How Retail Has Embraced Innovation During the Pandemic

“Business as Usual” ended with the start of lockdowns. Retailers who had to close doors saw sales and profits fall immediately and in food and beverage categories, supply chain demand was difficult to meet. However, as Prof. Haught-Tromp’s research into constraints and creativity concluded, constraints “help cut down the number of choices to subsets that we find manageable. This allows us to explore less familiar paths, to diverge in previously unknown directions.”

The Impact of Constraints on Creativity

When there are no constraints on the creative process, people follow the path-of-least-resistance, the most intuitive idea, rather than investing in the development of better ideas. Constraint provides focus and a creative challenge that motivates people to search for and connect information from different sources to generate novel ideas for new products, services, or business processes. Lockdowns imposed unexpected and dramatic constraints: closing ports, stores, restaurants and warehouses; and locking customers in their homes. Therein we find an interesting sub-story: Constraint has driven innovation.

Adapting to a Changing Landscape

The retail industry is constantly evolving, driven by changing customer preferences, technological advancements, and economic shifts. One major trend in the retail industry is the shift towards online shopping. The volume of consumers shopping online has increased by 28% since the start of lockdowns. Retailers raced to enable this, and our sector has reinvented, re-engineered and innovated at an exhilarating pace. Examples of this rapid adaptation include:

• Majestic Wine: Responded by expanding their fleet of delivery vehicles, converting stores into ‘mini-warehouses’, refocussing colleagues on order fulfilment and delivery and re-inventing their range.
• Gap Inc: Focussing on the needs of consumers, Gap rapidly converted factories to produce masks which they sold to businesses and governments. In the last quarter, mask sales topped $130m.
• Luxury group Chalhoub: By June, they’d launched more than 12 new websites and shifted associates into warehouses to fulfil orders. They hit their 2025 e-commerce target in just one month.
• Walmart: Launched a new membership program, Walmart+, and an app that supports self-scanning, store navigation and contactless payment.
• Waitrose: Teamed up with Deliveroo to provide rapid delivery as 77% of Waitrose customers shop online, compared with 61% last year.

Key Performance Indicators and Market Growth

The following table summarizes the impact of innovation and shifting consumer behavior on various retail entities during the pandemic period:

5 Crucial Retail Store Innovation Ideas

Embracing innovation is not just a choice but a necessity for retailers. To stay ahead in this dynamic landscape, retailers must understand the changing trends and adapt their strategies accordingly to meet the evolving needs of their customers.

1. Use Augmented Reality

Augmented reality blends what you see with your eyes in real life with data so that you see both at the same time. With augmented reality, you can give your customers a fore-taste of what your product will look like when they buy it. It is immersive; your customers can ‘try on’ your products to see how it feels without being pressured to buy.

2. Employ Interactivity

Interactivity makes shopping in your store a delight to your customers. They engage your customers and give them a little something to look at or interact with while they shop. In-store interactive additions help to serve, inform, and engage customers.

3. Get Rid Of Checkouts

We all know that most queues you find in stores happen at the checkout point. Your customers hate the queue, whether they say it or not. Therefore, if you get rid of the checkout point, you will improve your customer experience dramatically. You can allow your customers pay using an app that deducts the money from their bank account after their purchase.

4. Virtual Reality

Smart retailers are using virtual reality to solve the problem of long fitting room lines by creating virtual changing or fitting rooms. Virtual fitting rooms help the customers see how the items look and fit without actually buying it first. This helps eliminate long queues and improve customer shopping experience.

5. Tracking Offline and Online History

Some customers may want to check to see if a certain item is available before visiting your store to shop. To make this easy, you can build a platform online that would help notify customers when a certain item is in stock. This could also be installed as an in-store terminal where customers can go to check availability.

The Role of Technology and Trust

VC investment in retail tech dropped in the first half, but we have seen technology innovation and adoption increase. Mishipay, an app that allows customers to use smartphones to “scan, pay, disable a security tag and go,” had a sharp upturn. Furthermore, the increased appetite for private data and growing reliance on online shopping is driving the need for ‘trust-intensity’ in the retail sector.

Trust is quickly becoming a new dimension for retailers to consider when expanding offerings and services. Competing on trust is an emerging feature for brands vying to provide unique value for customers. Designing trust into digital systems can move beyond current risk management strategies to be tailored toward customer engagement. In the future we will see a move to what is known as extreme trust and provide products and services suited to the customer.