Retailers must change mindset in wake of COVID-19

While the retail winners of 2020 have enjoyed a phenomenal rise in online sales, they should not get too smug about it, according to Russell Loarridge, director at ReachFive.

Loarridge says consumers moved online because they had no choice.

"And while sales are up and COVID-19 will continue to play havoc with confidence in visiting the high street, consumers are not flocking online because it is an enjoyable experience. It isn't," he says.

"At its best, online retail is a slick, efficient transaction. Retailers are focused on delivering ease of checkout and speed of delivery.  But an easy checkout is not memorable.

"A retailer offering multiple delivery options is not going to capture a consumer's attention. These are prerequisite table stakes, nothing more. It is the quality of the shopping experience – the way a good store associate interacts with customers - that people remember and brings them back again and again. And retailers need to start thinking about that experience online."

Loarridge says retailers must not be complacent.

"Consumers have been forced to shift their buying online and while some of this new behaviour could stick, will people continue to shop if online retail remains a purely transactional activity? It is time for retailers to bring back the joy and that means rethinking the online customer experience," he says.

Due to the ongoing COVID-19 crisis, consumers have been forced to adopt online shopping en-mass during 2020 – and Loarridge says there is no doubt that many have appreciated the convenience.

"But they are also noticing the lack of joy offered by online shopping," he notes.

"People are pining for the high street – and not just the chance to touch and feel products. They are missing that warm feeling associated with a good shopping experience. It is frustrating online to click through tab after tab to find the blue cashmere jumpers," Loarridge says.

"Even more frustrating to then be presented with 'people who liked blue jumpers also like skateboards' – or some equally irrelevant, impersonal suggestion."

In contrast, the store experience is tailored to the customer.

"You can head straight to the enticing display of jumpers as soon as you walk in. A good store associate will not only find the right size but also suggest a matching scarf," Loarridge explains.

Online shopping works – in the main – but it is not fun. And retailers need to remember that shopping is not just about convenience; for many, many consumers shopping is a leisure pursuit.

"Online is set to remain a habit until consumer confidence returns," says Loarridge.

"But unless retailers start to reconsider how they interact with their customers, there is a risk that shopping will become nothing more than a necessary evil, a functional transaction to acquire goods," he says.

Loarridge says it is essential to change the mindset because "somewhere along the way retailers have lost sight of their online customers".

Stop Guessing, Just Ask

Loarridge asks how has the gap between online and physical retail become so wide.

"In store, an experienced manager will greet customers as they walk in with a smile and a 'Can I help you?'. Nothing more – no requests for email addresses or phone numbers," he says.

"No demands to sign up for offers or newsletters. They can see at a glance a customer's gender and age bracket. Shopping bags give a clue to previous purchases; while clothes suggest style preferences and if a customer asks for help will direct them straight to the most relevant items."

Online retail in contrast is all about capturing data – but none of the data that provides any of that insight into the customer's interests or preferences.

"Retailers are spending a fortune on measuring every step of the customer's online journey and analysing in extraordinary detail in a bid to guess what they might want next," says Loarridge.

"Retailers are badgering online customers for email addresses and postal addresses – hoping to draw conclusions about wealth and buying habits from complex analytics," he explains.

"Why? How is this information being used to improve the customer experience? It isn't.

"It is rarely accurate and, with the exception of Amazon's multi-million pound investment in its own recommendation engine, often disturbingly irrelevant. Why not just ask?"

Loarridge says customers want a personalised experience.

"So why not ask their gender and age bracket and then immediately take them direct to the relevant area of the site? Following both GDPR and best practice guidelines, retailers need to explain why they want this information and how it will be used," he says.

"But why wouldn't a customer confirm their gender if it saves a few clicks? Or set up a profile that includes favourite colours or preference for cufflink shirts rather than buttoned, if it means they quickly get to see the products they are interested in?"

Loarridge says no one enjoys clicking on product after irrelevant product in a bid to find the right one.

"A retailer capturing online the same information about a customer that a switched on store associate can either see at a glance or discover during the interaction can totally change that online experience," he says.

"This is not about sending one of those super annoying emails that says: 'we saw you were looking at skirts, why not come back and take another look?'"

Loarridge says it is about creating a truly relevant, personalised experience – one that could be even better than in store.

"Right now, few physical retail operations are set up to proactively contact customers when new products come in that they may like," he says.

"But that is simple online. If a retailer has asked the customer for their preferences, the email will say: 'Our new range has a green silk shirt we think you will love.' Top value customers could even have their preferred size put aside virtually for a couple of days before the new range is made available to the entire customer base.

"That is a good quality retail experience."

COVID-19 triggered a fundamental change in shopping behaviour and for the time being this online-first mentality looks set to remain.

According to Loarridge, the pandemic has also highlighted the stark difference between the online and physical shopping experience.

"The impersonal online experience is never going to inspire customer loyalty. Even worse, it has removed the joy from shopping, moving retail from a leisure pursuit that allows retailers to entice customers with up- and cross-sales to a dull, functional, even duty activity. And that will not sustain retail in the long term," he says.

"The technology exists to move online retail closer to the high street experience. Customer identity and access management; content platforms; recommendation engines. The technology is not the barrier. The barrier is retail mindset.

"And while retailers remain focused on improving the quality of the online transaction – the checkout and the delivery – customers will continue to be disappointed.