Jul 31 2020

Digital Transformation in Retail Surges with the Pandemic

Online shopping experiences matter more than ever because of COVID-19, and with help from the cloud, major retailers are quickly learning to adapt across channels.

Before the COVID-19 pandemic, retail was already seeing dynamic changes when it came to the many waves of digital transformation.

But those changes came about relatively slowly. One pandemic later, sudden market shifts are forcing what might have been a gradual transition toward a more digital business into an immediate one.

And with buyers spooked by the potential of a lasting recession, retail could see declines in consumer spending.

But hope springs eternal, according to a session on retail priorities at Google Cloud Next ’20: OnAir. In a recent survey, Google found that that more than 50 percent of consumers were trying new shopping services for the first time; more than 25 percent were buying things online they normally would buy in-store; and more than half showed interest in curbside pickup.

“With routines impacted, consumers’ old habit loops have been broken, and they may have been forming new ones right now,” said Carrie Tharp, Google’s vice president of retail and consumer. “The novelty of virtual happy hours may wear off, but perhaps all that digital grocery shopping will stay.”

Tharp explained that consumers were making shifts over such a long period of time that they would likely become permanent — and, because of the increased shift to digital, e-commerce is now driving the overall journey.

“The store isn’t dead and will always have a huge role,” Tharp said, “but do your stores become a digital extension, and is your store and e-comm supply chain agile enough for future uncertainty?”

Omnichannel Experiences Can Help Retailers in the Crisis

One key element of the pandemic for retailers is the need to serve customers in multiple ways, whether through online commerce, curbside pickup, or even a drastically shifted retail experience.

While not every company will see the same level of success, those with the best odds have been strategically building their digital environment with an omnivorous consumer journey in mind.

The big-box home improvement retailer Lowe’s offers an example of what that could look like.

Neelima Sharma, Lowe’s senior vice president of technology, e-commerce, marketing, and merchandising, said that the hardware giant has focused closely on serving customers in whatever way they choose to work with the retailer. She noted the work that the company had done to encourage a cloud-driven omnichannel retail experience came in handy for the COVID-19 uptick — a big shift for a company that hadn’t made technology a priority in the past, she said.

“You know, the fundamental improvements that we’ve made over the last 18 months or so on our technology foundations have allowed us to create new capabilities and meet our customer needs, both online and also in stores,” Sharma said.

The spikes the retailer saw in March, when consumers were focused on acquiring essential goods amid shelter-in-place orders, exceeded the demand it traditionally sees on Black Friday, she said, and the company saw triple-digit growth in sales during the months of April and May.

But the secret to Lowe’s success may be rooted in its decision to invest in technologies such as cloud computing and data personalization in the years immediately before the pandemic, when it sharpened its focus on the consumer journey, aware that people setting out on big home-improvement projects often don’t make a purchase decision using a single platform.

“Our focus is on making sure their journey is seamless, no matter where they are at any point in time,” she said.

A cloud infrastructure that helps bridge the gap for data-rich consumer experiences was long a goal for major retailers. But while many retailers will feel the effects of the COVID-19 crisis differently, those that have prioritized an omnichannel retail experience will face better odds surviving an increasingly uncertain world.

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