As retailers emerge from the COVID-19 pandemic, cloud-based technologies can help them adjust to a changed landscape.
Chain Store Age recently spoke with Tom Litchford, global head of retail at Amazon Web Services (AWS), about steps retailers should be taking now to ensure they thrive in the post-pandemic “new normal.”
How have shopping patterns changed, both online and in-store?
From a human habit perspective, there has been 40% to 60% shift to online traffic, depending on the retail segment. Online traffic represented low-to-mid-teens pre-pandemic. Consumers who hadn’t shopped online before COVID-19 got used to e-commerce, see the value in it, and like using it
On the brick-and-mortar side, there is some consumer hesitancy. Shoppers want to feel safe and want to make sure the retailer or brand they are engaging with is taking health and safety into account. Retailers need to be looking at better organized stores and more efficient traffic patterns, so customers feel safe.
What advantages does cloud-based innovation provide retailers looking to adapt?
Retailers who were already using cloud technology when COVID-19 hit were the most agile during pandemic. They were able to quickly roll out or expand buy-online-pickup-in-store (BOPIS) and curbside services, while others struggled to get there rapidly.
The digital channel is becoming your flagship store. Consumers on your site are now having first their experience with you, via technologies such as voice, Internet, computervision, and augmented reality/virtual reality. Ralph Lauren is putting its physical stores online. Customers can shop the Ralph Lauren Manhattan store in a virtual environment, where visiting the site is like walking through a brick-and-mortar store as opposed to a flat flash site. AWS worked with Obsess to create the virtual 3D store environment.
We are also starting to see a shift to livestream shopping among U.S. retailers. It has been a much bigger phenomenon in Asia for the past several years.
What can retailers do to remove friction from their customer experience?
Retailers can use cloud technology to test and see what works in their customer journey, and then work backwards to remove any friction that exists. You can visualize the customer journey with cloud technology, see friction, and eliminate it.
Retailers can also use customer-facing technology to instrumentize their stores and obtain a real-time data feed to see what’s going on and impacting the shopping experience. For example, Amazon offers frictionless checkout via the Amazon Go experience, we will likely see more of this type of store environment optimization in the future.
As another example, Exxon and Mobil are both removing friction from the experience of filling your gas tank. Typically, the customer gets out of their car with a chip-enabled payment card, waits to establish a connection at the pump interface, provides their ZIP code for approval, unhooks the pump, selects a grade, and finally pumps. There is a new system using Amazon Pay and the Amazon Alexa voice assistant where the store is geofenced. When you’re headed to the store, you tell Alexa, ‘pay for my gas’ and what pump you will be using, unhook, and pump.
Nike is also using geofencing with their mobile app. If a customer is not near a physical Nike store, the app will provide product search. In the store, the app enables customers to interact with products and perform instant checkout – they pick products, let the app know what they’re buying, and walk out.
How can retailers change their technology approach to improve their chances of success?
Retailers need to get out of having a risk-averse mentality. Instead, foster a culture of experimentation. There needs to be more innovation. The popularity of pickup will remain. Gen Z and millennials love picking up online purchases at the store, while boomers want products dropped at their door. The cloud takes complexity out of the process and lets retailers relentlessly remove friction.