The global retail industry under extreme pressure
The global retail industry is facing unprecedented challenges. While many brick-and-mortar stores were already floundering well before the pandemic, its disastrous effects have proven to be a coup de grâce for a number of them. And having a high-profile name has not granted any immunity; Victoria’s Secret has declared bankruptcy, Chanel and Hermes have been discontinued, and Patek Philippe and Rolex have discontinued production.
And in the U.S. alone, an estimated 12.000 to 15.000 retail stores are closing in 2020. Among them the stores of J.Crew, Gap, Macy’s, Forever 21, Nordstrom, Sears, and JCPenney, one of the country’s oldest retail companies.
While this paints a grim picture for the industry’s future, there is still some good news for the retailers still left standing. This includes those in the Caribbean, a segment that has long suffered under the assault of Amazon and Aeropost, i.e., online shopping and the unending supply of goods shipped from the U.S. to the Caribbean.
This good news is that creative minds were already working on innovative ways of creating seamless retail experiences on a smaller scale in the pre-COVID era and they have begun rolling some of them out for mainstream use.
The use of AI (Artificial Intelligence)
Retail companies have long been aware of the enormous potential of AI to enhance the customer experience. A chain store that made excellent use of this technology is the Paris-based fashion giant Sephora. In 2012, they launched the Sephora Color IQ, which is an AI-powered product that scanned shoppers’ skins to give them customized shade recommendations for their makeup. Adding this feature brought a significant uptick of foot traffic to Sephora stores.
And AI may continue to play a role in the future of retail. Sanctuary AI — a company co-founded by AI and robotics savant Suzanne Gildert that aims to create robots, known as synths, that are almost indistinguishable from humans physically, cognitively, and emotionally — is creating human-like robots that can act as social companions, have conversations with people and even share their interests. These robots may be used in retail stores in the future.
In a hypothetical scenario where these robots are in wide use, shoppers can go to a clothing store, for example, and engage with a human-like robot there, then go to another branch of that same store in another location and engage with a different human-like robot while never missing a beat in their personalized shopping experience. This is because AI and recognition software will enable communication and data sharing between those two robots, making it possible for them to adjust their dialogue to each individual. The whole process will be as smooth as a freshly ironed shirt.
Introduced in 2010, omnichannel retailing completely integrates all existing retail channels; the physical store, online channels, mobile devices, all connected. This means that shoppers can simultaneously use different channels in their shopping process, starting their search at one and finishing the purchase in another. This gives them options to create their own preferable shopping routines and gives businesses an entirely centralized data management across all channels. This, in turn, delivers efficient synchronization between them and a highly personalized shopping experience for the customer, a must for success in the digital age.
During the pandemic, this personalized touch proved to be a winning formula for wholesalers that were already employing the omnichannel approach — in February alone the number of shoppers making use of the BOPIS omnichannel model (buy online, purchase in-store) experienced a significant increase.
What retailers can do now: going digital
As you can see, retailers don’t need to start from scratch here. But they do need to act, and they must do so in the digital sphere. They now have a golden opportunity to use technology and digital media to make the marketing of their products a truly transcendent experience that appeals to all the senses of consumers.
Advancements in motion design — applying graphic design principles to filmmaking and video production — can work wonders in that regard, creating audiovisual works that truly immerse potential customers into the look and feel of the product. There are plenty of creative agencies that can take care of this for them. For example, the American mattress and pillow company Purple hired the creative studio ManvsMachine to create a commercial in which the signature gel grid of their mattresses is expertly and meticulously portrayed being twisted, compressed, and suspended in midair, putting its elasticity and comfort on full display for viewers.
It also cannot be overstated that retail outlets need to loosen the purse strings when it comes to investments in advertising on digital channels. This involves comprehensive paid research on keyword performance and consumer intent in addition to placing featured products and clickable content on social media platforms like Instagram and Facebook.
What retailers can do now: partner up
As has been the case for many other industries following the COVID-crisis, companies in retail will need to aim for collaborations to keep themselves afloat. Several department stores have already started exploring strategic partnerships across the industry. This can be a very strong move as it gives each partner access to new abilities while also expanding their reach to new markets. Expect more of these in the future.
What can be done in the Caribbean
While it certainly behooves retailers in the Caribbean to make use of these approaches and strategies to put themselves back on the consumers’ radar, they would benefit most from implementing them hand-in-hand with another supremely crucial offering — selling customer experience.
Nespresso, for example, has doubled down on marketing the experience of drinking their premium quality espresso coffee, placing special emphasis on authenticity and coffee pleasure. This most certainly trumps the experience of simply ordering a Nespresso coffee mug online and getting it in the mail. Caribbean retailers can follow a similar line in their marketing, highlighting the unique ambiance that comes with using their product or visiting their establishment.
And make no mistake there is still a market for them to corner. Amazon and Aeropost are popular in the Caribbean, yes, but shoppers need credit and debit cards to use them and studies have shown that 65% of the region’s population remains unbanked. So many of these individuals are still buying things locally, not online.
The main takeaways
Sephora’s use of Sephora Color IQ illustrates how, aside from drawing customers in, the right use of technology can also keep them coming back. Other brands also experimented with this at the height of the pandemic. The jewelry brand Kendra Scott, for example, introduced the platform Virtual Try-On, which lets shoppers preview how they would look wearing the product virtually through AI, AR (Augmented Reality), and machine learning technology.
Others also provided digital services such as virtual appointments, where store clerks use platforms like Zoom to give customers personal attention, and engaged in live streams in which store clerks promoted their products.
Droplets of this approach must also trickle down to the Caribbean region, where many retailers have yet to achieve mastery of technology integration and omnichannel offering for their products and services. But once they have accomplished this, they must place a heavy emphasis on customer experience as a crucial component in their repertoire or else be doomed to continue losing business to online shopping. Because the move to digital marches on, and this is their last hope to compete.