How can retailers adapt in a post-pandemic world?
This isn’t a one-off, between 2017 and 2018, the number of retail stores in Sweden fell from 35,953 to 33,688. And it’s not just a Scandinavian problem, countries around the world are seeing a similar trend.
The retail industry isn’t just important because of the stores we see on the high street. As well as being a major employer, retail is an important export for the Nordic region. IKEA and H&M both appear in the top 50 of Deloitte’s Global Powers of Retailing list. These brands are a familiar sight in countries like the UK and even the US. They aren’t alone, lots of Nordic brands have a global following, including Bang & Olufsen, Pandora, Tiger, Stokke and many more. The success of the sector is important to the region’s world standing and economy.
Customers are already demanding a more seamless experience between online and in-store. Familiar services like click and collect will still be important, and may even be adopted by more brands, but further integrating the online and offline experience will be key to survival for retailers, both on the high street and off it. Innovative store layouts, app integrations and a renewed focus on sustainability are just some of the key areas retail organisations must look to develop not just to survive today, but to prosper in the future. Below we explore some of these big ideas and the innovators driving them.
Creating new formats
Retailers are finding all kinds of ways to make bricks-and-mortar stores relevant. In December, Stockholm-based start-up Lifv, began transporting wooden containers to remote locations throughout Sweden — offering a lifeline to shoppers in hard-to-reach rural locations during the pandemic. The store, no larger than a mobile home, sells a range of essentials, including groceries and toiletries. The container is entirely unmanned — access to the store is gained via the app and payment is completed through the BankID app.
In Copenhagen, bespoke tailor Mond has added a 3D body scanner to its flagship store in the Danish capital. This technology connects the in-store experience with online buying. The company keeps measurements and key information in its database, making it easy to order additional items in the future. This combines an interesting experience with the ease of purchasing, helping to attract new customers and building customer loyalty.
The surge in popularity for click-and-collect and same-day delivery services in the last year has forced retailers to explore more imaginative ways of streamlining the order-to-delivery process.
At the height of the pandemic, Swedish pharmacy Apopket, responded to a surge in orders by using local stores as mini-warehouses to fulfil online demand. The switch enabled it to deliver goods faster and capitalise on the opportunity.
PostNord, in partnership with supermarket group ICA and smart lock company Glue, are piloting an ambitious ‘in-fridge’ delivery service which gives delivery drivers temporary access to a property. Drivers gain entry via an electronic keypad and then simply unpack the goods, transfer perishables to the refrigerator and lock the door on their way out. As these end-to-end services grow in demand, it’s unlikely customers will simply settle for the old way of doing things.
Making payments easier
The pandemic has helped foster a culture where customers demand easier, more flexible ways to pay — continuing to offer these services will be make or break for retail in the future. Retailers that offer features like buy now, pay later are seeing a dramatic increase in consumers using these services. Swish, one of the leading providers of this service, recently expanded its service to over 7 million customers and more than 200,000 merchants. While the global provider AfterPay doubled its customer base in 2020 to almost 10 million users.
Enhanced online experiences
Finland saw a 60% increase in eCommerce orders at the end of March 2020, and Sweden saw 49% growth in the second quarter of 2020. As online emerges as the key battleground for retailers, those that offer innovative and unique experiences will be rewarded. ASOS’s ‘See my Fit’ tool uses AR to bring ‘try before you buy’ to virtual platforms. Customers can see how clothes look, without leaving their home — or worrying about the hassle of returning items. By using these technologies, retailers can offer tailored experiences that help keep customers highly engaged. This can be an important differentiator in a competitive market and play a pivotal role in increasing brand loyalty and ROI.
Leading with sustainability
As the climate crisis shifts into focus, sustainability should be high on the agenda for all retailers. Some are already leading the way — Norwegian grocery chain Rema 1000 recently unveiled a concept store which aims to reduce energy consumption by up to 50%. The store is built using sustainable materials, with solar cells on the roof and recycled rock wool in the walls. As consumers become more environmentally conscious, investing in green processes, whether that’s in the office, the store or the warehouse, will become crucial.
COVID-19 may have been a one-off event in terms of severity, but there will be other disruptive events for retailers and online seems to be the one reliable constant. But the experience of the customer needs to be at the heart of every decision. Innovation is important to succeed, but understanding what customers want and how best to serve them should always come first.
Retailers shouldn’t chase after the next big thing in technology, the newest format or the latest gimmick just because they can — they should always be thinking “how will this serve our customers better?”.