Business scenario today is full of new ideas, acquisitions, sell outs and claims about the notion “We Understand Consumer Psychology”.
The pandemic has taught the consumer some important lessons. The most important one being, the local store consumers ignored for so many years, came to their rescue and supplied essentials to them. This episode has helped cement the position of local retail stores in the competition. As consumers panicked to stock essential items, these stores made sure that they served the customers and also maintained that personal touch. There were instances where the grocer was asking the customer if they want a particular product as it used to be a part of their shopping list before. No other feeling than gratitude is in consumers mind because of such service by the local store. There are commitments by the consumers now that they will only buy from that store which helped them during the lockdown.
So, how does this shift in consumer behaviour impact organised retailers?
First, there will be less number of customers who will actually visit malls and specialty retail stores in near future. The fight with COVID is not only at vaccine level to tackle the actual illness but it is more to get citizens out of the fear they have been living in since March. The psychological effect will be greater than the actual affected number and it will somewhat go unnoticed till there is an eruption in visible effects. Consumers are scared of moving out of their homes. In a way, that is good to control the virus spread but it also poses challenges for stores which are open but do not have consumer footfall as they would have liked.
Then, there is a concern about social distancing at these stores. Some retail stores have narrow allies and billing counters close to each other. It will definitely increase the chances of crowding and there is a fear of virus spread. Whatever plans are implemented in the store for social distancing, early trends have shown that they are not followed rigorously. Once consumers see that, they will not return to the store because they don’t wish to take any risks.
So, with this discussion, the obvious answer would be the businesses will go online. But that (easy) answer was applicable before the pandemic, not now.
This scenario has forced many businesses to re-engineer their processes. Those who try to implement the same processes as they had earlier have failed. The new business model is and will have to be different than the earlier one. No shortcuts!
Online stores have faced delivery challenges, some partly because of the government restrictions on movement and some due to the delivery experience customers have had. During the pandemic, customers have experienced lost packages as the parcels were kept at the society entrance. Sometimes the delivery person would not call the consumer that the parcel is kept at the gate. Some consumers also reported that the packages were opened by someone as they were kept unmonitored. Valuable orders were lost and online shopping sites received many grievances from the consumers that they haven’t got the delivery whereas the order status showed it was delivered. So the last mile delivery issues took the consumer away from shopping sites. It is a process where consumers will eventually prefer not to order online.
There were instances where the items arrived in really bad shape. Logistics chain didn’t take care of the item and the consumer received the package and the items in damaged condition. That mainly happened for consumables where in a race to deliver fast, the quality was compromised. Consumers today also want quality – basics of retail!
This is where local stores have picked up post lockdown. They already had consumer goodwill as mentioned earlier and they just capitalised it using the technology.
They are using social media to broadcast the products and offers that they have in store. Some have started using Google forms to capture customer order list. A photocopy of the bill receipt is sent on the customers number and payment made through UPI and thus delivery is done subsequently. Consumer satisfaction is maintained through this as timely delivery of quality products from the ease of one’s home is ensured.
The hub and spoke model that online retail implemented has made the process longer and the industry is experiencing that now. The concept of ‘Glocalogistics’ addressed just that and it helped local vendors convert their business into technology compliant models with minimal complications and higher consumer satisfaction. Local stores don’t want you to create an account, generate OTP, save addresses, follow a complicated search process on the portal. It is as simple as sending a message and getting product delivered. So the “efforts” by the consumers are reduced and the quality of service has gone up.
Online and big retailers should change the approach and not go hyper local but go “micro-local” with a retail strategy. This involves a lot of training and changes to the current setup but it has to be done if they want to stay in the game.
Pandemic doesn’t mean a threat to the business but it needs to be considered as an opportunity.
Let’s simplify retail space and de-clutter the sites (way they bombard products on the visitors online). I call this design philosophy as – “My List, My Options”
It will be interesting to see future of retail when there are multiple acquisitions taking place (mostly with old consumer spend analysis!).
The views and opinions expressed in the article are those of the authors and do not necessarily reflect the official policy or position of The Tilak Chronicle and TTC Media Pvt Ltd.