Let’s start with a contender for understatement of the century: COVID-19 has disrupted the retail industry this year. Since the pandemic began, seismic shockwaves have been felt across the sector, with businesses forced to react to an unpredictable and unprecedented situation whilst taking into account ever-changing customer behaviors. The last few months have transformed the sector as we know it, with 2020 causing the biggest retail shake-up in recent memory.
The really interesting part is that this isn’t a temporary disruption: these coronavirus retail trends are here to stay.
Last month, leading retail technology website Retail Technology Innovation Hub (RTIH) collated some great research to explain consumer attitudes towards some of the most common trends to emerge from COVID-19. Here, we take a closer look at some of the ways artificial intelligence (AI) can help retail businesses turn disruption into opportunity, and react to these new trends in the most effective way…
Younger Brits have driven a convenience store revival, citing that they have everything they need and will continue to utilize more local stores moving forward.
RTIH’s research shows us that younger shoppers in the UK – particularly those between 18-34 – are now opting to shop locally more often than in the past. 56% opted to use their local convenience store for the first time since lockdown, for a variety of purposes, including “everyday food and drink purchases to parcel pick-ups and drop-offs, utility bill top-ups, cash withdrawals and much more.”
As this continues, agility (or a lack of) in stock and inventory positioning for a retailer will create clear winners and losers. AI offers businesses the opportunity to execute and optimize an efficient inventory strategy, ensuring that their store becomes synonymous with having the right products in stock to keep customers happy. Take a look at our Demand AI solution for more on this.
Use AI to win with the metrics that matter: increase return on working capital, optimize the stock holding of a business, drive a better brand experience for the consumer.
Spending on subscription services increased by nearly 40% year-on-year at the height of lockdown.
Pret a Manger recently became the latest brand to introduce a new subscription service, offering customers unlimited coffee for £20 a month, in a bid to drive loyalty at a time when a high percentage of its usual clientele are still working from home.
This is where an AI-powered view of customer data, enabling you to serve the right customer with the right message at the right time, is key. You can identify those who are more likely to subscribe and look after them with tailored offers and personalized comms. Check out our Customer AI solution to explore this in more depth.
Use AI to win with the metrics that matter: drive new customer acquisition, increase purchase frequency and average order values.
Grocery shopping goes digital
77% of people now do at least some of their grocery shopping online, compared to 61% a year ago.
As more shoppers turn towards online grocery shopping, the leading supermarket chains have been placed under increasing pressure to fulfill demand. The big players are, naturally, hoovering up the majority of this new online demand, and although this means bigger revenue it also means bigger costs. AI presents these businesses with a significant opportunity to optimize their digital channels and supply options. Both Customer AI and Demand AI are relevant for this point, too.
Use AI to win with the metrics that matter: increase EBITDA by optimizing channel mix, efficiently power new customer acquisition, turn one-time users into repeat online customers, optimize stock allocation by channel and increase average basket values.
Stores as hubs for online fulfillment
There’s been an acceleration of retailers using stores differently and meeting the omnichannel customer where they want to be met.
This will become the end game for all physical retail, at some point in the future. Next is a great example of this, with its annual reports reaffirming its commitment to keeping “loss making stores” open to help support delivery-to-store and ship-from-store processes.
This aspect of retail is perfectly primed for AI optimization. Imagine having an intelligent AI function plugged into your ERP system pushing your inventory around your store estate, ensuring no customer is ever disappointed. An agile stock inventory, a smarter view of your customer data and more accurate forecasts make this possible, ensuring you know what your customers will do next before asking them. If this is of interest, then Demand AI is the Peak solution for you.
Use AI to win with the metrics that matter: increase return on capital employed (ROCE), drive higher top-line revenue as a result of more sales opportunities, drive economies of scale across the entire supply chain.
The retail sector is at a crucial juncture at the moment, and those businesses who take the right action and follow the right approach now will be the ones who go on to succeed in the future. If you’re looking to find out more about using AI to optimize your decision making, or want to discuss any of the above coronavirus retail trends in more detail, we’d love to hear from you.