Socially-distanced consumers drive unprecedented commerce growth

By | 3 minute read | June 18, 2020

While we have all adjusted to ways of living and working that may be forever changed, we have seen those changes reflected in consumer buying behavior. Consumers flocked to ecommerce at an unprecedented rate these past several months.

As people shifted consumption away from luxuries like restaurants and unrestricted travel to home necessities, they turned to retailers. Even as various regions re-open or loosen restrictions, people continue looking to online shopping as the safest path to stock up on necessities and order items they previously may not have considered buying online.

Retailers and brands have experienced record levels of ecommerce volume. Subsequently, this has created a unique opportunity to capture growth for those consumer packaged goods brands and retailers of all kinds who are equipped to scale quickly. For many, this may end up as nothing but channel shifting–simply moving sales from in store to online—and retailers with poor digital experiences will lose not only top line sales, but category share. And fast.

Click and collect is changing the game for retailers

The reality is that this COVID-driven uptick in ecommerce exposed both challenges and shortcomings for retailers. As orders ramp up, every aspect of the online experience falls under the pressure to deliver a perfect experience. Orders need to be received, products picked from the shelves by employees, staged for pickup, and pickup windows made readily available for consumers to drive up and load their trunk.

Retailers face complex strategic questions when looking at supply chains, physical store layouts, and ways to transform legacy organizational structure. We’ve now entered into a world where consumers are now telling companies that far beyond the items people previously ordered online, they now prefer the convenience and safety of ordering online and picking up even the most mundane of items. Oh, and can that be Thursday at exactly 5pm?

Are brand trade dollars working as hard as they should?

What about brands in all of this? You already have your Joint Business Plans for 2020 in place. All that planning for endcaps and in-store promotion in the aisles is irrelevant to buyers who are visiting your stores less, or not at all. If aisles are virtual, what are brands doing to capture attention online?

Every brand seeks strong loyalty from their consumers. There is a natural stickiness to online essentials that has raised the bar for strong CPG brand ecommerce strategy. A person is less likely to conduct a generic product search a second time, when the opportunity to “add to cart again” is prominently suggested. There is urgency here; capturing that coveted first category purchase for a consumer is critical for brands to capture share online. Promotion and awareness are a completely different game for CPG brands online, and brands not prepared for this channel shift are quickly losing share.

Data, data, data

Alas, amidst all these challenges for retailers and brands, there is an elixir that can help ensure strategy is on point and that a truly differentiated and personalized consumer experience is all but guaranteed. DATA.

Data has always been important, and most companies will say they have tons of it. But most also say they are challenged to effectively take action with the data they have. Those who have the existing infrastructure and data maturity within their organizations have been able to take this new influx of purchase behaviors, category insights, and industry trends in stride. Those leaders will, again, capture more than their fair share of the growing ecommerce business.

Consumers are demonstrating preferences with every digital order and the opportunity for personalization is everywhere. Those that capture and action these data points to deliver a personalized, customized consumer experience will be rewarded with retailer and brand loyalty that is priceless.

What’s next?

Ben Franklin once said, “If you fail to plan, you are planning to fail.” At this moment in time, you need to feel confident that you have the right ecommerce strategy, the right infrastructure, the right consumer experience, and the right team to execute. The experiences of this pandemic may have permanent impact on the shopping behaviors of your customers, and you need to plan accordingly.

At the end of the day, this doesn’t necessarily mean shifting all of your declining in-store business to ecommerce. The ultimate goal should be capturing more than your fair share of the portion of your business that is growing the fastest. For the foreseeable future however, in many CPG and retail businesses, optimizing your ecommerce strategy is likely to be a top priority.

Learn more about IBM iX commerce and experience strategy

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