Retailing Online During Covid and Economic Recession
The impact of Coronavirus will be felt for some time, with economic hardship and continued aversion to crowded spaces. The Global Financial Crisis and SARS outbreak had a lasting impact on customer behaviour - retailers must again plan accordingly.
eCommerce is booming, physical stores are closed, and more people are online. Even as stores start to reopen, their role has changed. Online orders fulfilled from, or picked up, in-store will become the new normal.
Companies that Thrive
Smart businesses are now creating or deepening their footholds. Research proves that Progressive companies that respond to customer needs, by striking a delicate balance between cutting costs on less relevant assets today and by investing intelligently to grow tomorrow, will be the most profitable emerging from recession.
But how can you cut costs and invest in the best way possible, and how can machine learning help?
Changing Your Mindset
The opportunity for online retailers lies in the ability to stock a limitless variety of products. This long-tail of items can drive more than double the sales volume of the best-selling items available in physical stores.
There are three rules to meeting customer needs online during COVID-19 and Economic Recession.
#1 - Make Everything Available
(Item availability, stock availability)
- Pre-Covid 87% of shopping journeys started online, this is now even higher.
- Buy Online, Pick Up In-Store is already up 60% since lockdown began
#2 - Get Smart on Pricing
(Increase sales, cash-on-hand and earnings with intelligent, dynamic pricing)
- Opt for SKU-level pricing intelligence over blanket discounting. Understand item popularity, stock levels, competitor pricing and margin requirements to develop dynamic pricing models.
- Pull customers along the long-tail with lower prices. Long-tail items cost less so you can charge less, while harnessing the downsell opportunity.
#3 - Help Me Find It
(Item discovery and customer satisfaction)
- Especially where the supply chain is constrained, help customers discover alternative items to suit their needs.
In a Nutshell
The GFC, SARS and now trends in COVID-19 equip us with the knowledge to plan ahead and crisis-proof our businesses. Making the most of online will be key to acquiring market share in this downturn. Machine learning can help, identifying where you will see the biggest ROI, accurately and at scale.
Elizabeth Smith is Head of Account Management at Particular Audience, a personalisation platform with Amazonian power and scope.
Particular Audience connects people to relevant information, effortlessly and contextually. We build cutting edge deep learning technology on massive data sets applying computer vision, natural language processing and behavioural collaborative filtering to predict and personalise your experience across the internet.