Excellent customer service has always been the hallmark of well-established, highly respected retailers.
Nordstrom’s, Zappos and Trader Joe’s are a few of the best examples of retailers that make concerted efforts to make and keep customers happy.
Before 2020, many retailers were happy to let those top-rated companies be the standard bearers for superior customer experience.
Meanwhile, many retailers continued servicing customers with no real CX roadmap.
It appeared to the uninformed that the return on investing in the customer service wasn’t worth the time and money spent.
And, the truth was, mediocre customer service was tolerated – until COVID came and retailers were forced to answer a deluge of customer questions and provide new services without much preparation.
In 2020, customer service became the only thing that mattered to customers.
COVID led to an expanded definition of customer service
Shopping last year meant dealing with lockdowns caused by COVID-19.
The global pandemic made getting to stores difficult, so, at first, many if not most customers were ordering online.
And while those retailers may have believed they dodged the CX bullet, they were in for a surprise.
Retailers learned the customer service is not simply to answer questions about shipping and billing, but it is also to offer information and help for those struggling with the Coronavirus.
Customers may be desperately searching for products or information on payment options because can’t pay a bill, or are otherwise frustrated by the pandemic hindrances to getting products they need are reaching out via texts, online chat and phone calls.
This year, Forrester predicts customers will continue to look toward retailers for sympathetic customer support.
Forrester Principal Analyst Ian Jacobs recently wrote, “With U.S. unemployment peaking in April, millions of individuals found themselves struggling to pay for food, bills, and other necessities. Organizations must react to provide high-quality, emotionally sensitive customer support in the flexible ways that consumers need.”
In a word, it must be frictionless. For example, a capable site search tool can be invaluable for customers.
Likewise, chat bots are particularly helpful for providing succinct answers quickly; in addition, bots with the power of artificial intelligence bots can reflect whatever personality a brand wants to project.
Adding relevant services based on discerned customer needs
Another way to differentiate customer service is to launch a virtual service based on fulfilling a defined need.
Online pet supply provider Chewy, for example, has seen a huge surge in business during the coronavirus pandemic.
But its newest offering, a telehealth service for pets, was launched in response to customers telling service agents about their pet’s problems – while they are ordering food, treats, toys, etc.
The virtual service was on the roadmap for years down the road, but the company saw the need was for now, and launched in October.
Which services will carry on beyond COVID?
This year, consumers will let retailers know which innovations will “stick,” and become part of their future shopping expectations.
Top of mind are questions such as: Will the evolution of click and collect to curbside delivery remain a shopping option? Will jewelers continue to offer virtual consultations? How will retailers be able to support the expansion of the sales channel without spreading their staffs too thin?
Those and many others will be answered by 2021 shopping patterns. And perhaps some new “kings of customer service” will be crowned.
During the past year, brick and mortar retailers have struggled with encouraging people to visit their stores while keeping them as safe from COVID-19 as possible.
In addition to limiting the number of shoppers inside and enforcing mask-wearing mandates, contactless payments and augmented reality have suddenly seen significant growth as aids to shoppers’ experience in stores.
According to the “Visa Back to Business Study – 2021 Outlook,” 56% of consumers have used contactless payments whenever possible in the past three months, making it the biggest shift in terms of shopping habits during the pandemic.
This past June, only 20% of SMBs had offered contactless payments; a few short months later, 39% have started to accept new digital forms of payments.
And a vast majority — 74% — expect consumers to prefer contactless payments once a vaccine is widely available.
In fact, the study found that 65% of consumers said that post-vaccine they are likely to continue to use contactless payments at least as much as they are currently.
Those numbers skew by generation: Millennials are the most likely to embrace contactless payments.
However, all age demographics seem to have a level of interest in contactless payments, perhaps due to the sanitary nature of the system.
Because of its wide acceptance—61% of Boomers have expressed a preference for contactless, according to Visa—it is likely here to stay.
With consumers preferring to avoid contact even briefly during the payment process, it’s no surprise that dressing rooms are standing empty or even locked.
However, shoppers who try on clothing are much more likely to buy, so some retailers have replaced their shuttered fitting rooms with virtual ones.
In-store, shoppers can stand in front of a camera and see themselves on a large screen. They then select different products for their virtual self to model, allowing themselves to see exactly how they’d look in the selected outfit without having to try on a single piece.
Those mirrors could one day be linked to social media, which will provide an enriched interactive experience.
For retailers with an online presence, adding a dressing room widget to their websites allows customers to upload a single photo to instantly see themselves in selected clothing.
Using augmented reality to facilitate virtual try-ons also helps retailers reduce return rates.
As they head into 2021, retailers will be further developing those types of technology solutions, which helped get them through the pandemic.
Strategies that include contactless payments and AR will find expanded uses as the economy reopens in the second half of the year.
The COVID-19 pandemic has motivated retailers to turn to technology to help their businesses plan better, increase productivity, and service their customers.
Contactless payments are one of the areas that, because of COVID-19, will change forever the way retailers do business.
Safer and faster checkout
These RFID-enabled payments have been available for years but have surged in popularity during the pandemic.
Not only is contactless more hygienic – in the time of COVID-19, no one wants to touch cash that’s been touched by hundreds of strangers – but it also streamlines the entire checkout process.
While the pandemic may have provided a strong push toward a cashless society, customers could still choose to use a traditional payment card, rather than NFC technology, and be safer from virus exposure during the transaction because they are operating the card reader rather than handling cash.
However, because they use radio-frequency identification, contactless payments reduce time waiting in lines.
The “tap-and-go” process generally results in speedier transactions. While the transaction time for a chip-enabled card can take as long as 30 to 45 seconds, a contactless transaction can be as short as 10 to 15 seconds.
Global adoption of contactless payments
Contactless transactions build upon RFID and typically use NFC technology, the foundation for services such as Apple Pay and Google Pay.
Globally, this method of payment is very popular.
The United States, however, has been slow to adopt contactless payments.
OEM mobile wallet transactions were predicted to increase as banks expanded the use of contactless cards.
In the U.S. market, contactless transaction values were expected to rise at an even higher rate than the global market, reaching $1.5 trillion by 2024, compared with the approximated $178 billion in 2020.
Once COVID-19 hit, contactless payments began to surge.
By August 2020, the global contactless payment market was valued at $ 1.05 trillion by 2019 transaction value, and is now predicted to register a compound annual growth rate (CAGR) of roughly 20.01% between 2020 and 2027.
Today, the global contactless payment market value is expected to surpass $ 4.60 trillion by 2027.
Customers have enough friction getting out to the store today. By offering contactless payments, retailers can provide an efficient, safe method for purchasing goods and services while enhancing the customer’s overall experience.
5G networks have rolled out in only a handful of U.S. cities, but that momentum is growing.
Recent research from Barclays Corporate Banking suggests that 5G could supercharge the UK economy by up to £15.7 billion per year by 2025.
The technology is 20 times faster than 4G and will connect not just people, but interconnect and control machines, objects, and devices as well.
That speed, coupled with virtually no latency, means the new networks will nearly eliminate lag time.
1. Improving communications along the supply chain
For supply chain management, 5G provides greater connectivity and reliability, which will lead to improved communications between brands, transportation, and consumers.
While the technology will transform warehouse management through the use of the internet of things, artificial intelligence, and robots, it will also improve the in-store customer experience.
Providing 5G connectivity in physical stores means Internet of Things (IoT) devices can easily communicate on a fast, reliable network that doesn’t require too much power.
Because of their low power consumption, 5G networks can provide up to 10 years of battery life for low-power IoT devices.
2. Optimizing inventory visibility and management
Technology such as smart shelving, which uses many sensors to provide real-time inventory visibility and pricing updates, as well as dynamic pricing, automated checkouts, connected fitting rooms, and automatic replenishment will benefit from 5G networks.
In addition, the boost in speed will power retail analytics, inventory visibility, demand forecasting, and endless aisle technologies.
The faster network will enable more accurate real-time data to flow, ultimately facilitating smarter, more robust systems.
More operational and inventory decisions will be handled by automation.
Inventory, for example, will be tracked more quickly and accurately, which will improve forecasting quantities.
Sales associates won’t have to do manual inventory counts and can spend more time interacting with customers.
Having the right amount of stock on hand increases customer satisfaction, because — thanks to accurate inventory counts — products will be available on demand.
3. Boosting digital connectivity
5G promises to facilitate a whole new world of digital connectivity.
Mobile shoppers will benefit as the paths to purchase in even the busiest of stores will be smooth.
5G also offers low power consumption (a 90% reduction in network energy usage from 4G) and high reliability, which makes it well suited for the retail space.
For example, in China, the Shanghai Lujiazui L+ Mall uses the 5G digital indoor system, network connectivity across 12 floors and more than 140,000 sq. meters of floor area.
5G enables the connection of more devices than 4G and improves the responsiveness of wireless technologies.
Because of its ability to improve backend processes through its support of IoT devices, as well as the overall customer experience, 5G technology will rock retail’s world.
Thinking out of the box and providing new ways for customers to connect with retail has long been critical for businesses to maintain loyal shoppers as well as to attract new prospects.
Sometimes, circumstances such as COVID-19’s mandated social distancing are the impetus for lasting changes.
Many retailers have had some omnichannel presence, but others have had little or even no experience; both groups have had to innovate and create new ways to connect with customers during COVID-19, many of whom wanted to shop but were reluctant to mingle with the public at large.
As a result, retailers’ new strategies are catering to those unique, and challenging, requests.
Curbside pickup is one convenience strategy that has been refined in recent weeks and is likely to remain long after shoppers’ fears about going into stores have subsided.
Curbside: the final BOPIS frontier
Prior to March, many large retailers offered the ability to buy online, pickup in store (BOPIS).
The strategy lets customers shop round the clock, and then during business hours take delivery of the products at the retailer.
It may save the customer some time, but it’s more likely simply enabling a “time shift”: Instead of shopping for two hours between 10 and 8, BOPIS customers might shop for an hour online at midnight, and then stop on the way home from work to retrieve the items.
However, “stopping off” used to mean find a parking spot, enter the store, find the pickup location and finish the transaction.
All those steps ate up precious time.
Simplifying curbside pickup with Retail Pro POS
Integrating curbside pickup into the process has made BOPIS much more efficient for the customer; the pre-ordered product is simply delivered to the customer waiting in the car.
That last step makes BOPIS far more convenient, and Retail Pro Prism mobile POS makes this step more convenient for your team.
With Retail Pro Prism you get the same deep functionality on any device you use – whether mobile or desktop, Apple, Android, or Windows – so your associates can meet your customer at their car with their order, POS in hand. This is useful for orders that were reserved online and still need to be rung up.
Customers who have been shopping with you online during COVID-19 may also bring returns with them when they come to pick up their order.
With Retail Pro Prism mobile POS, your sales associate can complete the return on the spot with the customer’s receipt. If the customer forgot their receipt, you can easily look up the transaction from the system or just look up the item in your inventory and enter it as a return transaction.
You can even sign your customer up for the integrated AppCard loyalty and rewards from the curbside.
Retail to go
The number of orders placed online and picked up at brick-and-mortar stores by customers rose 208% between April 1 and April 20 compared with a year ago, according to Adobe Analytics, which measures the web transactions of 80 of the top 100 U.S. internet retailers.
If retailers keep the curbside option once they fully reopen, it will provide yet another delivery channel to their most busy customers.
Texas governor Greg Abbott recently allowed nonessential retail stores to start offering curbside pickup, or, as he called it, “retail to go.”
Even before the economic shutdown, some pharmacies were offering curbside service, such as CVS.
However, the drugstore chain didn’t offer the service at all of its outlets, and it was relatively unique in offering it.
Pre-COVID, curbside pickup was nowhere near as popular as it has become.
Looking into the future, it seems logical customers will want to retain this new convenience.
Convenience is going to drive the economy in the coming months, and possibly years.
While born out of necessity, customers are going to consider a once-novel curbside service part of the “new normal” retail experience.
For the past several years, retailers have seen two types of customers.
The first are those who, after living through a number of recessions, have determined they must protect their money at all costs.
They are experts on value, seeking deals, discounts and saving; they are coupon clippers.
The second have also weathered a number of economic slumps, but they see life as short and because money can disappear in the blink of an eye, time is more valuable than frugality.
That group is focused on convenience, and the motivation behind their spending money is to save time.
Both groups are important to retailers, and many shoppers today have traits of both types of consumers: They want to spend thoughtfully, not frivolously, and they are focused on efficiency.
Retailers that can demonstrate value for products or services that make customer lives easier or more fulfilling will therefore attract more loyal customers.
Value: the “Right” price or the “lowest” price?
People always want a good value.
It’s not only those living on fixed incomes or those living on minimum wage but also professionals who are bargain hunters.
Off-price stores such as Nordstrom’s Rack and Saks Off Fifth boast customers from every economic strata—proof that savvy shopping does not discriminate.
However, the “right” price does not have to be the “lowest” price.
A strong value proposition that focuses on the benefits of the product or service may help nudge a cost-conscious customer to spring for the purchase now, rather than wait a few weeks or even months.
When value is coupled with the idea that a purchase could make one’s life easier, retailers have a winning strategy.
For example, buying a $400 robotic vacuum cleaner is less expensive than hiring a housekeeper, and also frees up time to spend time in a more pleasurable way.
In 2017, a study from the University of British Columbia not only found that people who bought time-saving products were happier, but that the findings were the same despite the respondent’s socioeconomic standing.
“The benefits of buying time aren’t just for wealthy people,” said UBC psychology professor and the study’s senior author Elizabeth Dunn, in a release about the research. “We thought the effects might only hold up for people with quite a bit of disposable income, but to our surprise, we found the same effects across the income spectrum.”
Outsourcing the work of getting products
Convenience really matters. Many people are looking for something that simplifies their busy lives while delivering a positive experience.
Their focus has turned from focusing on the act of purchasing products to the act of using them.
Retailers that understand how to curate the “just right” selection of products will have a competitive advantage. For those stores, enabling convenience is baked into their foundation.
Other retailers, however, might find offer convenience more difficult.
From experience to efficiency
Many shops have invested in providing an entire experience around the act of shopping.
If these stores’ customers no longer consider the store the destination in and of itself and prefer a more efficient shopping experience, they will have to reassess the way they do business.
Convenience must be woven into the fabric of the retailer to provide a cohesive, integrated shopping experience, rather than a tacked-on, haphazard one, or, worse, one that is viewed as not genuine. Most importantly, retailers should view convenience as constantly evolving: People’s tastes change rapidly and what may be considered convenient today may tomorrow seem as dated as ornament beards.
Finding Opportunities in Your Business Data
With Retail Pro Decisions
COVID-19 forced retailers worldwide to pivot fast to survive this unprecedented and wholly unexpected market downturn.
From shifting to ecommerce-only and fast fulfillment strategies, to staying connected with customers during lockdowns, your ability to adapt and take assertive action is crucial for your business to survive.
Now more than ever retailers must turn to their data to monitor KPIs and get insights that will help you combat the ongoing effects COVID-19 will have on consumer mindsets and economies.
Watch this webinar to see 7 insights you need to search out now from your data to help you shape your retail decisions post COVID-19 and position you to make the most of the shopping season remaining in 2020.
Watch this Retail Pro Decisions webinar to hear:
Smart ways retailers adapted to stay connected with customers and maintain retail operations
Why every retailer should re-evaluate the extent of data driving their strategy for customer engagement and inventory management
How to monitor every KPI with data from your POS, ERP, CRM, e-Commerce, and other critical applications integrated in Retail Pro Decisions visual analytics software
What insights you need to glean from your data now to shape your decisions as you reopen and reconnect with shoppers for the remainder of 2020
COVID-19 obligó a los detallistas de todo el mundo a reinventarse rápidamente para sobrevivir a esta desaceleración del mercado sin precedentes y totalmente inesperada.
Desde cambiar a estrategias de entrega a domicilio y de comercio electrónico, hasta mantenerse conectado con sus clientes durante los bloqueos, su capacidad de adaptarse y tomar decisiones asertivas es crucial para que su negocio sobreviva.
Ahora, más que nunca, los detallistas deben recurrir a sus datos para monitorear los principales indicadores de desempeño (KPIs) y obtener información que los ayudará a combatir los efectos continuos que COVID-19 tendrá en la mentalidad de los clientes y en la economía global.
Mira este seminario web para ver 7 ideas que necesita buscar ahora en sus datos para orientar sus decisiones de venta al detalle después de COVID-19 y posicionarlo para aprovechar al máximo la temporada de compras que queda en 2020.
Mira este seminario web de Retail Pro International y PA Latinoamericana para escuchar:
Formas inteligentes que los detallistas han desarrollado para mantenerse conectados con sus clientes y seguir tocando las operaciones
Por qué todo detallista debería reconsiderar la extensión y las fuentes de datos que orientan su estrategia para el compromiso del cliente y la gestión de inventario
Cómo monitorear cada KPI de su negocio con datos de su PDV, ERP, CRM, comercio electrónico y otras aplicaciones críticas integradas en el software de análisis de Retail Pro Decisions
Qué información necesita obtener de sus datos ahora para orientar sus decisiones a medida que vuelve a abrir y se vuelve a conectar con los compradores para el resto de 2020
Stores are starting to reopen across the world, and we are watching this very, very carefully.
We’re learning a ton of new things while watching what they are doing, because some of these stores are doing excellent business.
In some cases, they are exceeding last year’s numbers! Let’s take a look at what the most successful retailers are doing to make this happen.
Overall, you have to approach opening as if you were opening for the first time.
It has to have that level of excitement, that level of enthusiasm.
So my first, best advice to you is to get super pumped up about opening!
1. Store Presentation and Layout
This is the perfect time to reassess your store’s layout and shop-ability.
You certainly want to organize your store so your shoppers can maintain the proper social distance from each other and still see all the great merchandise you have in stock.
Here are some tips you can apply:
Start at the front door, and look inside your store as if you’re visiting for the first time. Can you see all the way to the back wall? Can you identify key areas that you want to go to to see the merchandise?
The most important real estate in your store is the immediate right. Do we have some of our best merchandise there?
Many stores are putting markers on the floor that direct people through the store, creating a path to follow, much like grocery stores or Ikea have done. The benefit of this is that when your shoppers walk the path, they can see merchandise they might not have seen. This is creating add-on sales!
As you walk the store, make sure your displays make people want to stop and check out the merchandise. Make the displays compelling with cross-merchandising, props, bundles, and multiple levels.
From each display that causes a shopper to linger, where will they go next? Merchandise your displays that lead the customer through the store, directing their eyes to the next great display of merchandise.
Signage is super important. Yes, you want to have signs that remind people to obey social distancing, but they don’t have to be negative or serious. A western apparel store put up signs that say, “There should be a cow’s distance between us!” Another store posted a sign that said, “If you can read the label on my jeans, then you’re too close!” Make it fun!
This is also a time to ensure you have excellent lighting that shows off and spotlights your great products.
For many years, I have said that marketing should have a two-word definition, which is “Creating Demand.”
That means that any messaging you send out, whether it be by email, social media, or texting, should first be checked to see if the message makes anyone want to come to the store or the website, or to find out more.
If it doesn’t, rework it until it does.
I think the best messaging for reopening is, “We are back, we are safe, and we are ready for you!” Customers need to feel like you are welcoming a long, lost friend to the store.
Show them in your videos (you ARE doing videos, right?) and posts how you are working hard to keep the store clean, safe, and fun.
There is a lot more activity in social media and emails now. More retail stores have had to quickly open up e-commerce sites, and the only way to promote those was to send out tons of social media posts and videos, and emails. So it’s noisier out there, and to compete you have to generate as much activity as everyone else. That means 2-3 emails per week, multiple posts on social media every day, and at least a couple of videos.
While I’m talking about videos, did you know that YouTube is the #2 search engine on the planet? That means that you need to have your own YouTube channel, post all your videos on there, and make sure you tag them properly so people can find and watch them, and want to come to your store.
I have to confess that up until recently, I was not doing much with hashtags in social media.
But I have come to learn that they are the best, most direct path to getting more customers to follow you.
That said, they have to be the RIGHT hash tags – in other words, “#clothing” is not going to help you, but “#darkwashskinnydenim” will.
Look at other stores and brands that you admire and take a look at their hashtags.
Incorporate those into your posts and see if they get you more likes and followers.
As you open your business, you’ll also need to give careful consideration to your staff’s needs and your personnel needs as well.
Keep in mind that with social distancing, you may not need as many people on the floor as you did previously. Also, your store may have different hours now. So first, consider what you really need in terms of floor coverage, and then deal with any employee issues.
Some of your staff may be reluctant to come back. It may be that they are scared of the virus and don’t want to return. It may also be that they are enjoying the extra money they’re getting while on unemployment. This is all understandable, but you cannot be held hostage this way. Retailers who have faced this have had to get new staff, and you may have to do the same.
The ones that do come back will need some additional training. First, they need to learn some new procedures in the store, especially regarding cleaning. We need to show customers that our stores are clean and safe, and so your employees will need to know how to clean and which areas to clean. Of special concern for apparel retailers is the dressing room. It needs to be cleaned between visitors, and I would recommend posting a log inside the dressing room that shows how often the dressing has been cleaned.
Staff will also need to be trained on how to sell from 6 feet away. How do they still engage with customers, make recommendations, and lead them to the purchase? Certainly, one of the things I think they’ll need to work on is how to move the conversation from the awfulness of this pandemic, to positive things. It’s something they need to drill before you open.
The politics of salesmanship are yet another challenge we have to get past.
Scroll through social media for 2 minutes and you’ll see tons of divergent opinions about how this whole situation should be handled.
Some of your customers are going to be worried about being out. Make sure they feel warmly welcomed, and make sure they see that you are cleaning the store, that you are safe, and that it’s OK to be there.
Other customers will want to completely ignore that there is a virus at all. Be careful about any customers who do not obey social distancing, for this reason only: you could freak out other customers who see it, and that could get you a nasty scene on the sales floor, or a nasty online review.
Lots of stores are stepping up sales by setting appointments to visit the store. An appointment is almost a guaranteed sale, because you wouldn’t make an appointment unless you had a strong interest in buying product, right?
Products that are touched by customers need to be cleaned. Garments that have been tried on need to be steamed, and everything needs to get looked at to ensure safety. This is part of what your employees need to show customers on the floor – that we are safe, and the merchandise can and should be touched!
We are seeing a large variety of methods of selling right now. It’s a broad topic and way beyond the scope of this post.
The most important thing I can tell you is that we’re all learning how to sell in this new era, and there will be lots of tips and tricks coming.
Frankly, the absolute most important thing in this blog post is a discussion of your merchandise.
Having the right merchandise is the key to your survival.
First, look at your Spring merchandise. We think Spring will be extended by a month or so, since people have not seen a lot of the merchandise you received when then lockdowns started. Look carefully at what you have and what’s on order. Talk to your vendors and find out if they still have goods and negotiate for discounts on whatever they have left, but only if your Open to Buy plan (you do have one of those, right?) tells you that you need it.
Fall goods could be tricky. We’re already hearing that many manufacturers are not able to produce their typical Fall production because of the shutdown. Start talking to your vendors about Fall and see who can and cannot ship, and how that will affect your assortment plan.
Most importantly, you need a sales plan that you believe in, coupled with an inventory plan that enables you to turn goods even faster than you ever have. In all of our merchandise planning and open to buy planning, we are putting together models that ensure positive cash flow through proper sales forecasting using algorithms and artificial intelligence. Cash was always king, but now, it’s super-king. Make sure you have a solid plan to get you through the rest of this year!
One last thing, which is really, really from my heart. I believe in independent retail. I believe in you. Every politician says that small business is the backbone of our economy, and that’s true.
That said, small businesses are the people who build communities, who take leadership roles to give everyone a better life.
To that degree, you are more than the backbone of the economy, you are the backbone of society itself.
As such, your survival is hugely important!
And you can do it, if you apply these first tips that I’ve listed here.
So go for it. Make it happen, for you, your family, your community, and for the future for all of us.
We all stand with you, and we’re cheering you on!
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Crises such as COVID-19 present the shopping public with tough decisions.
During the current uncertain times, many are anxious about surging unemployment rates and continued social distancing protocols in public.
Some shoppers will be forced to “make do” and sacrifice “nice to have” purchases for those that are considered “must-have.”
Luxury buyers, however, are less concerned about price, and more focused on quality.
High quality wins high loyalty
Luxury shoppers tend to have a strong bond with the brands they favor; customers are loyal to them for their reputation for quality.
This group is not concerned with price; sometimes, status is part of the allure, but increasingly, these shoppers see their purchases as high quality and as investments.
For instance, the purchase of a limited-run, hand-crafted handbag or a precisely cut French crystal decanter could very well be enjoyed for a lifetime before being handed down to a grandchild.
The worth of those items is tangible: It is evident in their appearance they are quality items. They are not trendy, flashy pieces evidencing conspicuous consumption and thereby casting their owners in the harsh light of criticism.
Instead of being symbolic of an ostentatious life, luxury goods will, at least in the near-term, likely fill a somewhat more practical need.
They will be expensive but will focus on the overall value and their storied histories.
Such brands often have rich backgrounds, and they’ll focus on their uniqueness and heritage to their new and loyal customers who are now shopping in a more discerning manner.
Understatement will rule the day, and prominent logos will fade.
The voice of luxury during the lockdown
But not all luxury brands will come out of this retail lockdown for the better.
Those who were actively promoting their products’ quality as part of an overall “lifestyle” will fare better than those who were passively counting the days until reopening, focused on cash and cutting employees.
Brands who have furloughed their distinguished associates and gone into hibernation are risking their futures.
They have damaged their abilities to create the value for which they were once renowned, and that once drove their customers’ eagerness to buy their products.
Goods & experiences
Pre-COVID, luxury goods were feeling a bit of a pinch, as millennials looked toward more “Instagrammable” high-end experiences.
Boomers, too, having bought and accumulated luxury items over the years were also looking at trips and adventures rather than jewelry or automobiles.
Analysts at McKinsey note that while the positive momentum of experiential luxury will likely persist, it will slow down in the short term as consumers temporarily revert to buying goods rather than experiences.
From depression to recession, the luxury sector has reinvented itself many times.
It is as strong as a colobolo desk, yet as fluid as 1959 Dom Perignon.
Companies that were well positioned before the crisis yet continued to have a positive presence throughout the retail shutdown could well wind up stronger, more innovative and more deeply connected to their core customers – and attract some new ones as well.
Retail Pro International (RPI) is a global leader in retail management software that is recognized world-wide for rich functionality, multi-national capabilities, and unparalleled flexibility. For over 25 years, RPI has innovated retail software solutions to help retailers optimize business operations and have more time to focus on what really matters - cultivating customer engagement and capitalizing on retail's trends. Retail Pro is the chosen software platform for omni-channel strategy by retailers in 130+ countries.