Co-Founder of Heyday AI, a conversational commerce platform for retailers. Forbes 30 Under 30 in 2018.
The retail world had its fair share of struggles before the coronavirus crisis. Headlines announcing store closures from retail titans became almost routine for business publications.
Already under immense pressure, it seemed like retailers didn’t need yet another disruption. And then 2020 said, “Hold my beer.”
With the shutdown came a slowdown of epic proportions. For many retailers, this was the last nail in the coffin. For others, it triggered the acceleration of digital transformation plans that were long overdue.
E-Commerce: The Big Winner Of The Crisis
As Sun Tzu said in The Art of War, there’s opportunity in chaos. In April, McKinsey shared its “thoughts on the shape of the next normal,” in which it identified e-commerce, along with telemedicine and automation, as the key verticals that would thrive in the aftermath of Covid-19.
It’s hard to refute. As Neiman Marcus shut down its stores, Amazon hired an additional 175,000 staffers to meet the surge in demand. In Canada, Shopify’s stock more than doubled since March to displace the Royal Bank of Canada to become the country’s most valuable company. In Italy, e-commerce transactions went up by 81%. This is a global phenomenon. Three years of digital transformation happened in the last three months.
Before the crisis, e-commerce was already the future, but it wasn’t evenly distributed. Until now.
The Rise Of The Contactless Economy
Digital sales are surging, but the changes are much more profound. New consumer habits, fears and expectations are being forged, and with them, new business imperatives. This new social and economic environment is paving the way for the rise of “contactless commerce” (or “touch-free retail”).
According to Google Trends, the search for the keyword “contactless” has tripled year over year. Consumers want to shop, but they want to do it safely and avoid contact, which forces retailers to be more creative and empathetic when rethinking the in-store experience.
Enter The Contactless Store
So what does this mean for the retail store? In 2020, Amazon has doubled down on its Amazon Go initiative, a checkout-free experience that could pioneer a new path forward for retailers.
The “Just Walk Out” model uses technologies including deep learning, sensor fusion and computer vision. Thanks to its app, a virtual cart is built as a consumer navigates the store and picks up (or puts back) products. Once they leave the store, they are automatically charged on their credit card and sent their receipt.
While innovation at Amazon might be expected today, what’s more interesting to witness is how other retailers are quickly adapting to sell in new contexts. Many brands are experimenting with new ways to connect with consumers and sell from a distance. We’ve witnessed four fundamental shifts that are changing the face of the retail store:
Experiential Vs. Tactical
The flagship store has historically been a cornerstone of the retail experience. Its experiential function, now greatly diminished by social distancing, will morph into a tactical one, designed for distribution. At the intersection of a showroom, a warehouse and a point of collection for curbside pickup, the flagship store remains a strategic pillar, but it loses, at least in the short term, its immersive and experiential attributes.
We’re now seeing more stores rolling out new store fulfillment systems, where customers can place their orders online and pick them up in-store without any human contact by leveraging a contactless mobile checkout.
Physical Vs. Virtual Products
Physical products that we’d normally love to touch, feel or try on have posed a particular set of challenges for retailers. Thanks to augmented reality, smart mirrors and QR codes, physical products can now be augmented to create virtual showrooms both in-store and online.
In June, fashion powerhouse Gucci partnered with Snapchat to launch the social media platform’s “first global branded AR shoe try-on Lenses.” The experience invites users to overlay a digital version of its shoe on their feet, with a “shop now” button, enabling users to buy the product instantly.
Public Malls Vs. Private Appointments
The retail experience has always been very physical and public. In the midst of the pandemic, malls are suffering greatly, and one way retailers have found to welcome shoppers back to their stores is by booking private appointments, either for virtual consultations with a makeup artist or in-store with a personal shopper. Many beauty and luxury brands are adopting this strategy successfully.
The result: enhanced personalization and customer satisfaction, along with boosted conversion rates. People no longer window shop; they come to the store on a mission.
Store Associates Vs. Virtual Advisors
Sales reps are also migrating online to connect with stay-at-home shoppers. For consumers shopping outside business hours, chatbots and virtual assistants can augment internal teams to offer an instant and seamless service 24/7 and make sure your brand is always available and open for business.
As such, conversational commerce is also becoming a key pillar of the contactless economy. For example, one of the biggest supermarket chains in the world, Carrefour Group, partnered with Google during the pandemic to launch a voice-activated grocery service in France.
Consumers are increasingly attracted to self-service options, both in-store and online. And they’re expecting this level of service to be available across multiple channels, both text and voice based. At Heyday, we’ve seen, on average, a 300% uptick in online service requests across all our retailers.
Personalization: A Silver Lining
Contactless commerce can sound scary and dystopian. But the silver lining is an opportunity to “get closer from a distance” by connecting with consumers on a one-to-one level and further personalize their shopping experience like never before. From virtual consultations to in-store appointments, the emotional toll the crisis has on your consumers is the perfect context to show you care and set the foundations for enduring customer relationships.
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Author: Etienne Merineau, Forbes Councils Member