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Retail experts’ post-lockdown predictions

Friday 26 February 2021 Retail Consultancy

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By Chris Thompson. Hana Butt. Chris Lidington

Prospects for 2021 may seem uncertain in many retail markets. But there are clear trends and opportunities emerging, according to the specialists in CACI’s retail analytics practice. They’ve been working with retailers and studying market intelligence throughout the pandemic, so they have a bird’s eye view of customer and retailer activity and the forces that are driving it.

Like most analysts, they agree that many of the fastest emerging trends were already becoming established before the pandemic took hold. Covid-19 and the diverse consequences of lockdown have accelerated technology development and the evolution of consumer behaviour. Although some people have become starkly digitally isolated, for many million, the digital divide has been narrowed. Consumers have had to embrace digital ways to work and learn remotely and to socialise, engage and transact online.

Sudden and extreme online demand has created pressure on formerly small-scale digital operations. But our three highlighted trends present opportunities for retailers that are able and willing to embrace a sophisticated digital or hybrid model, as economies and nations emerge from lockdown.

                         

Trend 1: Hyper-personalisation and hyper-localisation

Retail intelligence expert Chris Thompson is Director of Location Analytics at CACI.

It’s clear that by late 2021, data will be integral for retailers to hear the full range of consumer voices and understand their expectations. As a result, hyper-personalisation and hyper-localisation are going to gain momentum rapidly.

What do these terms mean? Hyper-personalisation means creating communications content that we know is directly relevant to the customer – telling them about things they’re already interested in or are likely to want or need next. Hyper-localisation means sending relevant messages to the customer at the right time and in the right place, seizing the moment when it’s convenient or essential to purchase.

When high streets and outlets can re-open to shoppers in person, technologies in-store will recognise that the customer has arrived or is nearby and will suggest products and offers to consumers at the point of consideration. That’s both hyper-local and hyper-personalised.

It all hinges on making sense of the rich and varied customer data that’s more available than ever, because of the swing to digital shopping.

We’re already working with retailers to give them more precise consumer information through the latest data science technologies, so they can diversify format, range and omni-channel services to match local demand precisely.

As retailers look to re-engage customers, the trend will accelerate. Market share has been massively disrupted: real-time, hyper-targeted activity will help retailers stand out and create higher engagement and conversion across all channels.

 

Trend 2: Augmented reality

Hana Butt is a CACI Consultant who specialises in data insight projects for retail clients.

Augmented reality (AR) is going to differentiate retailers as retail markets re-adjust after lockdown. From the warehouse to the in-store virtual changing room, AR and AI technologies are already bridging the gap between physical and digital retail experiences.

Although many shoppers are desperate to get back onto the high street, some will be more cautious, and others will remain loyal converts to digital channels. They’ve embraced the advantages of virtual retail: a great shopping experience with excellent service, proven security and a controllable and healthy environment in their own chosen surroundings.

Not all online retail is like this of course, but the best in the industry have worked hard, particularly during the last year or so, to create an immersive virtual shopping experience. They’ve got the basics right already – good site design, range, availability and ease of use are all standard shopper expectations. But AR and AI help these innovative retail brands to surprise and delight consumers, moving the experience from functional to truly enjoyable. Sephora’s mobile app allows consumers to try out lipstick using the front camera – 45 million people have had a go!

For customers who are happy to be back in-store, AR will help them find information about products as they browse. They might scan a QR code or bar code on the shelf to access rich content immediately that shows the product in action or answers consumer questions.

AI and AR will create convergence between the online and in-store experience – the best of both worlds in both places, if you like.

Trend 3: Customer experience, engagement and trust

Managing Consultant Chris Lidington helps CACI clients apply insight in the convenience and retail sectors.

There’s been a huge online sales boom during the pandemic – but consumers aren’t necessarily behaving as you might imagine in terms of their shopping choices. Our own Super HALO research reveals that they are staying more loyal to brands they know and trust through a store network.

At first we thought that the shift to online shopping would be underpinned by deal-hunting and a price-driven mindset – after all, it’s easy compare and shop around online. But the brands we engage with are gaining full price sales and observe that consumers are coming directly to their online stores.

It’s not just deal fatigue. Consumers value experience and convenience. For instance, if they’re buying Levi’s jeans, they know that the official Levi’s store will have the full range of current styles and the experience will be reassuring and positive. They trust the brand to provide a quality end-to-end experience, including reliable delivery. Rather than going away to find the same product cheaper elsewhere, they’re choosing to buy there and then.

Brands that are making the most of apps and mobile technology are also seeing a good response from consumers, who like the convenience and utility.

A good example of genuine added value comes from Under Armour, the sports brand. Connecting their retail operation to their running app, they can remind consumers when their trainers have covered enough miles to need replacing and show them the best new model for their needs.

This is making the most of customer engagement – giving the consumer information or a service that they value through natural interaction. The consumer sees the benefit and uses the app regularly, feeding data back to the retailer so they can further build trust by recommending desirable and relevant products. It’s a virtuous circle: the continuing engagement gives the retailer truly personalised insight that keeps pace with the consumer’s changing needs and preferences, making interactions ever more useful and meaningful to the consumer.

 

If you’d like to find out about technologies and approaches for your post-lockdown retail success, talk to our experts. Contact Chris Thompson CThompson@caci.co.uk Hana Butt hbutt@caci.co.uk or Chris Lidington clidington@caci.co.uk for more insights and advice.

Get ready to act on these three key retail trends that will shape the market beyond lockdown.

Retail experts’ post-lockdown predictions