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The effect of COVID-19 lockdown on SA retail

Friday, June 19th, 2020

The economy is slowly opening up after over three months of the national shutdown. But what does the post-pandemic world hold of local retailers and restrictions ease?

 

The changes that the retail industry has gone through during levels 5 to 3 are unprecedented. Remember when toilet paper was out of stock and the liquor shops we closed?

Almost every retail outlet, barring grocery stores and pharmacies, were classified as ‘non-essential during the hard lockdown (level 5), and for 5 weeks had to shut their doors. As masked citizens start to make their ways back to the shops, even sectors that weren’t necessarily not under quarantine are hoping for an increase in foot traffic in retail outlets and malls.

 

However, the ever-cautious consumer has now turned their concern away from being dubious of online shopping, to fearing the outdoors and the danger that lurks beyond their homes.

 

Serve customers differently

Some retailers have seen demand decline as consumer shift channels, while others are facing unprecedented spikes in demand as restrictions ease and everyone flocks online to get what they didn’t have access to for over a month. Because, you know, queuing to get into the shop is such an inconvenience.

 

COVID-19 has fast-tracked the need for digital transformation in retail, highlighting the need to operate and serve customers differently, according to a 2020 report by Deloitte. “Digital transformation has changed customer expectation, choices, demands and rate of change. Retailers can adapt in many of their business functions to make an impact,” says the Consumer Sentiment Report by the firm.

 

Okay, but how?

 

Accelerate e-commerce adoption

Under current circumstances, consumers are more likely to track prices and be more price conscious, leading to the need for transparent pricing strategies and transparent price communication as a retailer. Especially when they can’t touch and feel the product before buying it.

 

“The fastest growing and most dynamic area in South African retail in 2019 was e-commerce. Mobile e-commerce, in particular, has strongly increased over the past year.” – Euromonitor International’s 2020 Digital Consumer Survey.

 

“The coronavirus pandemic will accelerate e-commerce adoption, as many experiment with and even become reliant on the online channel while in isolation,” Michelle Evans, Senior Head of Digital Consumer at Euromonitor International.

 

Focus on customer intimacy

Scientists are predicting that social distancing, in one form or another, may need to happen until 2022, when a vaccine for COVID-19 may not only be available, but effective as well. Your goal during this time is to improve the customer experience, in turn, leading to a higher probability of customer loyalty.

“Doubling down on customer engagement and listening programs can help provide insights on how to best move forward,” says Andrew Reid, founder and CEO, Rival Technologies.

 

Meet customer needs through innovation and agility

Implementing technology can balance loss of earnings during the respective lockdown levels, by giving your customers new ways to connect with your business and vice versa.

 

As of 2019, 13% of goods were bought online globally, up from 6% in 2014, according to Euromonitor International. One of the most profound behavioural changes unfolding in retail is the shift to digital.

 

“Online grocery is in the spotlight. Obtaining groceries without stepping foot into a physical store is crucial for today’s homebound consumers,” says Evans. “While some demand will drop after lockdowns are lifted, many consumers will permanently shift to e-commerce.”

 

Braintree, the consulting and integration division of Vox, is the largest Microsoft Dynamics company in Africa, with over 26 years of successful implementations experience. The company is a leader in retail solutions, e-commerce, customer relationship management, marketing technology, wholesaling and enterprise resource planning. It further has significant consulting and product capability, including Dynamics 365, Azure, Office 365 and Analytics. Braintree has been named as an LS Retail Diamond and LS One Gold Partner for 2020

 

Written by Diana Albertyn – Vox: Senior Content Writer