Introduce digital business processes in your retail stores to cope with the negative effects of Covid-19 on footfall. Continue reading for a few best practice examples!
Covid-19: A Phase of Introspection
At the peak of the lockdown phase in Central Europe I began to write down my thoughts and feelings about what was happening to public and private life. My objective was to keep personal record of what will hopefully be a once in a lifetime experience, and to allow me to return to my notes later and see what I can learn from this period.
It is more than just a picture of the family at home, either working from home or home-schooling and being home-schooled. It is a reflection of my state of mind during this time of crisis. And I can already see now that my thoughts were often driven by the heat of the moment rather than always very rational or logical.
Fashion Industry Introspection: Digitalisation and Seasonal Timing
Similarly, the pandemic has resulted in a lot of introspection within the fashion industry to identify what needs to change. While there may be much to choose from, let me pick the one that is closest to my heart: digitalisation.
The industry discussion is currently dominated by digital tools to facilitate working from home as well as digital trade shows, I want to focus on the digitalisation of the shopping process. And in my next article I will have a closer look at seasonal timing, a topic that deserves its own space.
Digitalisation Acts as the Fashion Industry’s Face Mask
Digitalisation has been one of the industry’s favourite buzzwords for some years now. But whoever thought that the trend towards shopping via digital channels was surely going to slow down… boy were they wrong.
If physical distancing is what’s required to contain the spread of the virus, digitalisation is the ‘face mask of the fashion industry’, so to speak: it protects your retail business from the negative impact of people not feeling comfortable (or not being allowed) to shop physically.
Judging by the numbers, the verdict is clear. Zalando has changed its yearly outlook from negative to positive. Zara’s online business grew by 50% when stores had to close. And marketplace aggregators like onQuality see growth for their clients across all marketplaces.
The big question that physical retail faces is this: Will shoppers return? In other words, will physical shopping go back to pre-Covid-19 levels once a vaccine is available and we have learned to live with this new virus?
Looking at the numbers below, I strongly doubt it. Just like we have seen with excessive and unnecessary industry practices that we were used to, for example constant physical presence at an office or frequent business travel, ‘going shopping’ is likely to remain a pastime in the future.
However, I am sure that the share of people participating in it will permanently remain at a lower level than pre-Covid-19. Numbers for Kärtner Straße, one of the busiest high streets in all of Europe, for example, remain 35% lower in June 2020 than before the lockdown in March.
Judging by the numbers, many shoppers must have turned to digital channels for the first time. ZALANDO, for example, was able to attract +39% new customers in April 2020 (vs. April 2019). And, given the company’s simple and efficient order process, its smart marketing tactics and loyalty programme, I would be surprised if a majority went back to physical shopping entirely.
So, while the stock markets have rebounded in a sharp V-curve, physical consumer shopping behaviour might have taken a jump down to a lower level and could remain there for some time to come.
Click & Find / Pay / Collect: Best Practice Ideas to Digitise your In-store Processes
Adjusting to this new reality will require an approach that redistributes the allocation of funds away from purely physical assets and processes to digital channels and the processes that support physical stores in making shopping in a post Covid-19 world efficient and enjoyable.
And if you thought that ‘experiential retail’ (like an endless surf wave in your sporting goods store) might be the answer to all your worries, think again. In the current environment, the customers that make it to your store may want to get out as quick as they can, at least as long as they are required to wear a facemask while shopping.
Some indication as to where this might lead comes from ZARA. The retailer announced that they will invest large sums into digitising their in-store processes and online channels.
Interesting features that are allegedly part of ZARA’s ‘store mode’ strategy focus on an optimised checkout process via app. No more standing in line (alongside other people) at the cashier. A ‘click & find’ process will furthermore help you find individual items on shelves and is built to increase the speed and convenience of what remains of a physical shopping experience.
Other interesting examples focus on delivering a service at home that previously took place in a store environment. Take for example the American Fashion retailer Nordstrom. They offer live digital personal stylists that help you curate your look from the comfort of your home.
Or take Chanel’s virtual makeup chat, where you can book 45 minutes with your personal ‘Master Artist’.
Or even Lacoste with their ‘Street & Collect’ initiative. Here, QR codes attached to the store window inform customers if their favourite item is actually in stock at that particular location. No need to step inside just to find out!
While these are clear initial signs of where physical retail may be headed in this post Covid-19 lower-footfall world, for the majority of retailers, the road to digital success is still long and twisty.
The Crystal Ball
Do you think I might be overreacting due to my enthusiasm for digital shopping processes in general or support for digital marketplaces in particular? I invite you to come back to this article sometime in the future to see how close to reality I was. Just like with my personal introspection, it will be great to discuss this topic and see what we can both learn from these turbulent times.
If you have come across additional best practice examples of digitalisation in retail, please let me know by commenting below or getting in touch with me via LinkedIn.
About the Author:
Christoph is a consultant in strategy development and process optimisation for fashion brands and retailers. He has more than 15 years of experience as a consultant, line manager in the sportswear industry and in e-commerce marketplace distribution. Read more of his work here.