The onset of COVID-19 and the lockdowns that came with them were supposed to be temporary, but the pandemic might have created permanent change for retail shopping.
Although increasing numbers of people were shopping online prior to the outbreak, the stay-at-home order caused the pace of this trend to accelerate, with a 146% growth in online retail orders as of April 21, 2020, compared to April 21, 2019. This trend indicates that any go-to market strategy should involve a large online shopping component.
Since there is not yet a vaccine for COVID-19 and a cure is far on the horizon, social distancing may continue, at least to some extent on a voluntary basis. An April 2020 Morning Consult study found that 24% of consumers said they would not feel comfortable shopping in a mall for the next six months and only 16% indicated they would be willing to return to the mall within the following three months. With numbers of infected rising to record levels in many areas of the U.S., online retail may soon become the default option. Social distancing will make online shopping the new normal.
There are many strategies retailers can implement to not only weather the COVID-19 storm but to thrive in an uncertain environment. Using AI solutions to increase efficiency in the supply chain and inventory and implementing a data-driven approach to reach customers are essential for success as more consumers shop at home.
Supply Chain & AI
One lesson many companies learned through the COVID-19 crisis is how vulnerable their supply chains are to disruptions. This is particularly true for companies that depend on China to manufacture items. Because of illness, absenteeism, and stay at home orders around the world, supply slowed down dramatically in many areas, and orders were delayed or not filled. Companies have had to focus on dealing with sudden demand impact, look for logistical solutions, and communicate with customers about disruptions.
AI is providing solutions for supply change problems by going beyond merely analyzing data, bu actually tracking suppliers, picking up on potential supply disruptions and providing alternatives. In addition, AI technology can maintain factories during labor shortages and predict demand. In some cases, it may be possible to monitor operations remotely through artificial intelligence without having to deploy engineers onsite. This smart technology will keep the supply chain running and keep up with increasing demand.
There are a number of AI applications that can make the supply chain more efficient. Chatbots can deal with routine communication with suppliers and automatically make purchasing requests. In addition, the technology can be used to file and send documents. Machine learning can also assist with planning how many items are needed. When working with overseas suppliers, AI can translate and clarify documents to speed up communication.
Shopping Behavior and Social Shopping
A number of retailers used the on-site shop as a showcase for the customer, even those who may make purchases online at a later date. However, COVID-19 might have changed the in-store experience. There is a great deal of uncertainty surrounding the future of retail in the atmosphere of the pandemic. It may be that browsing, touching items, and having a full sensory experience inside a shop may change as people become wary of venturing to the mall.
eCommerce sites have to adapt and re-create the browsing experience online. Finding out what customers enjoy in their shopping experience and what products they want to see can be determined by utilizing the voice of consumer data for eCommerce. An increase in videos and images can give visitors to the site a clearer idea of what merchandise is available. Web cameras can recreate the experience of trying clothes or jewelry on. In addition, video demonstrations of products on websites can give visitors a realistic experience. Online assistants can help recreate the feeling of being in a physical store through interaction with audio and video. These solutions will revolutionize omnichannel shopping in the post-COVID-19 world.
Inventory & Big Data
Maintaining inventory during the COVID-19 crisis has been yet another challenge. The failure to keep inventory current can cause customers to switch brands or stores. During the crisis, shortfalls in staffing because of stay-at-home orders caused many companies to fall behind in managing their merchandise. Although the supply chain delays are likely to recover as people return to work, the uncertainty of the path of the pandemic requires new solutions for inventory management.
The way to deal with this problem is through data-driven solutions and use artificial intelligence. Algorithms can be used to track trends in sales and shipments and identify lapses in inventory. Pinpointing inventory gaps efficiently can enable the implementation of solutions without any delays that can compromise sales. Data can also identify “phantom inventory” or errors that have crept into the system of tracking merchandise that may be hard to detect through conventional means. In addition, data can help companies forecast potential sales and decide on how much merchandise they will need.
Machine learning can keep track of inventory in real-time. In addition, AI can predict demand based on timing, current conditions and trends. Choosing the right demand prediction system powered by AI ensures inventory will be maintained at the optimum level. AI can also discover the most efficient and cost-effective ways to move merchandise from the warehouse to the store.
Retail Going Forward
Although there is uncertainty about what lies ahead for retail in the post-COVID-19 world, it is likely that the retail trends that were heading online before the pandemic are likely to continue. Smart, data-driven solutions to maintaining inventory and dealing with supply chain issues will continue to develop. AI and machine learning can play a significant role in expediting supply chain and inventory tasks. Since there are some who will be hesitant to return to the mall in the next few months to a year, the experience of the store can be translated online through video, cameras, and data-driven solutions to replicate the service and aesthetics customers enjoy in a physical store. Updating systems is essential to remain relevant in an environment where the retail world is changing rapidly.