Six innovation plays for the retail industry following lock down — PART 2
In part 1 we explored how coming out of lock down retailers will need to lean into local purchasing, become more purpose driven and adjust supply chains for customer demand. In part two we look further into future with new business models, delivery innovation and re-imagining the in store experience.
4. Harness new business models and ecosystems in the new world
If there is one thing that the sudden shock caused by COVID 19 has proved it’s that a lot of organisations are now having to rethink strategies around change, with little slack in the system to pivot at pace if required.
UK supermarkets have been allowed to become innovative during the pandemic with the use of competitor logistics and inter-company data sharing. Whilst this will have had efficiency and environmental gains, it’s unlikely this will remain in place long after the pandemic, retailers should consider how they can adjust their operations for speed and match the raised customer expectations.
For the short-term, retailers have been partnering with delivery platforms such as the Morisons and Deliveroo partnership and in the US, ride-sharing firm Lyft partnered with Amazon for package and grocery deliveries. With people realising they can get almost anything delivered to their door retailers should consider partnering with gig economy companies to stay relevant and maximise the channels available to them. Larger retailers who have struggled with home delivery may look to adjust their business model similar to Amazon’s fluid staffing solution to delivery Amazon Flex.
Even large retailers may have to come to terms with the fact that they can’t do it alone and should leverage a wide ecosystem of partners to achieve new and exciting customer experiences.
5. Leverage emerging technology for home delivery of the future
The gig economy may have been the hero to serve customers and meet demand during the lockdown period, but what’s to say the home delivery or in store experience of the future will involve human contact at all?
Dominoes had already trialed driverless vehicle delivery of its pizza in Texas before the pandemic, and during lockdown an Irish start up Manna Aero receives authorisation from the Irish Aviation Authority to commence drone delivery of goods. Companies should consider how they can leverage such merging technologies for the long run for efficiency and a contactless lifestyle.
Robomart takes a slightly different approach by loading up driverless vehicles with food and goods that are constantly roaming the streets with you calling the vehicle to your front door, dubbed “store-hailing”, to purchase goods from the vehicle. Very convenient indeed, environmentally sustainable? maybe less so.
Retailers who want to show purpose and commitment to environmental sustainability may combine deliveries of customers or even with competitors (regulation permitting). Allowing consumers to have all their orders from a retailer (and even the competition) delivered together can help reduce both cost and carbon footprint. In 2019, Amazon introduced a new delivery option for its Prime members called Amazon Day, which allows customers to choose any day of the week to receive all the orders at one time. Letting consumers opt for wider delivery slots can help optimise routes and reduce carbon emissions as well as costs.
6. Redesign in store experiences for a completely contactless future
With the contactless home delivery becoming more common place retailers should aim to reduce contact points in store also. Whilst people free checkouts are by no means new, retailers should think about how they can adjust in store experiences to reduce time in store and create frictionless shopping.
In a recent survey, 41% of customers would prefer a non-touch based self-checkout system (using their own phone, for instance) when shopping in the store. Whilst this may seem attainable only for the Amazon Go’s of the world, smaller retailers should leverage the retail tech ecosystem to implement autonomous checkout mechanisms via third-party applications on consumers’ own phones.
If in store touchscreens are to be a thing of the past, companies will need to provide high quality video analytics, motion sensors or voice capabilities, complete in-store automation. One challenge remains however, which is how to keep retail human centred in a store and delivery world with no human interaction? Again, there is no shortcut — a deep understanding of the customer with heightened empathy.
Conclusion
Speed and agility trumps crystal ball gazing
No one can speak with absolute confidence as to what the future holds, but one thing looks certain; organisations that are set up for speed and agility with thrive and organisations who are rigid and inflexible will not.
It’s the thing that underlines everything — need to pivot your business model? Need to channel goods differently through your supply chain? Need to address a new target market or retain an old one? Having the right culture, processes and mindset for speed and agility is key.
The ability to reframe the current context, experiment in the new “normal” with in market tests and then pilot and scale under short time frames will always trump dodgy predictions.
No one can predict what is going to happen in the future. However, having a sufficiently nimble organisation with a focus on experimentation you will be able to bounce back faster than others. The ability to react at pace will always be more powerful than attempting to predict every scenario and forward plan.
