Some of the world's largest retailers saw COVID-19 led disruptions significantly boosting their online sales. In the United States, instacart subscriptions increased by 10 times. In other parts, especially China and Asia, online orders grew by over 600% driven mainly by groceries and essentials. In fact, the contribution of online sales to the overall business has more than doubled in a short span of 3 months with several online retailers unable to fulfill all the orders. With the supply chains disrupted and the lack of adequate manpower, inventory and delivery times were adversely impacted.
As lockdowns end and the world starts getting back to business to what is believed to be the New Normal, eCommerce continues to outperform the offline channels. Many consumers continue to shop online rather than venture into the physical stores for the risk of contracting the infection. The consumers have started valuing the convenience and safety of online shopping even more. These are important leading indicators that imply that even after the cure or a vaccine for the virus is out, the newly formed habits will persist and a much larger number of consumers will continue to shop online.
The enterprises that considered eCommerce apps and other digital channels as secondary sales channels need to recalibrate their strategies to a new eCommerce mindset. In addition to making investments in technology, the digital mindset and culture need to be established. This can happen with the leadership support and an unrelenting focus on digital in all activities within the organization. In a March 2020 survey of key decision-makers of over 500 enterprises, over 50% of the surveyed feel that selling online directly to the consumers is one of the key opportunities in the next year. A significant chunk (40%) also feels that the digital enablement of their salesforce is a key focus area. The digital transformation is being accelerated and monitored closely at the board level.
The boardrooms are no longer deliberating the significance of online channels or mediums. The discussions are now around how to create resilient supply chains and ensuring how quickly can an omnichannel strategy with a mobile-first approach be implemented. We believe these are a few things that organizations need to carefully plan to create a truly digital enterprise.
1. Creating immersive buying experience: As consumers increase their share of wallet to online purchases, creating a digital immersive buying experience will become a strong differentiator. The key will be to invest in digital capabilities including mobile applications with Augmented Reality (AR) and Virtual Reality (VR) capabilities to create an experience similar to in-store buying. This will be all the more significant as first-time buyers start purchasing online, an immersive buying experience will create additional comfort for these consumers.
2. Focus on demand forecasting: Given that a lot of online buying was driven by fear, the retailers must account for pantry loading done by the consumers in their demand forecasting algorithms. This is more important for the grocery and essentials segment, which are likely to witness some adjustments in the immediate short team as most consumers have front-loaded essentials. On the other hand, for the non-essentials category, a lot of pent-up demand will be generated with consumers having postponed their purchases during the lockdowns. The retailers need to focus on appropriate demand forecasting tools to grow their revenue and meet unexpected demand.
3. Virtual Selling: As most consumers avoid a physical meeting or contact, contactless selling or virtual selling will be the way ahead. Consumer goods companies must equip their salesforce with digital tools and mobile apps in order to help improve virtual selling techniques.
4. Collaboration: Collaborating with the channel partners and helping them overcome the testing times by adjusting payment terms, and other necessary adjustments will help set the right tone for the future.
5. Consistent Communication: Be clear in concise across all communication channels clearly defining the purpose of your brand. Create the feedback loop to listen to the consumers. According to a recent survey, the majority of the brands do have a feedback mechanism whereby the feedback is captured using their mobile apps and other digital touchpoints but very few of those surveyed had an effective strategy beyond that. In order to complete the loop, companies need to collect real-time feedback and use it to improve their processes and systems and informing the consumers on how you are using the feedback to improve. Technology can be a great enabler for this.
6. Learning at Scale: As the pandemic creates new consumer habits, the enterprises must ensure that the sales force and other parts of the organization keep abreast of the new trends and new engagement techniques. Enterprises need to use virtual learning capabilities. Gamification of the new techniques and trends can make learning immersive and improve employee productivity. Security of the digital applications should be of paramount importance in these cases.
The do-nothing enterprises will risk their existence. The virus will finally recede but the newly formed consumer habits won't. The consumers will engage digitally with the brands and the enterprises need to embrace and adapt to the changing consumer behavior. The quality of digital interactions will be as important as the channel itself. We believe that the companies will need to change their approach and shift their strategic focus to digital and eCommerce to position themselves for success in what will be the new normal for retail.
Innovantes is a leading global digital transformation company. Our expertise in strategic consulting, data analytics, and technology focussed on developing custom feature-rich cross-platform mobile applications with advanced AR and VR capabilities have helped our clients emerge as eCommerce leaders in the respective domains. Reach us on how we can help you transition to an agile digital enterprise.