Retail IQ - Thought Leadership

The "new normal" is yet to come!

With the pandemic, we were forced to drastically change our lives facing an unknown and unexpected threat and, with this, we proved the inexhaustible capacity of adaptation of the human being. The change was happening, always with a temporary perspective and with the conviction that, in the following months, everything would return to "normality". And so, over the past year, we have been changing habits, behaviors, practices, beliefs and values.

We have adapted our homes, where work, family and leisure now have to coexist. We adapted our work models, which, thanks to the current technological maturity, allowed us to maintain productivity even remotely and, in some cases, even deliver better results. Basically, we have adapted our way of being and proved that it is possible to do it differently without losing the goals of personal and professional success.

However, this is not yet the "new normal". That will come in a post-covid era in which we won't have all the imposed limitations we have now, but in which the new mentalities will definitely remain. It is certain that, considering the path we have taken in the last year, there are certain changes with no going back. So, companies have to rethink their organizations considering these social and behavioral changes. This mandatory stop has caused significant changes in consumer behavior and even in the perception of well-being. The market is different.

A new online consumer has emerged, one that has discovered the convenience of buying over the Internet and that also includes people in older age groups. E-commerce is no longer used only for technology or fashion, but is now indispensable for all categories. And even after the reopening of all the stores, the consumer will not stop buying online, he will combine buying channels and, online, he will no longer accept an average service because he has no alternative. From the ashes of the pandemic will rise an even more aware, more selective and more demanding consumer than ever before.

Therefore, in the "new normal", the positioning of the physical vs. digital channel has to be rethought to meet the demands of this consumer. This involves a redefinition of processes, people and systems, creating a new organization, capable of meeting the challenges of this new reality.

It is no longer conceivable that the online range will be smaller than the one in brick-and-mortar stores. In fact, the expectation will be just the opposite, and in a post-covid era we can expect to see a digitalization of brick-and-mortar stores. This means a change in the physical store experience leveraged by technological advances, as with the expansion of the range virtually, allowing the reduction of physical product display space, and the strengthening of interaction with customers through virtual assistants.

The entire omnichannel strategy has to be reviewed to ensure a consistent brand experience. Retailers have to prepare their organizations to have an equally efficient and complementary response in both physical and digital channels. Just as a separatist view between store A and store B of a given retail chain is no longer acceptable, the customer does not expect distinct experiences between online and brick-and-mortar. Building customer trust and loyalty is really going to come down to the globally delivered experience, dictated by the omni-channel strategy.

The delivery and return service is critical and has to be continuously improved. And even the supply chain itself has to be revised to address the increased volume of private deliveries, changing the relationship between producers and retailers. The relationship with the consumer will continue to be the focus, but will require a strengthening and optimization of communication management, making it more frequent and more personalized.

The "new normal" will be an era of new trends. There will be new business models, new work models, an explosion of new technologies, and the development of new skills and even new professions. And all of this will require new mindsets, both at the management and operational levels to create new organizational cultures.

March 2021  by Sílvia Gomes, Senior Partner - Retail Consult