The global spread of COVID-19 and resulting orders to shelter in place have hit retailers hard.
As the pandemic drags on, temporary halts are becoming permanent closures, whether it’s the coffee shop next door, a historic bar or a well-known lifestyle brand.
But while the present is largely bleak, preparing for the future has retailers adopting technologies faster than ever. Their resilience and innovation means retail will look and fee different when the world reopens.
We gathered four views on the future of retail from the TechCrunch team:
- Natasha Mascarenhas says retailers will need to find new ways to sell aspirational products — and what was once cringe-worthy might now be considered innovative.
- Devin Coldewey sees businesses adopting a slew of creative digital services to prepare for the future and empower them without Amazon’s platform.
- Greg Kumparak thinks the delivery and curbside pickup trends will move from pandemic-essentials to everyday occurrences. He thinks that retailers will need to find new ways to appeal to consumers in a “shopping-by-proxy” world.
- Lucas Matney views a revitalized interest in technology around the checkout process, as retailers look for ways to make the purchasing experience more seamless (and less high-touch).
Alexa, how do I look?
Natasha Mascarenhas
When I first heard about Echo Look, Amazon’s virtual camera and style assistant that tells you if your outfit looks good, I cringed. My former colleague Janelle Nanos, said it well: “But do I trust the device to dress me? I don’t think so. Style, as I see it, is a combination of personal taste, life experience, and real-time emotion. And I don’t trust an algorithm to know me that well.”
That was years ago; today, my colleague Brian Heater broke the news that Echo Look will cease functioning in July.
In most cases, I’d pat myself on the back for being right about an awkward, poorly branded product. Yet, this time around, I disagree with old me and Amazon — the future of retail will depend heavily on products like the Echo Look, which was an effective and creative way for a brand to show consumers that it cared about them. Don’t sunset these out-there products just yet, e-commerce companies.
Aspirational shopping — whether it’s the clothes we buy, cars we drive or virtual try-ons for sneakers — will come back; it already has. The bigger hurdle awaiting retailers is finding unconventional ways to connect with customers in a time where noise is higher than ever. What was cringe-worthy in a pre-COVID world might now be described innovative.
For furniture startups, success might come from investing in virtual staging. For clothing companies, the way to connect might be through virtual styling. If a retail company copycats Echo Look with better branding and improved AI, it could benefit tons of people who are struggling right now.
The next decade of retail will find new and unexpected uses for technology that may have turned our noses up previously. What was once considered a frivolous investment or aspirational purchase might now be the only way some businesses can resonate with a prospective customer.
Buy now, it should be obvious
Devin Coldewey
Retail, both online and brick and mortar, has been in a tough spot for years. The pandemic has only exacerbated existing trends. And make no mistake, the trend has been “Amazon versus all-comers.”
Naturally, this whole event has been a bonanza for Amazon, which can barely keep up with demand. But it has also been a wake-up call for businesses that have had no choice but to fully commit to online retail. This also means a commitment to choosing payment providers, front ends, shipping partners and other middlemen. Shopify and other major providers are collecting new customers, but so are niche upstarts innovating in the market.
Due to the huge uptick in people ordering products of all categories online, small differences in audience targeting, onboarding friction and interface design, among other things, now produce correspondingly larger differences to the bottom line.
I expect a fierce new melee, nearly invisible to consumers, over the means of finding, capturing and monetizing users. This has been going on for years, but the stakes have just been raised enormously.
Over-ambitious platforms like Facebook’s Libra will flounder, but expect a huge increase in the compatibility with mobile-first plays like Instagram’s instant-buy feature. This leverages years of highly accurate targeting and strikes consumers at a moment of weakness. For this reason, you can also expect customized pricing via one-time coupons, partnerships with influencers and brands (10% off if you follow, etc.) and other rich monetization strategies.
Simple, portable payments solutions attached to major platforms, like Apple Pay, will reduce friction to a minimum. This in turn empowers small vendors at the cost of the likes of Amazon, which still generally requires you to go to it to buy things. That monolith will be tough to topple, but small businesses are going to find out that you can live without Amazon’s platform, and in fact it may be preferable.
How to be seen when no one is looking
Greg Kumparak
The pandemic changed the way people shop from retail stores pretty much overnight, but the new habits they’ve adopted — like on-demand delivery and curbside pickup — could very well hang on long after this virus is gone. People who would’ve never given these things a chance are now finding themselves on their fifth, sixth or thirtieth order from afar.
That presents quite the challenge to the brands that fill the shelves: Fewer people entering stores for themselves means fewer serendipitous “wait, what’s that? Let’s try it!” moments.
Instacart has seen an absolutely monstrous uptick in usage — an increase of roughly 450% from December 2019 to April 2020, according to Forbes. That’s a massive swell of users — enough that Instacart had to hire 300,000 shoppers just to keep up.
But those shoppers aren’t there to browse; they’re there to buy what the customer has asked for. Same goes for the in-store employees grabbing items for curbside pickup. They’re (probably) not going to say “I know you asked for Doritos, but I thought maybe you’d want to check out this new brand instead.”
When someone else is doing the shopping, the store becomes less of a marketing opportunity and more of a warehouse.
If shopping-by-proxy continues to grow in popularity, I’d expect a few changes:
- Established brands and products will see an uptick in customer loyalty/retention. Their job becomes less about convincing the customer to stick with them and more about ensuring that if the customer comes asking for Billy’s Fizzpop, Billy’s Fizzpop is on the shelf — lest the out-of-stock replacement algorithm suggests Doctor Jimbo’s Diet Swish instead.
- Newer/smaller brands will start shifting more efforts to alternative ways of getting in front of new customers; samples bundled into food delivery boxes, “Spend $50 and get a free sample of [whatever new product]!” partnership type stuff.
- Apps like Instacart itself will become key marketing platforms. Instacart is fully aware of this, and is moving quickly to become an ad platform. The top Instacart result becomes the new endcap placement. How long before the algorithm’s out-of-stock replacement suggestion becomes the most hotly contested spot?
- Beyond groceries, I’d expect more consumer brands (even the well established ones) to experiment with try-before-you-buy/free returns. Buying a pillow online without being able to prod and punch the grungy in-store model sucks… but if my search for “pillow” turns up five results, the one that promises painless returns is probably going to be my first pick.
One-click ordering for the real world
Lucas Matney
Autonomous checkout tech is too early to make a difference for shoppers in the current pandemic, but as business owners upend their businesses to enable social distancing, there are signs the tech might be ready to make life easier during the next pandemic and the period in between.
The technology theoretically allows shoppers to enter a store and shop as they normally would but skip checkout aisles as cameras in the store chronicle every good that makes it into their cart. The tech has been pioneered by Amazon with their Amazon Go convenience stores, among a few other startups, but the experience still feels experimental.
Amid COVID-19, the tech has a new angle, promoting safe distance between employees and shoppers that’s more robust than a sheet of acrylic plastic. As retailers are forced to comply with state and local regulations, larger retailers might see more advantages in starting to experiment with cashier-less checkout tech that goes beyond the self checkout aisle, leaning on more robust vision platforms to shape how their stores operate in the future.
Autonomous checkout is too capital-intensive to help mom and pop shops, but as top retailers are forced to reshape their businesses in light of COVID-19, there may be more willingness to invest in tech that takes away barriers from purchasing and replicates the seamlessness and data responsiveness. Picking up an item in a store can become the One-Click Ordering of physical retail. Startups like smart grocery cart-maker Caper could leverage hyper-localized knowledge to show you an advertisement when you’re turning the corner to the aisle where that good is located.
Earlier this month I chatted with Standard Cognition CEO Jordan Fisher, who talked about how the autonomous checkout technology his startup is building could have made a big impact in the midst of the pandemic, if only the industry was further along. “It’s unfortunate that the industry is where it’s at today, I wish that we were five years ahead to be much more widely deployed and be able to actually make a major difference on these risk profiles,” Fisher said. “But I think we’re going to be thinking with a COVID mentality for years to come. This is definitely piece of investing for the future to make sure that we’re opening up our retail world in as safe a way as possible.”
That future bit is the most curious. For consumers, the benefits have seemed minimal, but for the businesses involved, there’s a broader long-term opportunity hidden inside an opportunity to protect workers and promote safer social distancing amid COVID-19.
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