry – including retail.

Two months into 2021, and we’ve seen multiple legacy retailers destroyed in the cross winds because they were unable to flex to new digital and customer demands. But other retailers are working with Flooid to take advantage of rapidly-evolving conditions. They see uncertain times as the perfect landscape to improve and optimize customer experiences – and their own relevancy.

Diane Palmquist, Flooid’s CEO North America and Co-CEO, explains why 2021 will be a pivotal year for retail.

How have customer habits evolved through the pandemic?

Covid’s instigated big changes but it’s also accelerated trends that were in place before. For example, lockdowns, work from home and fear of contamination have led to a massive spike in online shopping. But the move to online was already gathering pace pre-pandemic. Similarly, more customers now want to buy at self-checkout, or even follow a ‘scan pay go’ journey when they go into store. This again was a trend already in place; Covid just added impetus and altered the motivations behind it. Before it was more about saving time. Now many customers feel more comfortable avoiding contact with cashiers, or they don’t want to be in line with other people. So in some ways ‘time’ has been a secondary consideration.

Before the pandemic retailers knew that customers were evolving, but they weren’t reacting very quickly. During the pandemic retailers have learned that they have to react very quickly, or they will lose all their customers.

What impact is technology creating?

We were already in an era of massive transformation pre-pandemic. The cloud has opened up possibilities that were previously unthinkable, but then you also have the massive shift to mobile-first, coupled with the dawn of AI, machine learning and the Internet of Things (IoT). Today the discussion about the future of retail has become much wider than just the store v online. Whole new conversations have opened up around how people should work, their rights over data and privacy, how city centers should evolve, the circular economy and the role of brands not only as businesses that sell but also as entities that have a purpose. All of this impacts the role of retailers going forward.

Technology is widening the conversation and accelerating change. Retailers who double down on the ways that they’re doing business today with old technologies will not be able to survive this transformation where consumers are really driving the future, and will only shop where they are getting the convenience, the products and the pricing that they want.

What will the longer-term impacts be?

Multichannel, digital-first are becoming increasingly vital. But there’s a danger in a remote world that people become more used to purely transactional relationships. I think retail has to avoid falling into a fast and furious sell-deliver-move-on mindset. Retailers have to show customers they care about them and value them as individuals, even if it’s a remote relationship. And that’s where loyalty and personalisation have a big part to play.

One thing I’ve noticed – not only in retail – is that while a lot of people are happy to be working from home and avoiding long commutes and having more time with their families, they are also quite open about how they are missing human, in-person interaction with their colleagues and friends. So I think that more human element needs to be brought into stores again, maybe through different ways to serve, such as staff using mobile points-of-sale equipped with personalized content.

Another thing: we have to acknowledge that we’re still in an evolving environment. Nobody really knows which habits are here to stay and which are temporary. That means there’s a once in a lifetime opportunity for retailers to shape the way their customers shop – they just have to be brave enough to go for it.

Why is 2021 such an important time to innovate?

We’re at a crossroads where technical breakthroughs, cultural change, and the pandemic have converged to create huge uncertainty. But things will soon settle down, new habits will form and we will move into new established and accepted ways of living, working, and shopping. Vaccines are already starting to be deployed — to use a cliché, the ‘new normal’ is nearly upon us. My message is: short-term, retailers will only succeed during this time if they take some risks and innovate in order to deliver customers the value that they are looking for, and the experiences that the customers need. They also have to lay a marker, and a platform for future innovations.

Those retailers who dare to innovate and offer customers what they want are the ones who will succeed. They need to think about customer journeys, customer experience and customer personalization. They have to think: how can the pandemic make us better, and more relevant? And if they do that, they might surprise themselves with just what is possible to achieve.

Watch our video to hear more thoughts about changing consumer habits.