As retail organizations battle lockdowns in different parts of the world due to the coronavirus, Forrester estimates that the industry will suffer a loss of US$2.1 trillion globally in 2020. In Asia Pacific alone, revenues are expected to fall by US$767 billion, a 10 percent decline over 2019 figures.
In China, where the pandemic first took root, Kearney’s estimates indicate a loss of up to US$42 billion in the first quarter of 2020 alone.
The numbers don’t lie. The retail landscape has changed and businesses need to change their priorities if they want to survive.
With the rise of e-commerce, a near or mid-term goal for retailers was to build an omnichannel experience that engaged with customers online and brought them into stores to complete their purchase. For most businesses, doing this seamlessly and effectively was part of an ongoing journey to digital maturity.
As a result of the global pandemic, customers’ expectations have changed. The new normal in the retail industry is that there is a premium on safety and security because of the social distancing norms instituted by governments battling the coronavirus pandemic.
Truthfully, employees in this industry also expect changes to be made in their workflows and environments, to keep them safe as cities and countries ease out of the lockdowns that have been put in place.
The way to meet the expectations of customers and employees in the age of the new normal is to leverage intelligent digital tools and solutions. Without a plan of action, however, it is difficult to hone-in on what the right investments will be, especially with margin pressures rising industry-wide.
Working with Cisco’s significant portfolio of clients in the retail sector during this global crisis, I believe that organizations in this industry have two key areas to focus their digital efforts on.
# 1 | Providing a great, digital-first customer experience
As a result of the coronavirus pandemic and the various lockdowns that have been instituted, consumers are buying essentials as well as other goods on online platforms and placing a premium on safety measures in the physical space.
As a result, retailers, especially those that aren’t digital natives such as Muji Japan and The Shoppes at Marina Bay Sands, are struggling to manage online traffic and ensure seamless and secure digital e-commerce transactions.
To thrive, these organizations need to quickly acquire application performance management and analytics capabilities that allow them to convert new-age customers into loyal, happy shoppers. Further, as most of the transactions are performed online, including payments, an upgrade to cybersecurity measures is strongly recommended.
Safety measures such as ‘curb side deliveries’ introduced during the lockdown by leading retailers such as Best Buy and Walmart allow them to purchase online and pick up their orders from the curb, without getting out of their vehicles.
While this might require an upfront investment on the retailer’s part, it is expected to pay off for years as customers value the offering.
To capitalize on these trends, Cisco’s clients rely on AppDynamics, Webex, Meraki, and other solutions in our portfolio to delight their customers during and after the pandemic.
# 2 | Leveraging technology to boost employee safety and productivity
With social distancing in effect, retailers need to protect their staff, whether they’re on the shop floor, in the warehouse, or working from home to support the organization and its customers.
For the latter, retailers that really want to make an impact can transition quickly and seamlessly. For inspiration, they could look to T-Mobile who made headlines when they provisioned for 12,000 call center employees to work from home in less than two weeks, at the start of the pandemic.
Organizations looking to achieve such feats often turn to Cisco’s solutions such as Webex and Meraki Remote Work Solutions.
At the retail store-level, we’re constantly working with our partners to create interesting future-proof solutions.
To help comply with social distancing norms, for example, Cisco Meraki’s integration with V-App allows retailers to use video feeds from smart cameras to electronically manage the number of customers in a physical store at any given time.
On the shop floor and in the warehouse, however, the changes are more demanding and need a little more out-of-the-box thinking.
For example, in the inventory management space, we’re able to deploy everything from sensors to robots, and leverage the internet of things (IoT) — in a secure manner — to implement social distancing and contactless handling of goods, optimization of warehouse operations, and improvement of the supply chain, among other things.
For those looking to future-proof their systems, Cisco uses plenty of artificial intelligence, machine learning, and even augmented reality, boosting the worker/employee experience significantly while also reducing costs as well as human contact at every step.
Identifying and tapping into synergistic, new opportunities
Social distancing and working from home are the new normal. For many industries, working from home has been kickstarted as a result of the pandemic but once the lockdown ends, going back to the office won’t be an interesting proposition.
For retail, there is no denying that customer and employee expectations have moved. Permanently.
Deloitte, who is monitoring consumer concerns during the pandemic on a bi-weekly basis, sees personal safety and family health become top priorities and finds that anxiety is rising globally.
Organizations that want to thrive in the new normal need to find ways to adjust to this reality. As McKinsey recently said, loyalty is set to take a big hit because customers want to buy from shops that are close to them or at least provide safety and security during the pandemic, as much as they offer convenience. This is as true in Asia as it is in any other market.
At Cisco, we help our clients explore our portfolio of integrated and intelligent solutions to delight customers and employees in the retail industry by helping them with what’s most pressing today – security and safety — in a digital-first and physical-smart ecosystem.