The retail sector has been one of the most affected by the current COVID-19 pandemic. All those products intended to satisfy a desire such as clothing, fashion and luxury products have suffered a sharp decline in income, generated by the temporary closure of the retail chain, being forced to lay off much of their staff.
At Atrivity we want to continue to add value and show the positive side against this uncertain backdrop that the retail sector is facing. In order to face this situation, brands are obliged to give impulse to the digital channel and strengthen the relationship in view of the strong presence of e-commerce and the peculiarities of the physical future store. For this reason, we wanted to simplify this transition, compiling the 7 essential steps for the digital transformation of retail for this year 2020.
Step 1 - Automate most of your processes
Automation is known to be one of the processes that offers a superior growth impulse, significantly improving speed, reducing costs and sustainability throughout the supply chain. Today, in reference to the situation generated by COVID-19, automation will take on a more prominent role. Why? One of the biggest challenges facing retailers is the need to take appropriate security measures.
Companies from the fashion industry that impose efficient measures for the protection of health and safety of both customers and employees during their overall operations will enjoy a clear competitive advantage. Investing in process automation will minimize physical contact in stores and warehouses, while increasing the agility of online shopping and the user experience.
Step 2 - Increase shipping and distribution capacity
The Coronavirus crisis is making difficult in some cases to ship and distribute products. To offset the negative impact on business, many retailers have chosen to make employee deployment more flexible across a wider range of activities. What are the benefits of this solution? According to McKinsey & Company, fostering new models of collaboration between retailers and distribution centers will be a key focus. These new synergies have the function of increasing distribution capacities and allowing employees to have a greater facility to meet customer demand.
At the same time, employees will need the necessary training to be able to adapt to the new environment they will face in the "new normality" and in the shortest possible time. For this reason, the use of mobile apps based on gamification like Atrivity, allow you to communicate instantly corporate information and associate the training content with game dynamics that ensure the correct absorption of knowledge. Afterwards, measure and evaluate the results of learning without the need to stop operations.
Step 3 - Customize your customers' digital experience
The return to the new normality will be accompanied by an increase in the digitization of the product development processes and product sales. In the same way, digitization must go along with customization of the experience. Something that has already helped several companies to increase up to 30% the lifespan of customers.
The most obvious customization actions have focused mainly on offers, promotions and benefits that are adapted to the individual needs of the customers. The flagship store model is a great example of a store focused on offering a special customer experience. This type of store does not seek to sell a product, but rather the brand image so that the user feels closer to the firm. To do this, it is necessary to create both online and physical interaction: omnichannel... this leads us to the next step!
Step 4 - Create a great Omnichannel experience
The closure of stores, department stores and shopping centers has led to a drop in offline purchase intention of 80%. On the other hand, we find that the purchase intention through online platforms has grown in the month of April 2020 by 31% in the case of Italy. These data indicate that increasing efforts in digital sales is one of the ways to overcome the negative effects on your business.
Another aspect drawn from the analysis is the lower profitability per square metre of the stores, which will lead to an increase in the performance of any omnibus operation. What do we mean? Retailers will be forced to innovate from in-store screens, allow online shopping and in-store product pick-up, and even fully integrated management of in-store and warehouse stocks to provide the best customer experience.
If you want to know more about how to create a unique omnibus experience and boost sales of your business, at Atrivity we recommend reading our blog post "#6 Pieces of Advice for Retail Success".
Step 5 - Stockpiling? Optimize your resources!
The sudden stop of the activity by the fashion sector has caused that a great part of the stock of the past collections has been accumulated. According to McKinsey & Company, the approximate value of the excess inventory of the spring/summer collections in 2020 is 140 to 160 billion euros worldwide (of which 45 to 60 billion euros come from Europe). Therefore, the liquidation of the excess stock in an optimal way will be a top priority.
How can resources be optimized? The best performing retail companies have invested in sophisticated analytical tools to obtain the necessary information on which policies to apply. How? By dynamically simulating demand by channel, country and store, companies are able to redistribute inventory to future seasons or accelerate price reductions while minimizing economic losses!
Step 6 - Attract and retain the best talent
One of the most important steps in completing a successful digital transformation is attracting and retaining digital talent. What profiles are we talking about? All those e-commerce specialists, data engineers, analysts, user experience designers, software programmers, will be in great demand. If you are interested in knowing techniques and tools to attract the best talent, we invite you to read our blog "5 techniques + tools to captive the best talent".
In parallel, the retention of this type of employees will require companies to offer initiatives such as professional growth plans, constant learning and development, and performance management. Thanks to digital solutions such as Atrivity, you will be able to include individual or team challenges with the aim of transmitting company values and knowledge. It also allows you to transform your training content into little pills to encourage continuous learning and professional growth of your workforce.
Step 7 - What will the new consumer habits of the customers be like? Digitize your strategies and adapt!
The way consumers consume and their preferences will never be the same, as they were in the 2008 crisis. The communication consultancy firm LLYC has prepared a report on the evolution of the impact of COVID-19 on the evolution of consumers and brands. The main conclusion drawn from the document is that the crisis will cause the retail sector to have to be more responsive and communicate more transparently and authentically.
For this reason, digitization and the development of tools supported by AI will be key to "listen" to the customer, to know better the needs of the public and to obtain a huge capacity of adaptation. Even retailers such as Pepe Jeans are going one step further, ensuring that customer consumption will be more responsible, selective and focused on individual needs.
The conclusions of the Atrivity team
It is clear that the COVID-19 pandemic will make the year 2020 difficult for businesses. At the same time, the retail industry is experiencing an opportunity for creative change to offer new values and services to its customers, relaunching the essence and purpose of each brand through actions in the digital realm. The key to a digital transformation is to leverage electronic resources and databases to create a competitive advantage and strengthen the business focused on omnicanality.