How an omnichannel strategy will help retailers through the crisis
After ten long weeks, lockdown is finally starting to lift. According to new Government guidance, non-essential shops can begin to open their doors to socially-distanced customers from June 15th. It’s a big moment for a market that’s been thrown into chaos over the last few months.
But we’re not out of the woods yet. The damage caused to the UK’s retail industry has been near-catastrophic. Retail spend hit record lows, over 20,000 people lost their jobs, and non-food retailers footed a bill of £1.8bn per week as they were forced to shut up shop. Repairing that damage in an environment where consumers have lost cash and confidence is going to be a challenge.
It’s impossible to say how long it will take for retail spending to resume its pre-Covid levels. And with fears that a second spike will drive shoppers back inside their homes later in the year, even those retailers in a strong position now should expect the unexpected.
In such a changed landscape, there are no safe bets. But there are smarter ones. Investing in your omnichannel strategy could help you weather the storm – however long it lasts.
Consumer behaviour has changed
Lockdown has changed consumer buying behaviour. Studies conducted in the US looked at responses to the crisis across a range of demographics. Men were less likely than women to stockpile and cut back. Millennials didn’t adjust their outgoings as much as older shoppers. Those with more disposable income behaved surprisingly similarly to those with less.
And there are other trends emerging, too. Support for local communities and businesses has never been higher. Consumers have adjusted their shopping patterns to support local businesses and crucially, over half say they will continue to do so even after lockdown ends. And of course, the pivot towards online shopping has accelerated dramatically.
Obviously, that acceleration has been driven by necessity: consumers currently have little choice other than to shop online. But we’ve been in lockdown long enough now that those behaviours are likely to have become ingrained. Shopping online has provided consumers with greater choice, convenience and crucially, safety. They might not want to go back to shopping in-store, even once it’s safe to do so.
So where does this leave retailers with bricks-and-mortar stores? Has Covid-19 hammered the final nail into the High Street’s coffin? Well, not quite.
New channels bring new opportunities
For a lot of retailers, the switch to digital has proven enormously beneficial to business. Currys PC World launched video technology to put online shoppers in touch with store staff while shops were closed. Morrisons, M&S and Asda launched food boxes for online delivery. And it’s not just the big players: some drinks retailers have started running online tasting sessions as an alternative way to bring in revenue. Pubs and restaurants across the country have pivoted to become grocery stores, offer click-and-collect services or provide contact-free home delivery.
The question is what happens to those lucrative new business streams once lockdown lifts. Though they’re adding value now, the concern is that in the long-term, they’ll make already-struggling physical stores redundant even faster.
But there’s no reason they should. A good omnichannel strategy that joins up and optimises those channels will stand retailers in good stead as we transition into ‘the new normal’. Before the crisis hit, omnichannel was high on the list of priorities for most retailers - 67%, in fact. Now, it’s more important than ever.
Flexibility and customer experience are key
What retailers need to prioritise now is two things. One is flexibility, and the other is customer experience.
Let’s start with flexibility. The strong likelihood is that social distancing measures will continue to fluctuate for the rest of the year. There may even be a return to lockdown measures if we see another spike in infection levels. Either way, retailers can expect to see some volatility around how shoppers interact with them. Being able to flex around the personal preferences of shoppers will be important.
Which brings us to the second priority. Customer experience is key. And while that’s not news to retailers, the nature of the customer experience itself has now changed. As we ease out of the crisis, it’s critical that retailers give customers choice in how, where and when they want to shop. In-store isn’t going anywhere: for many, the richer experience of buying from a person in a shop will be something they’ve missed. Finding a way to balance your channels to provide the best experience – and to make sure all those experiences seamlessly overlap – will make it much easier to engage customers, stimulate spending and encourage long-term loyalty.
Unifying online and in-store channels
Technology that helps smooth out and marry up cross-channel experiences is a critical investment for retailers considering their post-Covid strategies.
Card-linking is one of them. Card-linking lets you securely capture real-time transaction data every time a customer shops with you – irrespective of channel. That’s important. In such a volatile environment, getting granular data that helps you understand your customers is the only way to ensure you’re making the right resourcing, marketing and messaging choices.
Typically, getting a holistic view of customer spend is hard for retailers. Affiliate links only let you see how customers behave online, and can get caught in cookie filters. Offline, you’re lucky to see much more than footfall. If you want actionable insights that drive footfall, increase spend, and improve customer loyalty, you need more information.
Card-linked loyalty programmes deliver that cross-channel data. They also provide incentives that will get shoppers spending again post-Covid. It’s simple: customers link their normal payment card to your loyalty programme. They shop as usual, and receive a notification in real-time when they’ve made a transaction that qualifies for a reward. Meanwhile, you get data including transaction date, time and amount and merchant ID, geolocation and category code. In the short term, the rewards give your customers real value on top of their everyday spend. In the long-term, the data uplift helps you tailor your offering and increase engagement.
Using data to optimise omnichannel strategies
There are a few ways you can use that data to optimise your omnichannel experience. Attaching all card-linked transactions to a unique, anonymised ID helps you create a Single Customer View, which gives you a more complete picture of exactly where, when and how much customers are spending with you. You can also attribute subsequent purchases back to the original touchpoint, freeing data from internal silos and getting a better idea of attribution.
As retail embarks on its long road to recovery, making sure online and in-store channels support rather than compete with each other will be key. To find out more about how Fidel’s card-linking technology could help, take a look at The beginner's guide to card-linked loyalty.