COVID -19 has taken a heavy toll on the lives of millions of people in the world. Putting the whole world into a health crisis has paved the way for a huge economic crisis too. The retail consumer sentiment which was already at the low has been further affected by the countrywide lockdown.
The decline in GDP, job loss, financial stability, and future uncertainty has caused a change in the overall behavior of the consumers. These factors can change the way how the consumer will be defining value and affordability in the retails next normal. In this scenario, it is up to the retailers to decide the “retails next normal”. Some perceptions about how retailers can shape the strategies for this new normal is discussed below:
Separate value strategy for the different consumer segment
It is very important for retailers to understand what affordability actually means to their target consumers. For example, there will be a set of consumers who are facing financial pressure, these customers will be highly sensitive to the price of the products and are confused about how to maximize and manage wealth. There is also another set of consumers who are more affluent and maybe less price-sensitive compared to the others. In order to appeal to both these categories, retailers should design their strategies in such a way that it helps drive value perception and push the average price of the products.
Strategize based on geographic locations
From a geographic angle, it can be seen that there are areas that are under complete lockdown and areas which have partial/no lockdown. Therefore, rather than strategizing for the country as a whole strategizing business in a localized should be considered.
There can be competitive responses from various brands like the change in price points, introducing new services (free home delivery), etc. Close attention to new regional dynamics should be given focus.
Building agility
Building agility to respond to the rapidly changing consumer sentiment is needed. This can be done by closely monitoring what the consumer sentiment is at the current time and giving personalized services in order to increase consumer loyalty. Personalized services to consumers can be given my making use of artificial intelligence. Artificial intelligence helps to understand the current purchasing/browsing pattern of consumers by using real-time data.
Complete digital transformation
A complete digital transformation from the manufacturing ecosystem to the final delivery of the products to the consumers is an inevitable change in the future. Retailers can use various digital platforms and new digital technologies to connect with the consumers of their brand. For example Royal Enfield’s Trip story campaign.
