The world of the retail industry has undergone a dramatic transformation in the past 12 months on the back of a global pandemic. While not only much has changed in the way that consumers behave, retail operators had and still have to adapt to ever changing conditions as well.
Watch the full interview or listen to this episode:
The Impact of eCommerce & Digital Disruption on Retail
Looking back 15 to 20 years ago, a lot of competitive advantage was based upon physical location. Many retailers got away with just being slightly better-than-average, mostly due to having historical advantages. This has changed fundamentally.
The consumers of today got more power, more choice, more access: As more things become abundant, the choices about places to shop, the selection that consumers can access and the growing amount of information – according to Dennis, all of that makes it harder for businesses to even get the customer’s attention amid all the noise and distraction.
Emerging competition, in particular the rise of eCommerce and digital retail solutions, has shown that a lot of retailers have underestimated the need to transform their business models and the degree to which consumer power has shifted. Digital access has reset the playing field.
The Pandemic as Accelerator of Change in Retail
The past year has sped up the timeline of technological change for the whole retail industry. Corona has been blurring the lines between digital and physical channels. Retailers that were behind in their digital transformation, were basically forced to evolve.
The shift to digitally driven shopping journeys and eCommerce has been accelerated. Digitally-enhanced retail operations like curbside pickup and in-store pickup, live streaming and virtual shopping have climbed to the top due to the convenience they bring to the table, but out of necessity as well.
Many businesses that were not changing fast enough before, had to catch up and transform their operations rapidly. Corona has compressed many retailer’s timelines to transform their business processes to under a year.
Cultural & Operational Evolution of Retail
According to Dennis, many retailers did not embrace new concepts like BOPIS (buy online pickup in-store) as aggressively as they should have, until they were basically forced to do it. So there is an aspect of innovation where retailers took too long to innovate when others were going digital years ahead.
The more businesses map out customer journeys and the more they understand whether the journey is digital, physical or some form of hybrid combination of both, the more opportunities they create to gain a competitive advantage.
To be ahead of the game in terms of understanding how customer needs are evolving to cater to them more effectively and efficiently is a whole shift in thinking and highlights the transition of control and power from retailers to consumers.