The Reinvention of Shopping

Image credit: iStockphoto/max-kegfire

One of the most noticeable things about going into shopping centers during the COVID-19 lockdowns has been the thin crowds. But according to retail analysts, that doesn’t mean that some of the shops are not thriving.

Anastasia Lloyd-Wallis, the general manager of Consumer Insights & Analysis at the Retail Doctor Group in Sydney, told a webinar last week that even though store foot traffic is down, “conversions” are up. It is because customers have been using digital channels to do their homework first.

“Consumers are entering a physical store, and they have already decided what they are going to buy,” Lloyd-Wallis told the webinar, entitled “Pandemic and Beyond: Digital Transformation and the Future Consumer.”

“These customers are educated. They know what they want, and they are going out to make these purchases.”

Lloyd-Wallis said the pandemic has seen a “massive shift” in the way customers think and approach retail. Retailers have responded by increasing investment in e-commerce and particularly in mobile commerce.

The retail industry had moved “five years in the last six months” to embrace digitization.

“We are seeing this digital education across all of the demographics,” she said.

“We are seeing customers who would normally never purchase online now purchasing products and sectors you wouldn’t previously see online really going strong. You can buy a car online, which is something you wouldn’t have thought about six months ago before COVID.”

Older consumers were increasingly embracing e-commerce, beginning with smaller purchases, which helped build their trust and confidence in its security and reliability.

Conversion wars

One significant trend among retailers in Australia, said Lloyd-Wallis, is the move to “click and collect” services, where consumers purchase online and pick up at a designated station within the store.

One in five Australian consumers had used click and collect services, and the trend’s acceleration would only continue.

“Retailers are really having to go that extra mile through fulfillment,” said Lloyd-Wallis.

“You can order your takeaway dinner, for example, and put it up at the train station on your way home through a parcel locker, and we are only going to see more of this trend.”

From luxury goods retailer L’Oréal, media director Lyndall Campher said the pandemic has seen the company switch its advertising focus from brand awareness to “conversion across the board.”

While L’Oréal used direct to consumer e-commerce for its luxury brands, this had been rolled out to its more mass-market brands during the pandemic.

“So, we definitely pivoted to e-commerce and are increasing the number of our direct to consumer sites in Australia from four or five currently to 10 or 12 by this time next year,” said Campher.

The webinar was sponsored by Snap Australia, the parent company of social media platform Snapchat.

Dental company HiSmile is a major advertiser on Snapchat in Australia, and the company’s Justin Gaggino told the webinar they had “doubled down” on this advertising channel during COVID.

Generation Z was a significant target market, and they were not only big users of Snapchat but also accessed it via mobile.

“Ninety-five percent of our traffic and conversion is via mobile,” Gaggino said.

“For convenience and frictionless experience, mobile has been a gamechanger, and I see us doubling down on that again.”

He said HiSmile was moving towards a personalized and tailored marketing style, where the marketing engine could tell if a person was a customer or had visited the site without proceeding to checkout.

“And once we understand that we might give them a different experience than another customer who is a regular.”

AR matures

The webinar also discussed augmented reality and how it was increasingly being used to deliver an experience to consumers who could not visit stores during the pandemic.

Snap’s general manager Kathryn Carter said augmented reality started off as a “branding experience,” but had progressed to being a part of the “direct response” with a link through to purchasing.

“People are not just after product; they want to understand the brand experience, and augmented reality is a great tool to bridge that,” she said.

L’Oréal, for example, is now using augmented reality, enabling customers to try on make-up, clothes, and shoes without leaving their homes or actually changing clothes.

The Retail Doctor’s Anastasia Lloyd-Wallis said augmented reality had begun with high-value products, but its use was now proliferating down to lower value categories.

“With Amazon, you can now test out several products and put them in your house through augmented reality,” she said.

“It is a digital way to give consumers the trust in the brand and the confidence they have made the right purchase.”

Image credit: iStockphoto/max-kegfire