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The changing tide of retail CX
Carlos Zapatero, a business development executive at SYKES, explains how the events of 2020 accelerated a shift in retail customer experience to become more flexible and consistent — and may be the new standard well past the pandemic.
December 29, 2020 by Carlos Zapatero
The pandemic accelerated the future of the retail customer experience in unprecedented ways. Here are a few of the ways it's taking shape.
Though gone are the days when the retail customer experience was composed entirely of an in-store, cash-only, box-and-bow shopping journey, the pandemic has accelerated the use of curbside pickup, contactless payments, and delivery. And even more telling to the future of retail CX? Consumers are embracing it.
The evolving consumer mindset surrounding retail may not be surprising, but how fast it's shifting is. In a recent SYKES study highlighting consumer perceptions of retail during the pandemic, most respondents said they believe retailers will prioritize online shopping this year, and their comfort levels for in-store shopping varied greatly. As consumers not only become more attuned to an online shopping experience, but also highly expectant of a positive one, retailers must place as much emphasis on their digital CX efforts as they do on brick-and-mortar.
In short, the events of 2020 accelerated a shift in retail CX to become more flexible and consistent — and may be the new standard well past the pandemic.
Counter to hopes, the novel coronavirus showed no signs of easing throughout the summer months, and retailers around the world geared up for a very unconventional holiday shopping year. In fact, many retailers were already rethinking their CX strategy before the full impacts COVID-19 became apparent.
To this point, in February 2020, 16% of retailers planned to implement mobile checkout services for consumers within 12 months. The fact that retailers had already begun shifting their CX focus to become more digital — a focus that was, of course, accelerated in unprecedented ways — is a tell-tale sign that the industry believed a blended digital/physical future was looming.
Online stores are displacing brick-and-mortar stores
The new form of retail CX means more ways of shopping — including the traditional. And indeed, many customers plan to go back to brick-and-mortar shopping after the pandemic. As shown in SYKES' retail survey as referenced above, 26% of respondents say they will feel comfortable shopping in person when a vaccine is available, 22% say they'll return to stores when cases are under control in their area, 22% when U.S. cases are under control, and 27% aren't sure.
But for all of those planning to return to in-person shopping, there is a sizable faction who is shopping more online — even in times when they might typically visit a store. In a Drive Research report highlighting why consumers do not plan on going to physical stores on Black Friday, reasons abound, including too many crowds (61%), not worth the hassle (48%), long lines (41%), and better deals online (26%). These barriers have pulled customers away from physical stores for years, long before the pandemic forced their hand. If retailers are able to optimize their CX to match (or exceed) an in-person experience, digital may become the dominant force of retail.
An uptick of high-dollar clicks
If a high-quality online experience is the pathway to retail CX, flexible buying channels are the vehicle that gets you there. Today's consumers are digitally fluent and not afraid to purchase top-dollar items on the go. Traditional retail CX assumed an in-person "test drive" for items like TVs, cell phones, and computers before the purchase. However, the ability to buy and sell with a click has completely upended that traditional need.
In fact, e-commerce sales of high-ticket items have increased steadily since 2003 and remain on par with brick-and-mortar revenue. That revenue, of course, is expected to climb. According to the U.S. Census Bureau's 2018 Annual Retail Trade Survey, $55 billion was spent on e-commerce consumer electronics and appliance sales, and that number is expected to exceed $70 billion by 2024.
The unknowns of COVID-19's future in 2021 will, if anything, accelerate widespread acceptance of e-commerce. Only 58% of respondents in our survey believe U.S. retailers will try to entice consumers to shop in-store this year, and 41% plan on shopping online. As expectations remain that the virus will continue to spread well into 2021, retailers should expect the e-commerce trend to continue — and optimize their online CX to match.
The rise of a contactless culture
While physical retail traffic has increased since April 2020, when it saw a 96% drop from January numbers, people are gravitating toward digital means of shopping for benefits beyond protecting their health. In fact, Black Friday, the stalwart of important holiday shopping days, may even be surpassed in importance by Cyber Monday, according to a recent Deloitte survey.
Still, for those who prefer an in-store experience this year (our study reveals a sizable 39.53% who do), they are hoping for safe, contactless purchasing. Only 23% will rely on cash, while a combined 77% will rely on credit cards, digital wallets, and mobile payment apps. Furthermore, 48% would be more willing to shop in-store at retailers who offer contactless pay options. While there's no way of predicting if (or when) cash will ultimately become obsolete, contactless pay options seem to be an intensifying aspect of the new face of retail CX and should be treated as such.
The new standard of retail CX
At the start of 2021, retailers will, as always, begin their holiday preparations. The state of holiday shopping is still unpredictable. The importance of preparing for either eventuality cannot be overstated.
No longer can retailers prioritize an in-store shopping experience, nor can they discount the vast number who will never give up brick and mortar. What COVID-19 has revealed to retailers is that consumers want a consistent shopping experience, no matter their preference.
By offering flexible ways to shop, buy, and take home —reinforced by consistency at every turn — retailers will exceed their customers' expectations, wherever they end up shopping.
Carlos Zapatero is a business development executive at SYKES.
About Carlos Zapatero
