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Weathering Uncertainty: How Retailers Can Connect With Digital-Only Customers
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Commerce

Q1 Shopping Index: As Retailers Open Doors, Is Contactless Commerce Here to Stay?

Brands and retailers offering buy online pick up in-store (BOPIS) achieved some of the greatest revenue gains amidst the COVID-19 pandemic. See the data.

This is the final post in a four-part weekly series, a deep dive into our quarterly Shopping Index to tell the story of shopping through more than one billion shoppers across the globe.

Brands and retailers offering buy online pick up in-store (BOPIS) achieved some of the greatest revenue gains amidst the COVID-19 pandemic. According to data from the Salesforce Shopping Index, in Q1, sites with BOPIS grew their digital revenue by 27%, compared with 13% for sites not offering BOPIS. As the pandemic took hold in the U.S., between March 10 and March 20, daily digital revenue spend for sites offering BOPIS — via curbside, car, drive through, or store pickup — grew by 92% compared to 19% for sites not offering it over the same period. The message from consumers is clear — they favor retailers and brands that prioritize ways to safely and quickly get the products they want and need.

So what does this mean for the future of physical commerce? As states like Georgia, Texas, and South Carolina begin to reopen non-essential businesses, residents are on the front lines defining what getting reopening the workplace — and life — looks like for the rest of the country. Occupancy caps, social distancing, and contact tracing are just some of the tactics areas across the country are employing to facilitate our return to normal. But will consumers return? The International Council of Shopping Centers reports that 77% of consumers feel comfortable going back into stores.

That brings us to the million-dollar question. How do brands and retailers reopen the workplace, most notably physical stores, and maintain their customers’ and employees’ confidence? One retail executive recently stated, “… digital used to be an outpost of the physical store, and now the store is a component of digital.” Given the massive acceleration of digital as the glue to unified commerce, the following provides two key strategies that will be critical to safely opening, while providing a seamless and convenient shopping experience.

Strategy #1: Double down on digital

Unified commerce

Unified commerce, coined by the National Retail Federation and Ecommerce Europe five years ago, is a strategy that’s been embraced by many retailers and brands. An integrated and seamless experience is undoubtedly the holy grail of commerce. In today’s world, this is now more important than ever. With more consumers turning to digital channels to complete both essential and nonessential purchases, creating a consistent experience across all of their touchpoints will be crucial to keeping your shoppers and employees safe and engaged.

What does unified commerce look like in the age of a pandemic? BOPIS (also known as Click and Collect) has become a critical exercise in getting consumers the products they need while keeping them out of brick-and-mortar stores. This trend accelerated during the 2019 holiday shopping season as a convenient offering for last-minute gift-givers. Brands and retailers offering BOPIS saw 56% more active shoppers in the last five days leading up to Christmas compared to those with stores not offering the perk. And the benefits didn’t end there, sites offering BOPIS captured 18% more revenue after the retail ground shipping cutoff. But now, BOPIS is an essential part of doing business (for restaurants, it may be the only way) — and brands who get up and running with BOPIS quickly will have a considerable advantage. Here are some considerations to prep your business for BOPIS:

  1. Reveal inventory visibility on your website
  2. Utilize employees for pick-and-pack functions
  3. Offer various pick-up options at online checkout
  4. Use apps and geofencing to facilitate faster pickup times

Back to basics

This pause in our normal lives offers us a unique opportunity to get back to basics. Refocus your attention on aspects of your website that need some attention. Here are three low hanging fruit that can yield big returns:

  1. Streamline your checkout experience
  2. Improve personalization
  3. Enhance product information to reduce returns

Community

One major gap in the loss of brick and mortar foot traffic is the lack of experiences. With in-store experiences closed for the foreseeable future, companies are doubling down on their social media content. Viral videos, cooking and workout classes, and how-to tutorials are a few of the ways that customer engagement is being reimagined. Social media is the shopping mall of the new decade. And as social media traffic increases at exponential rates, this will be your most important tool for maintaining and building new relationships.

Strategy #2: Contactless engagement

Stores as fulfillment centers

With fewer shoppers heading inside the store and more turning to digital channels, brick and mortar brands and retailers need to reimagine how they use their storefronts. One of the biggest advantages of the physical store is fulfillment. Digitally native brands and retailers are seeing unprecedented demand on their logistic channels. Even Amazon is extending shipping windows for nonessential goods. BOPIS gives organizations with physical locations a unique advantage to quickly and efficiently serve local customers.

We predict some of these stores may never open back up to foot traffic, and instead convert to dark stores. Others will double down on virtual or even personal shopping appointments to reduce foot traffic. Going forward, it will be critical to properly train your store staff to fulfill orders, manage inventory, and assist customers remotely.

One retailer that pivoted to BOPIS almost overnight was Michaels. Michaels aimed to “be responsive to our Makers needs in as ‘real-time as possible.’ New service programs such as curbside pickup (four days from test to national launch) and same-day delivery (about two weeks development time) would have taken three to four-plus months pre-COVID-19,” a spokesperson says.

Contactless payment

Mobile wallet solutions, like Apple Pay and PayPal, are the easiest way to flatten the checkout funnel. Online orders using a mobile wallet grew by 39% in Q1, representing 26% of all digital orders. But mobile wallets are not only critical as an option for your online checkout. Contactless payment in the store is going to be crucial to maintain social distancing measures and manage customer expectations. In fact, according to an American Express study, 58% of consumers report they are more likely to use contactless payments now than ever before. Updating your POS systems to accept payments via phones, wearable technology, and tap-and-go card payments will be essential.

Distribution methods

We’ve all heard of food trucks, but have you experienced a shopping truck yet? Imagine a world where your favorite brands and retailers hold shopping pop-ups in your neighborhood. Three months ago that would have seemed far-fetched. But this is our reality today. This is just one of the many creative ways brands and retailers are reimagining product distribution. As retailers like Michaels pivot to curbside pickup overnight, others experiment with new versions of last-mile delivery services. Uber, Grubhub, and Lyft have all pivoted their business models to last-mile delivery services. Don’t expect these trends to go away. As consumers get used to placing their Walgreens order via Grubhub or waiting in their car to pick up their online orders, it will be critical to reimagine how to safely and efficiently fulfill customer orders.

teddy bear mobile

Today’s frontier

Change will be an ongoing exercise, just like the pivot to digital commerce. There are so many considerations your business will need to weigh about how to operate in our new reality. Here are three additional considerations every brand and retailer should think about.

Contactless returns

Facilitating contactless order fulfillment is something we are all getting used to. But what happens when a customer needs to return a purchase? In the age of COVID-19, this is a daunting task. The health and safety of your employees and customers are at the top of your mind, so accepting an item that could potentially be contaminated is a challenge. Luckily, contactless returns were popping up before the pandemic. Last year, Nordstrom implemented kiosk returns. Shoppers simply scan a QR code and return their items via a kiosk.

retail self-service area

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Shopper education

Amidst all these changes it’s easy to forget that for some consumers the switch to digital is a brand new world. While BOPIS and Apple Pay may seem like second nature to Millennial and Gen Zers, older shoppers are using these technologies for the first time. Don’t leave any of your shoppers behind. Empathy and compassion for those who are struggling with adoption are critical to ensure a smooth transition. The key to this is education. Walmart is leading the way with a comprehensive set of tools and videos that walk shoppers through these new technologies. Train your store associates to guide shoppers who may be struggling with any of this technology either in-store or over the phone.

Rethinking the store associate role

Speaking of store associates, these workers have kept our families safe while putting themselves in danger throughout the COVID-19 pandemic. Despite less foot traffic, their roles are more important than ever. Focus on retraining your associates to become fulfillment and service heroes. The National Retail Federation is taking some of the guesswork out of reopening plans. See their checklist for some great ideas. For more inspiration, check out how Chick-Fil-A has aligned itself with its customers’ and employees’ values to deliver a stellar customer experience.

Takeaway

We predict this crisis will continue to accelerate changes in consumer behavior that were already happening. Use this opportunity to innovate and reinvent how you engage with your consumers. And when you’re ready to open your stores back up, we’ve compiled a comprehensive playbook on how to do it safely and efficiently. Check out work.com for advice on topics ranging from managing contact tracing, workforce reskilling, and so much more.

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Q1 Shopping Index Methodology

The Q1 Shopping Index uncovers the true shopping story through analyzing the activity of more than one billion shoppers across more than 34 countries powered by Commerce Cloud, with a focus on key 10 markets: U.S., Canada, U.K., Germany, France, Spain, Japan, Netherlands, Australia/New Zealand, and the Nordics. This battery of benchmarks provides a deep look into the last nine quarters and the current state of digital commerce. Several factors are applied to extrapolate actuals for the broader retail industry and these results are not indicative of Salesforce performance.

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