In 2020, the world is upside down: in only a few weeks many markets came to a full stop, where in many occasions non-essential stores had to close, consumer behaviour was impacted massively by lockdowns and social distancing and retail companies are adapting to the new normal. Which trends that were a top priority in the past are still relevant since the Covid-19 outbreak? What has changed? We identified shifts in the points of differentiation during the pandemic and we captured them with the 5 E’s: experience, efficiency, environment, ecosystems and expertise.
Experience is not a necessity.
Consumers value a calm shopping environment and preferably want to check online on how busy a store is. But it does not stop here. 72 percent of young people want to see stock availability at home (Q&A, 2020). Another trend that got a boost since corona is contactless and digital payment. Amazon developed Amazon One, a technology to pay with your hand balm in the future. In the past, customer experience was promised to be the game-changer in retail, but now we can observe a shift from physical experience towards digital engagement.
Efficiency is indispensable.
In order to survive retailers have to prioritize convenience and inject innovation into the customer journey that increases efficiencies. Some retailers such as Carrefour or Albert Heijn offer navigation apps for the stores so that customers find the right products quicker to reduce the time spent in a store. Amazon Fresh offers the smartcart which is scanning all groceries as soon as you placed them in the cart. This allows a seamless and fast checkout.
Environment is key.
In 2020 there is an enormous shift towards taking care of one’s personal health and being concerned about social responsibility. The pandemic came as a reminder for many that their health is not for granted. People are not only concerned about a safe and clean shopping environment but are also willing to invest more into a healthy diet, supplements and mental health offers. In addition, the customer of 2020 is more concerned about sustainability and social responsibility. In line with this trend, the expectations on retailers to take their share of responsibility rises respectively.
Ecosystems will replace omnichannel.
The strategic importance of ecosystems is accelerated due to Covid-19. Hand in hand with the convenience trend, consumers expect frictionless AI solutions to search, try, access, buy and return products. They want products to be available and accessible at all times through all channels. When looking at China, we can learn from their platforms and channel integration. Will there be a global We Chat in the future? Tech giants such as Google and Amazon are at least working on expanding their platform network by working closely together with retailers. With Google Assistant, for instance, everyone is already able to order groceries from his or her preferred supermarket.
Expertise can make the difference.
In a world of seemingly indefinite supply consumers are overwhelmed when it comes to choosing the right offer. Therefore, the need for expertise and, hence, excellent customer service is rising. Many retailers adapted quickly during the lockdowns by replacing expert store advice by online appointments. But offering expert advice is not only advantageous for customers. Retailers can benefit from it since customer loyalty and return rates are very likely.
The pandemic made massive shifts in how we were used to create a point of differentiation. The 5 E’s give guidance in this change. The former importance of customer experience is replaced by customer engagement. Top priorities for retailers are convenient solutions for customers and taking social responsibility about the environment. Retailers can win by expanding into ecosystems and can differentiate by investing in expertise.