Adapt to survive.
With shifting consumer behaviors, 2020 has been named as the year of the retail apocalypse. To survive this apocalypse brands must understand the changing attitudes and needs of their consumers to adapt their brand strategies accordingly.
In this article, Rumana Sadekar, Associate Director at Hall and Partners MENA, discusses why research is critical to pull through and emerge in this changing market landscape.
Walgreens closes 200 stores. Guess will close 100 stores in the U.S. and China. Vitamins and supplements retailer GNC filed for bankruptcy in June and said it expects to close between 800 and 1,200 stores. 250 stores of Victoria’s Secret to be closed in the US. In the UK, fashion brands Monsoon, Accessorize and Quiz are closing branches. Inditex said it will close 1,000-1,200 stores worldwide over two years and focus on digital growth. These are but just a few examples of retailers who were forced to shut down shop due to crippling sales during this pandemic.
While we cannot deny that most economies are at a standstill due to a lower propensity to spend, we can safely say that retailers were already coping with changing customer preferences and shopper behavior prior to COVID-19. According to Business Insider, between 2019 and 2020, the amount of growth in retail sales was estimated to drop by 4.4%, which has escalated to 5.7% due to the pandemic. So now, with a magnified strain, retailers are grappling to bounce back from this pandemic. It has become critical for brands to understand how to shift their focus from purely in-store retail to an omnichannel experience. While shifting focus cannot be a haphazard decision, retailers should focus on solutions that will build brand relationships that matter. In such pressing and dynamic circumstances, the only way to budge forward is through understanding customer needs and expectations.
People are faced with an uncertain and potentially grim future which causes a shift in buying predispositions. Consumer preferences and values are changing overnight. While buying sustainably may have taken a back seat for consumers temporarily, there is an incline in buying local and supporting the community, especially the ones hardest hit during this crisis. This is where consumer research plays a substantial role. Through research, it would be possible for brands to explore some deep-rooted psychographic tendencies as well as understand the obvious behavioral changes for e.g. what would lead some consumers to naturally restrict their purchases to essentials while some others to grab a bargain for non-essentials. Narrative and communication research will aid brands to communicate in a manner that resonates with their audience, and one that consumers are expecting to see and hear. Projective techniques in qualitative interviews can guide brands in understanding how to seamlessly nurture their brand’s customer experience.
While the long term social, economic and health impacts of the COVID-19 are still unknown, retailers must plan and act according to the changing mindsets and behaviors of its consumers. Budget allowing, research should not be optional during a pandemic, as it would determine the right measures for a brand to bounce back by proactively tackling short and long-term challenges.