How COVID-19 pandemic, Amazon made retailers fundamentally stronger | ZDNet

Retailers in 2019 were on a slow march toward becoming irrelevant, roadkill for Amazon and digital wannabes if they were lucky.

Then the COVID-19 pandemic hit in 2020, brick and mortar retail stores closed with the exception of a few players such as Walmart, Target, supermarkets, Home Depot and Lowe’s. Suddenly, digital transformation efforts looked a bit more pressing.

Digital sales surged, delivery models emerged, and curbside pickup and store fulfillment became omnichannel staples amid stay-at-home orders.

Fast forward to today and retailers are in a fundamentally different place. This retail environment is about being digital, delivering unified experiences, leveraging smart analytics, building on cloud infrastructure, and putting up a real fight against Amazon. Hell, even foot traffic has returned to bolster already heady digital sales.

The latest batch of retail earnings have highlighted the transformation that’s occurred in the retail industry. What has emerged is a  transformation playbook and model for further technology investment. Here’s how it happened.

Technology spending accelerated because retailers had no choice. Yes, there were a few retailers who were thinking ahead. Target’s purchase of Shipt for instance made it look like the company had a crystal ball. Walmart was heavy into e-commerce before COVID-19 hit. But debt-ridden retailers trying to slow-walk digital transformation stepped on the gas.

Let’s hear the retail CEOs tell the tale. Jeffrey Gennette, CEO of Macy’s, said on the company’s second-quarter earnings conference call:

Our results in the quarter were strong across Macy’s, Inc. as many people return to in-person shopping while still continuing to shop online. From off-price to luxury, we are emerging from the pandemic a stronger company than we were before it began.

In the second quarter, we attracted nearly 5 million new customers to Macy’s, which is a 30% improvement versus 2019. Average customer spend in the quarter was up 10% compared to 2019 and up 2 points compared to the trend in Q1 of 2021.

Edward Stack, executive chairman and chief merchandising officer for Dick’s Sporting Goods, said on the company’s earnings call:

We said 2021 was going to be the most transformational year in our company’s history, and so far, it certainly has been. The investments we’ve made in technology, infrastructure, space allocation and our team over the past 4-plus years are now paying off.

Best Buy CEO Corie Barry

Corie Barry, CEO of Best Buy, said: “Over the longer term, we are fundamentally in a stronger position than we expected to be in just 2 years ago.” Barry could have been talking about much of the retail sector.

Omnichannel went from nice to have to necessary to survive. Target has become an omnichannel poster company as has Walmart. Target CEO Brian Cornell said the transformation that accelerated in 2020 is just starting.

Guests have emerged from a year in which digital was the primary growth driver, and they’re now returning to our stores in droves. As a result, the majority of our second quarter growth was driven by the stores channel, where comps grew 8.7% on top of 10.9% a year ago. In addition, traffic accounted for more than 100% of our second quarter growth, in contrast to a year ago when guests were limiting time out of their homes and the bulk of our growth was coming from bigger transactions.

Comparable digital sales grew 10% in the second quarter, building on the record growth of 195% last year.

He added that in-store pickup such as its Drive Up service and Shipt account for more than half of its digital sales. “Among those same-day options, Drive Up has quickly grown to be the largest, accounting for more sales than pickup and Shipt combined,” he said.

Walmart CEO Doug McMillon said:

There are occasions when people want to visit a store, times when they want to pick up and times when they want to have it delivered. We’re going to keep innovating and executing to get better at all 3 as our diversified omni model positions us well to gain share in high-growth markets around the world.

Retailers got smarter about data science and analytics. What makes Amazon so formidable? The company has a treasure trove of data to feed models to entice you to shop, subscribe and leverage services.

02-hobart-lauren.jpg

Dick’s Sporting Goods CEO Lauren Hobart

Dick’s Sporting Goods CEO Lauren Hobart said the retailer is using data to offer more personalized promotions via its ScoreCard loyalty program. Hobart said a big pillar for the company is increasing its database of athletes–the core customer of Dick’s. Hobart said it added 8.5 million athletes to its database in 2020 and 2 million in the most recent quarter. She said:

We have an extensive data science capability, a personalized marketing capability, and we are actively keeping those people in our ecosystem. The omnichannel athlete does have other options. We are capturing data from every single athlete who transact with us in every way, so we are always working to try to get people to convert the ScoreCard. But even when they’re not, we’ve said our active database member is over 30 million active e-mail addresses that we can speak with even if they don’t join the program.

Best Buy CEO Barry said the company is leveraging data to predict buying intent as well as train workers to offer better service and increase Net Promoter Scores (NPS).

Retailers understand it’s a mobile-first customer. “We continue to improve our online shopping experience. This includes our strategy to lead with mobile, which for the first half of 2021, represented over 50% of our online sales as well as faster delivery times and an enhanced shopping and checkout experience,” said Hobart.

Target has added a feature called School List Assist to enable partners to find supplies and buy a list with a click. Another feature, internally known as “promo FOMO”, will show Target offers before checking out.

And Best Buy is working on mobile app checkout.

Retailers learned technology investment is now critical to an enduring model.

Macy’s Gennette said the company’s recent operating leverage will enable it to continue to invest in the business.

We also want to maintain a best-in-class digital experience as we continue to make investments in foundational improvements to keep our online platform current and differentiated digital experiences that provide greater service, discovery and value for our customers. We made advancements in enterprise-wide data and analytics capabilities to improve inventory placement, pickup and delivery options, boosting speed and convenience for online orders.

Walmart’s McMillon said the company is investing in technologies that can scale into new businesses across the company. “More than 30 applications across five countries are leveraging cloud-powered checkout for retail transactions. Things like building a 360-view of the customer using machine learning are important for our business in the U.S., but it’s also important in other markets. That’s why we’re now leveraging this technology in Mexico and in Central America,” said McMillon.

Target’s John Mulligan, chief operating officer, said he’s an engineer by training and the bet is that the company can leverage automation to augment the productivity of its employees. Mulligan said:

When our team works to optimize Target’s operations, both for today and in the future, we have access to every available tool and technology, robotics, automation, machine learning, artificial intelligence and more. But when we choose to invest in technology, we’re not looking to remove the human element from the Target experience. Instead, we’re investing to enhance the productivity of our team members, freeing them up to focus on what’s most important, like serving our guests.

This is another example of the power of “and”, and how it runs through every part of our business. The choice doesn’t have to be about people or technology. We can invest in both people and their productivity.

For all the latest Technology News Click Here 

 For the latest news and updates, follow us on Google News

Read original article here

Denial of responsibility! TechNewsBoy.com is an automatic aggregator around the global media. All the content are available free on Internet. We have just arranged it in one platform for educational purpose only. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials on our website, please contact us by email – [email protected]. The content will be deleted within 24 hours.