MODEL RELEASED Shopping online with a tablet computerVARIOUS

Thanks to the coronavirus pandemic, the tech imperative for retail has sprung forward by a matter of years, experts say.

The scenario playing out is that brands and retailers that previously embraced technology have a foundation now to handle the current crisis. The lesson for companies that manage to survive the coronavirus is to meet consumers where they are — and for now, that’s at home on their devices.

“People that got ahead of the curve with omnichannel — of delivering app, web and in-store experiences — are reaping the benefits of that, especially if they’re qualified as an essential service,” said J. Bennett, vice president of operations and corporate development at Signifyd, a fraud technology platform for the retail industry.

Thanks to its focus area, the company has a unique perch from which it can see transactional data and trends across online and physical retail.

The most obvious examples of omnichannel giants are Amazon and Walmart, Bennett continued. “Amazon is able to continue to deliver because its facilities are delivering goods and services to end users in their homes. Someone who doesn’t have an online store does not have that argument to stay open — they have to close their physical stores,” he explained. “Walmart has the number one app for groceries on the iPhone’s App Store. That’s because they have that app already.”

Signifyd’s Weekly Pulse Report for E-commerce covering the week of March 31 to April 6 saw online sales grow 17 percent week over week, adding to a nearly 40 percent jump since the end of February.

In terms of trends, the company noted that consumers were on the hunt for their “short-term normal” as shelter-at-home orders continued. In other words, initial panic buying eased up and consumers started thinking beyond the necessities of just getting through the lockdown.

Throughout March, fashion purchases between $250 and $500 had been up 49 percent between the beginning of February and the end of March, showing week-over-week growth throughout the month. Meanwhile, interest in luxury goods spiraled downward, but then seemed to rally as March wound down and April geared up.

As of the last report, luxury products and beauty and cosmetic items both experienced double-digit sales increases, at 10 percent and 29 percent growth, respectively.

Sales only paint part of the picture, however. Where shoppers purchased may matter even more.

“The thing that I think is most interesting is that the [e-commerce usage] of new users — people who have not bought online before — is the highest that it’s been since last Cyber Week in the holiday period,” Bennett said of the 2019 holiday season, when Cyber Monday pulled in $9.4 billion and qualified as the largest e-commerce sales day in U.S. history.

“I have a graph that is just a hockey stick up, in terms of new users, and folks that are buying for the first time and then repeat purchasing within the first week again,” he added. “And so what we’re really seeing is consumer behavior changing a lot.”

It is this scenario that has merchants of all sizes running to play catch-up now.

According to Shopify, the week of March 30 saw new global online stores jump 8.5 percent from the previous week. Operations that were still in business also raced to spread the word, with Shopify merchant ad spending up more than 7 percent compared to the previous week.

The data also cemented one of the latest retail tech trends: The platform saw a massive uptick in curbside pickups for online orders, with a 185 percent surge week over week.

“Early signs indicate brick-and-mortar businesses are pivoting online as consumer demand shifts. With this shift, ad spend is up as merchants look to reach more consumers. Meanwhile, more brands are offering consumers options to bypass shipping as we’ve seen an increase in buy online, pickup in store,” a Shopify spokeswoman told WWD.

The reason looks like equal parts logistical considerations and nerves. Turns out, that’s especially true when it comes to fashion.

“Merchants in most product categories increased days-to-stock out compared to last week, with the exception of apparel and accessories, which dropped minus 10 percent,” the Shopify representative added. “This implies either a supply chain issue or an inability or unwillingness to invest in goods that can’t be sold in the current environment.”

Ultimately, the pandemic appears to be forcing a sort of retail Darwinism, where only the fittest, smartest and perhaps most innovative can survive.

“I’ve actually seen some of the largest companies in the world pivot very quickly in response to this, because it is so extreme,” Signifyd’s Bennett explained. “I think people will actually come out of this with a lot more of an innovative mindset. That’s probably going to be one of the biggest things that will shake retail out of its stupor.”

Put another way, the existential threat that so much of retail is living through shouldn’t be for naught. The new imperative is to learn from it.

“In the short term, people should be making sure that their fulfillment chains are robust and not reliant on Amazon,” he added. “And then I think that omnichannel is absolutely vital to this. Focus on customer engagement. Meet customers where they are, and that’s going to be online — so online, app and then [emerging technologies, like] VR and AR.

“They have to get their omnichannel experience working. They have to get the data between their web, their mobile and their physical stores and sync them. That’s what they should be doing.”

load comments
blog comments powered by Disqus