With corporates reducing the Diwali gifting budget and consumers opting for low-key festivities, the buzz around the festival season seems to be missing. The challenges brought on by the pandemic have toppled the retail industry by shutting several businesses, as well as changing consumer behaviour.
“Until last year, we were inundated with orders for dry fruits, chocolates, food hampers, etc., during the festival season. However, this year, there has been a huge dip in orders as people are going for low-key celebrations and avoiding socialising due to the fear of Coronavirus pandemic,” says a dejected retailer based out of New Delhi. Levi Strauss & Co. CEO Chip Bergh also feels the retailers’ pain and tells CNBC that this holiday is going to be unlike many holiday seasons that any of us have ever seen before.
In several countries, the retail sector is already bearing the brunt of the pandemic. While on the one hand, several retailers have shut shop and filed for bankruptcy, the remaining are facing challenges from the declining consumer demand and competition from online and discount models. Also, products shipped from other countries have failed to arrive on time, throwing the whole supply chain into chaos and thus impacting the holiday retail strategy for this year.
Let us examine the challenges faced by retailers and how they can overcome them during the festival season :
Managing demand fluctuations : Retail outlets, except groceries and pharmacies, situated in the “red zone” are experiencing a considerable drop in physical footfall in malls and other outlets. However, it is business as usual for other retail outlets. Hence, the ability to predict and manage demand in the present context has become the key to survival.
Loading up the online carts : More and more people will opt for online shopping due to the looming threat of the winter season sparking wider spread of the virus. Deloitte expects holiday e-commerce sales to surge by 25% to 35%, prompting the need for retailers to invest more in digital.
Shipping nightmare : As more and more consumers would be opting for sending gifts online and not physically, retailers should brace themselves for bottlenecks in the delivery process and delay in shipping.
Long-term supply challenges : Country-wide lockdowns have caused substantial variations in the magnitude and timing of supply chain disruptions across geographies. Retailers should be speaking to their leading suppliers to assess their risks, classify any indirect exposures and make contingency plans to deal with it.
How to address these challenges :
1. Start early : With the festival season upon us, retailers need to start their early preparations. Due to the pandemic, the supply chain has been impacted, and as a result, inventory management needs to be taken seriously. A smart POS system with strong inventory capabilities streamlines your processes by ensuring that your sales and stock data are in sync.
2. Strengthen your omnichannel game : With consumers opting for an omnichannel shopping experience, retail outlets need to up their omnichannel game and ensure that they are ahead of the competition. They can-:
3. Focus on your brick and mortar shops : Make sure you are following all safety and hygiene measures, especially during the festival time. Ensure-:
4. Use outdoor space wisely : Your consumers might be anxious about the closed spaces during the COVID-19 pandemic. Hence, taking it outdoors can attract more foot traffic to your store. Adding some shelves or racks with impressive signage or pop-up shops can be a boon for your business during these testing times.
5. Personalising the consumer experience : Highly personalised customer experience can build consumer trust and simplify their shopping experience. Retail giants like Amazon have taken personalisation to a new level. Now, customers expect personalised interaction with the brand or retailer at multiple touchpoints, allowing them to allocate their time and money according to their preferences. For example, Amazon Prime Wardrobe‘sshopping service exclusively for Prime members offers personalised recommendations from more than half a million items across brands as per your taste. Another example is Sephora that offers personalised experiences that are truly omnichannel. While its mobile app enables the consumer to go for in-store makeovers, its loyalty programme called Beauty Insider offers premium members early access to new products, free custom beauty services, etc.
6. Manage your retail inventory : An effective inventory management system is the backbone of any successful retail business. During the festival season, you can follow these simple steps to save both time and money, and at the same time, meet your customers’ needs-:
7. Contextual marketing : As consumers’ preferences change momentarily, brands need to be there with them at every step of their shopping journey and adopt technologies that empower them to achieve this. By offering targeted advertising to the consumer, based on their user identity and the content searched by them, you can grow your sales. For example, if you know that a person is browsing a sports website for the latest information on IPL matches, then you can send them an ad pop-up which displays club merchandise of their favourite team that they can buy. Hence, marketing the right thing, at the right time, to the right person can make a huge difference.
Predicting festival shopping 2020 :
This year, gifting is all about showing your love and care at a time when people are anxious about the future. As per a report published in Forbes, 56% of people surveyed said that they would pick gifts that are practical, functional and meaningful for holiday shopping. The gifts should communicate how important the recipient is.
Another interesting trend is that the focus will be more on retail products and not services because of COVID-19 restrictions. Hence, people will be spending more on tangible things like at-home fitness equipment, comfortable clothing and desk accessories rather than a free visit to the salon, dinner coupons, holiday vouchers, etc.
So with all these predictions and the help of data analytics, retailers can seamlessly function during the festivities, despite the pandemic. For any more information on how to prepare your retail store for COVID 19 holiday shopping, please request for a free demo of iRetail software from our retail specialists.
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