Covid and the digitalisation of retail
While 2020 may go down in infamy as the most challenging year in retail history, a new survey by Validify reflects an industry that is ready to double down on digital transformation and tough it out for a brighter tomorrow
Everyone recognises that the COVID-19 pandemic is the kind of tumultuous event that makes its place felt in every corner of the globe and every facet of life.
While almost every industry has been affected to one degree or another there’s really been no hiding place for the retail industry.
At Validify we speak to decision makers at leading retailers and brands every day and at the height of the pandemic we were encouraged to hear how many of them were able to adapt quickly and use the crisis as a catalyst for change.
While it may seem strange or even misplaced to put a positive spin on such a torrid time for much of retail, there is no question that the sector has already seen a new impetus born out of necessity to reach digital transformation goals.
In the words of John Lewis Partnership chairman Sharon White: “The pandemic has brought forward changes in consumer shopping habits - what might have taken five years has happened in five months.”
Validify undertook a survey of its retail community to better understand the effects of COVID-19 on the digital agenda and what has been revealed is a picture of renewed vigour for digital transformation and a willingness to search out innovative new solutions to reach new goals.
A significant 57% of respondents said they were ramping up digital transformation efforts as a result of the pandemic while only 11% said they were applying the brakes.
Equally, investment in digital transformation is holding firm or being ramped up with almost half (46%) saying that their budget has been increased due to the pandemic while the same percentage said they were maintaining investment levels.
Nick Stragnell, global head of ecommerce, Neal’s Yard Remedies said: “The pandemic has accelerated the business need to think 'digital first', something digital and ecommerce teams have been championing for years.”
2020 had already been predicted as an important year in the digitisation of global retail, with artificial intelligence, augmented reality and personalisation at the fore, but some estimates have pegged COVID-19 as bringing forward digital transformation progress by 5 years at least.
Another important takeaway from the survey that caught our eye is an increased desire to seek out new and innovative companies to supply the tools for the new post-COVID era.
One innovative company leading the charge in personalisation is Ometria. Djalal Lougouev, cofounder and CSO explained:“The pandemic has accelerated digital transformation by years, ultimately improving the customer experience which covers product discovery, selection, purchasing and delivery. Traditional batch and blast tactics have been deprioritised and replaced with creative content strategies, editorial advertising and focus on topics that portray the brand beyond their product offerings.”
In our survey, 42% of respondents said they were more likely to work with new innovations and start-ups following the pandemic with 0% saying they'd be less likely to turn to new innovators. It’s very positive to see that businesses are not just taking the easy option of engaging established providers but searching out the new generation of innovators out there.
Lougouev adds: “Retail will never be the same, but the foundations that will be implemented in the next two years will have a dramatic impact on how consumers interact with their brands. This will encourage investment into new disruptive technologies and channels - accelerating development of AI, VR, AR, drone tech, infrastructure, logistical automation and many other areas that will benefit the economy. This will impact accessibility and add additional coverage for areas that are typically removed from technological innovation.”
In additional good news for the high street, of the 60% of respondents who operate retail stores only 38% said they anticipated closing stores in the next 12 months – a rosier picture than many would currently have you believe.
Clearly, this has been and continues to be an intensely challenging period for the retail industry but the results of our survey demonstrate an industry that is not willing to simply down tools and accept their fate. Indeed, our findings reflect an industry where retailers and brands are sticking to their plans on sustainability, avoiding knee-jerk closures and doubling down on their digital agenda.
You can download the full report here.