JoAnne Monfradi Dunn, CEO and founder at Alliant
The pandemic has dramatically shifted the way that we buy things. With stores no longer feeling safe, many consumers have turned online.
According to Digital Commerce 360, ecommerce grew 32% in 2020 from the prior year, accounting for nearly 75% of the total retail gains in 2020 (the highest share of overall annual growth the online sector has ever represented).
We’ve known for a long time that ecommerce would reach this point. It was a question of when, but now it’s a question of whether things will stay this way or slide back a bit and resume a more normal growth trajectory. That’s a tricky question to tackle at the moment because it’s not clear exactly when normal life will return.
Vaccinations have finally arrived, so a turning point feels within reach. That’s a relief for retail, which has survived through many tactics: the shift to ecommerce and near-universal adoption of curbside and in-store pickup at physical locations. Once we’ve received our shots and ditched our masks, what’s the retail playbook look like? The truth is that there’s no one set of rules for every retailer: instead, retail will have to be flexible, and each retailer needs to look at what worked for them during the pandemic and stay closely in tune with their customers.
Mining the data
The first task is deciding what’s here to stay. For those who just adopted ecommerce in 2020, that method of selling isn’t going anywhere. But services like curbside or in-store pickup that feel like stopgaps may be the deciding factor that helps some retailers continue to win business. The key is for retailers to figure out if it’s right for them.
Performing a segment analysis on purchases over the past year can give retailers a wealth of insights to draw on as they sketch out their post-pandemic plans. The need to drill down to identify specific trends in their customers’ buying habits is critical for finding a clearer path forward.
Ecommerce vs. in-store
Again, ecommerce is here to stay. The level of investment will depend on how big it was with buyers during the pandemic. Retailers should look at how many of their loyal customers moved from in-store buying to ecommerce and how many of those moved to exclusively ecommerce purchasing. Then, look at how many customers used online payment and in-person pickup options against those who chose shipping directly to their house.
This analysis will start to paint a picture of how customers are likely to interact with a retail brand post-pandemic. If a considerable number of customers that once shopped exclusively in-store are now using curbside pickup, then that’s an incredibly valuable service to continue offering. If most loyal customers turned to ecommerce exclusively, then marketing and ad budgets need to be adjusted to reflect this.
Measuring new customers
The sudden need to make purchases without leaving the house forced consumers to turn to brands and retailers they’d never used before. Retailers are already analyzing their data to determine how many of these customers will become long-term buyers. To keep and curate relationships with some of them, they should also look at how those new customers first came on board.
Were they predominantly coming through ecommerce? Were these ecommerce purchases driven by email, social, catalog or direct mail? Did previous occasional customers become repeat ecommerce buyers during the pandemic? Did occasional buyers make repeat in-store pickup purchases?
Assessing these patterns can help retailers determine what services to keep, what services to market and even the marketing mix they deploy to keep customers and find new ones. If the data is robust enough, you can even start to organize it to create new affinities or variables for your modeling practice, such as “likelihood to purchase for curbside pickup.”
The future of retail is not the same for every single player. If the pandemic taught us anything, it’s that there are no uniform answers, and businesses of all kinds need to adapt. Consumer behavior patterns and data are valuable forecasting tools that can guide retailers through the next transition and bring them into the next frontier.
Alliant provides consumer marketers with data-driven audience optimization software.
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