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How Retailers Can Respond to Rapid Digitization and Shifting Consumer Behavior

Rapid Digitization and Shifting Consumer Behavior

As we look back on the major disruptions of the pandemic, it’s clear that COVID-19 accelerated many trends that were already emerging. Within the global business economy, and the retail industry in particular, the enormous surge of eCommerce adoption and digital transformation over the past 18 months has been absolutely striking. One shocking statistic from McKinsey reports that 10 years of eCommerce adoption was compressed into three months during 2020.

This often forced, rapid adoption of digital customer experiences and migration to online sales have resulted in a rapid shift in consumer behavior that otherwise would have taken years to occur. And it’s clear this shift is not temporary. Reports from eCommerce media indicate that eCommerce sales should reach $908.73 billion in 2021, an increase of nearly 14% from last year, when retail sales alone grew by 33%.

The numbers we’re seeing in online revenue alone are proof that the trend will continue to grow, even when the pandemic is in our rear-view mirror. In fact, COVID-19 wasn’t just a catalyst for eCommerce acceleration: it represents a pivotal moment in history that has resulted in a massive, permanent shift in consumer behavior toward self-serve, omnichannel experiences.

What does that mean for the retail industry? We know that even with the re-opening of many brick-and-mortar locations, the pandemic has forever altered the retail landscape. Shifting shopping behavior trends mean people often actively avoid visiting stores to buy products, especially essentials and commodities. According to AARP, even seniors, the customers slowest to adopt digital technologies, now prefer to research and buy products online. The benefits of eCommerce growth, from saving time to comparing prices, have become not only a preference, but a requirement for consumers, as in-person store visits steadily decrease.

Many retailers are finding that offering online shopping is not enough. This shift in consumer behavior also includes a desire for personalized, meaningful experiences as part of a seamless, omnichannel shopping experience. Customers must be able to easily research, transact and communicate on their own. The idea is to enable these experiences across all your digital touchpoints in a seamless way, so that the experience continues uninterrupted no matter the channel. This is not an easy endeavor, even for the most mature digital marketers.

In many ways, the pandemic rewrote the rules of retail, with a shift in consumer behavior post-COVID toward a desired customer experience with digital now permanently at its core. Your website must be the cornerstone of a desirable customer journey, an arm of your business seamlessly serving each customer according to their own unique preferences and needs.

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In addition to rapid acceleration to digital and ecommerce channels, other related trends should not be ignored. The desire to self-serve brings with it several other consumer preferences that online giants like Amazon are rapidly transforming from wants into expectations. For example:

  • Personalized customer experiences chasing the holy grail of the “audience of one” are fast becoming a competitive differentiator in this post-pandemic digital landscape. Driven by advanced data practices, personalization and 1:1 marketing deliver on the customer’s expectation that retailers will not only know who they are, but predict their needs and guide them to the right products and services.
  • Even before Covid-19, mass retailers were getting more sophisticated with their supply chain and logistics. The disruptions from the pandemic impacted retailers’ ability to rely on supply numbers, pursue real-time inventory, and efficiently distribute products. The companies with the resources to pivot and continue serving their customers extended their lead. Many retailers invested in technologies like AI, automation, and machine learning, which speaks to the value of a digital supply chain in helping navigate disruptive forces and respond faster to volatile supply and demand.
  • The need for fast, convenient fulfillment including in-store and curbside pickup options exploded during the pandemic and continues in high consumer demand today. This new hybrid shift in consumer behavior means that fulfillment needs must also be customized based on seasonality, location, products and other factors.
  • Retailers must incorporate third-party marketplaces into their online sales strategies. A seamless omnichannel experience for your customers might mean selling through other eCommerce platforms, or opening your platform to other retailers. Retailers need to be able to exchange data, fulfill product sales and enable other important customer interactions in their own customer experience, and in others.
  • Finally, this explosion in digital transformation means greater risks in terms of consumer safety and security. Retailers, even small ones, must assess security risks on an ongoing basis, including the need for data protection. As online giants and finance organizations become more sophisticated at real-time planning and mitigation, smaller retailers must understand that this is fast becoming a customer expectation for any online experience.

While the rapid acceleration of digital transformation combined with this massive shift in consumer behavior may seem overwhelming, retail leaders need to understand that no one is expecting them to become the next Target, Walmart or Amazon. In fact, the uptick in online sales due to COVID has created more demand for online experiences across the board. Retailers have more online revenue opportunity than ever, and online sentiment for smaller businesses with more personalized attention is strong.

Avtex can help you take advantage of this shifting customer behavior and help you better understand where eCommerce can further benefit your overall customer experience. Even if you’re brand new to the idea of a seamless, omnichannel experience, Avtex can help you build a robust online commerce presence in less than four months leveraging Microsoft Dynamics 365.

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