Technology

Expecting the unexpected: The final stretch of 2020 for online retail

Art Goldman, retail expert and chief financial officer of DK Hardware, shares his thoughts on the remainder of 2020 and how a customer-centric approach, based on genuine engagement, can go a long way during these unprecedented times.

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December 4, 2020 by Art Goldman

We started the final run of 2020 in a quite different way than we imagined it in January. Many of us are concerned with numbers: going from red to black. We want to reach the end of the year without losses (or with the lowest possible number of losses) and settle on something like normality, even if it is a "new normal." A normality of social distance and a mask that we are beginning to get used to.

But this pandemic aims to teach us that if we stay "looking at the box" we will not be able to adapt, we will not evolve. Profitability is important, of course, but what drives your business are people: customers and employees who can provide the same level of service or even better in a crisis. Sure, without customers there is no business, but also acknowledging what changed or what needs to be done to stay ahead in regard to how you take care of people within the company is instrumental for a sustainable success. The new normal is just that, NEW. And facing the new is always a bit scary.

Faced with uncertainty... more observation

Outbreaks, waves, phases ... You will have already gotten used to the idea that we are going to live with the pandemic for a while, its changes in direction and how it affects businesses and people. We have already seen some of these changes. How is our way of buying changing in the short and medium term? What consumer trends have we already glimpsed?

At DK Hardware, we engage daily with customers and learn from them. During the past seven months we have discovered that our clients are also in the midst of change, with the majority adapting to these unprecedented times whether by spending more time at home or thinking about the future and saving money when possible. It is possible to group this shift in consumer behavior in the following common themes and trends:

More digital: we already spent a lot of time with our mobile, but now we have learned to do more things on the internet. Buying online or taking an online training course are some of the things that many people did for the first-time during confinement.
Teleworking: although teleworking is nothing new, companies and employees have learned that it is possible and that it has many advantages. Everything indicates that this type of work will be combined with face-to-face work to a greater extent than before the crisis.
Fear and distrust: fear of contagion and concern for health, but also distrust in the face of economic uncertainty.
Extra saving: in the face of uncertainty we will value savings more.
Additional time at home: because of teleworking or fear, we spend more time at home. This also makes us worry more about home.
E-commerce growth: it is also nothing new that sales in the online channel were already growing. Confinement has accelerated this growth.
Consumption polarization: because of the economic crisis, the sale of low cost and luxury products grows.
Local approach: because we want to protect our economy, that of our city or country. And because we trust more in what is close to us.
Let us make a portrait of the "average consumer": let us call her Sara. Sara is now more home-based, more distrustful, she buys online more than before, she is more sensitive to price and is committed to local. But remember this is just the general portrait. We are not all Sara, in fact, we are all different, what are your clients like and how is this crisis affecting them?

One more step toward digital transformation

The low level of digitization for many retailers has taken its toll during lockdown. Fortunately, we are taking this matter more seriously. So maybe one of your plans for the final stretch of 2020 is to invest in digital transformation.

If you ask me where the digital transformation of your store should begin, I will tell you: inside. Before thinking about digital marketing actions or LED screens for your storefront, think about how to be more efficient thanks to technology and digitization solutions. Think, for example, of barcodes and how they made it easier to identify each product and control the stock. A solution to save time and even to provide clearer information for your customer. Now it is radio frequency identification tags that promise to facilitate all inventory tasks and save costs for retailers.

Or remember the old cash registers and compare them with your ERP or with the software of your store terminals. Now you can have data and know much more (and much faster) about your sales, your margins, your customers.

Stay more with "transformation" and not so much with "digital." And now think about your team, your daily work, and that portrait of your "new client." Only then can you find solutions (digital or not) that allow you to be more efficient and, in the medium term, more profitable.

Art Goldman is a retail expert and chief financial officer of DK Hardware.