by Jia-Jheng Yeh
Recently, the world has been affected by the COVID-19 pandemic and there has been social distancing under regulations, which not only affects consumer behavior but also poses challenges to the way retail businesses reach out to consumers. The world is marching toward the era of future supermarkets and smart retail, where AI technology can be used in upgrading measures for sales, procurement, storage, distribution, and space allocation.
Pandemic- The catalyst for the development of smart retail
Smart retail features using the Internet and Internet of Things (IoT) to predict consumer behavior and the trends in the market with a view to manufacturing diverse products for consumers. Due to the COVID-19 pandemic, the retail industry has become one of the most competitive consumer markets in the world. Retailers that rely on brick and mortar stores are hit hardest, while the transaction volume of online stores has continued to increase and attract even more customers. Under this circumstance, many retailers have no choice but to re-examine their business models.
Changes made in the retail industry in response to the pandemic
In addition to social distancing, panic consumption, supermarket shelves being swept empty, and people not being able to buy even a pack of toilet paper, some supermarkets have launched “happy hours exclusive for the elderly.” For instance, several supermarket brands with Surewell Fresh Supermarket and Whole Foods Market as the major players have decided to open one hour before the regular opening hour every day for the elderly over 60 years old, as all products are sure to be in stock.
Brick and mortar supermarkets are swept empty, and the website of online stores are crashed by high volume of visitors. Due to the government’s regulation to restrict people’s movement, Ocado, a British online supermarket, faced a massive influx of visitors to purchase grocery, which caused online orders to increase by hundreds of times all of a sudden. Ocado was forced to stop taking new orders and had to come up with a new system- “Virtual Queuing”, where customers living in the same neighborhood have to share the quota of shipment, so that the high volume of visitors can be equally distributed online.
The era of smart retail welcomed with diversified digital marketing
As smart retail becomes prevalent around the world, retailers are making use of channels, both online and physical, to optimize product management as well as warehousing and logistics to increase the operation efficiency. Also, companies adopt all kinds of various innovative technologies, including big data, AI, mobile payment, or mobile applications to draft plans for future development.
At present, many companies use live streaming to sell their products. Some even have influencers on YouTube or executives within the company to introduce products via live streaming to interact more with consumers in real time and to increase visitor volume online.
Difficulties can bring challenges as well as opportunities. Although many retailers are facing cash flow problems and have no choice but to go through transformation, new sales models can still be built as long as companies develop diversified models and continue to explore investment opportunities.