Today, HP announced it has won the Keypoint Intelligence - Buyers Lab PaceSetter award for retail. Based on in-depth research, this award recognizes the vendors that offer the most impressive portfolios of hardware devices, software solutions, and technical and professional services.
This award comes at an especially tumultuous time for retail.
It is easy for the news media to view COVID-19 as the final act in the retail apocalypse. But that view is much too simplistic and short-sighted.
Actually, the pandemic is more like a frantic intermission, a time of dramatic change and acceleration of technological innovation.
It is true that the global impact and velocity of the virus made us realize how fragile our world is and how dramatically and quickly everything could be upended in just a few weeks. Post-traumatic growth is the (sometimes radical) positive psychological change experienced as a result of adversity, resulting in a higher level of functioning. It is what the retail industry is experiencing now. It has already demonstrated resilience and limitless possibility in the face of this emergency. In fact, in May, retail sales jumped 17.7 percent, indicating a faster-than-expected recovery after the largest downturn since the Great Depression. Part of this may be attributable to the fact that the very nature of the pandemic forced us to face what most of us could never have imagined—and to innovate quickly in order to cope.
And, while the last few months have made predicting the future more difficult, here are three observations of what may lie on the horizon for the retail industry.
The future is now
COVID-19 sharply accelerated many shifts that were already in play and compelled retailers to develop new skillsets to match customers changing behaviors. Initiatives—such as omni channel, self-service, ecommerce and mobile—which retailers may have targeted to complete in months or even years were pressed into action within weeks. Those who are technology-forward and invested in award-winning retail solutions were in a position to shift faster than others and weather the crisis with less angst.
Overnight, curbside pickup and delivery-for-everything became the de facto standard. In May, for instance, buy online, pick up in store (BOPIS) purchases grew by more than 500 percent. This is not simply a novelty geared toward younger consumers. We also saw an increase in the number of new online shoppers, particularly the baby boomers. Going forward, these trends will be hastened. Retailers will reconfigure space and invest in equipment, processes and technology for increasing BOPIS orders.
Cashless transactions will further replace ‘dirty’ physical bills and coins. Conversational commerce—using voice commands and AI to fulfill shopping needs—will gain traction, and consumers will experience a new level of automation as technology learns to predict user inclinations and begins to make decisions for them based on past behaviors. AI will also enable sales associates with faster access to inventory and customer buying behaviors. IoT enabled devices in physical locations will allow retailers to track and analyze customer preferences, shopping behaviors, inventory management, traffic flow and personalize offers.
The speed and length of recovery will affect long-term consumer notions and will reveal just how sticky the new focus on sanitary behaviors really is. Certainly, we can anticipate more government regulations and consumer and employee protections.
As stores and restaurants begin to reopen, we can expect that overt indicators of hygiene and protection at retailers will continue to breed confidence with consumers. Guests will look for low- or no-touch options, so technologies such as gesture-control versus a touchscreen or magic mirrors to try on clothes or makeup, QR codes for menus, reviews and coupons, and contactless checkout will accelerate. At the same time, technology to replicate what we miss from in-store experiences is certain to expand. For instance, haptics will let us experience the texture of a pair of jeans from the comfort and safety of our living room.
In some segments, retailers that demonstrate tight controls will win. As an example, Costco, a designated essential business, took an almost militaristic approach to welcoming customers in their warehouses from organizing lines and counting the number of people in store, to marking out six-feet waiting spots, requiring face masks, instituting one-way lanes and moving people through faster by opening more checkout lines. Setting clear expectations about hygiene and wait times for members instilled trust in guests and kept them coming back.
What about associates? Most retail employees don’t have a remote work option, and will demand on-the-job protections such as face shields, masks and gloves. Some stores have installed Plexiglas barriers between shoppers and clerks; retailers will need to consider if and how the value of a personal connection is impinged if this becomes the new normal.
Tectonic corrections persist
It is no surprise that the pandemic’s repercussions on retail will continue for months, likely years. What may be unanticipated is the breadth of the possibility spectrum. At HP, we recently hosted a Retail Advisory Board and the ideas generated showcased a remarkable range of potentials, influenced by segment, geography, business size and culture of innovation.
CNBC’s Jim Cramer said that the most recent coronavirus has produced one of the greatest wealth transfers in history. IHL reports that in North America, more than $250 billion moved from small to large retailers during the shelter-in-place.
Big malls and department stores, already under extreme pressure before COVID, will now be forced to reinvent, quickly, or die. Restaurants will need to identify how to survive with reduced occupancy. As businesses are shuttered, the commercial real estate market will have to adjust with lower rents, and vacant establishments will be fertile ground for a SMB renaissance, offering purpose-built space at a more affordable rate. Will brick and mortar become a new status symbol or social outlet? As online shopping becomes more common, consumers will likely look for opportunities to engage with products and connect with other humans.
There is no question that the pandemic has fundamentally changed retail but we believe technology will play a central role in shaping the industry in the post-COVID 19 world.