Given that 2020 was – to say the least – different, we thought we’d make our latest Retail & Consumer Journal different, too.
The COVID-19 pandemic triggered some of the most sudden changes ever in the retail and consumer goods industries. Demand for food and drinks shifted towards at-home consumption and the food retail channel – and away from cafés, bars, and restaurants. Many of the retail and consumer sectors more affected by lockdowns and social distancing measures faced very challenging economics and had to find new ways to engage remotely with customers. These trends triggered surges in home delivery and direct-to-consumer businesses.
Amid such upheavals, it is no longer enough just to make incremental improvements and try harder. Instead, leadership faces big questions over both immediate actions and fundamental strategy. To hear directly about the challenges, opportunities, and solutions, we interviewed senior executives in Asia, Europe, and the Americas, working in segments ranging from consumer electronics to beauty to food.
They told us that many of the changes have been accelerations of digital transformations that were already underway. Take health and beauty: Sales were already migrating online, but as stores were forced to close during the pandemic, digital orders doubled or even tripled in some markets. Those retailers and brands that had already invested in online tools and interfaces such as virtual beauty advisers were better positioned thanks to the foundations put in place beforehand.
Other segments have seen a sudden, unexpected tailwind, not only in volume but also in customer perception. Many supermarkets and food producers had been increasingly seen by shoppers as commodities, but the pandemic turned them into pillars of their communities. They provided lifelines to vulnerable people at a time of difficulty, and staff in some locations were greeted by rounds of applause. Food stores are now figuring out the optimal combination of in-store shopping, delivery services, and click-and-collect.
In all consumer businesses, the boom in online sales has led companies to rethink their interactions with customers. That can mean new digital tools or a differentiation of store types, from flagship centers to pickup points.
In these ways, the pandemic is acting as a catalyst for major, lasting changes, and consumers are now looking to see which companies best respond to their needs in a new digital era. Real leadership is especially important in this context: Companies that have taken smart and consequential decisions quickly are gaining trust and share.
Before 2020, many of these challenges were seen as tasks for the future. Now, that future has firmly arrived, faster than anyone had expected – and there is no going back.