The line — however slim — that existed between in-store and online retail experiences was eliminated during the COVID-19 pandemic. Initially, consumers shopped online because there was no alternative. While disappointed by shop closures, people had little choice but to shop online, even the laggards.
But then something interesting happened.
Even as restrictions eased and states lifted quarantines, people continued to shop online because it was safer — and easier. Those who may have been late adopters recognized what Gen Z already knew: there’s a convenience and simplicity to online shopping that in-store experiences can’t replicate, starting with never having to leave the house.
By June 2021, when asked to consider the ways in which COVID-19 restrictions had influenced their consumer behavior, over half of respondents in a PwC survey said they had become more digital. Ecommerce was no longer a temporary solution, but rather the predominant way consumers shopped. The retail industry will be forever changed as a result.
Needless to say, the resulting explosive growth in ecommerce sales is unlike anything we’ve seen before. According to eMarketer, U.S. ecommerce sales are expected to grow 17.9% this year, a forecast that jumped 4% in six months to reach $933.30 billion. The firm predicts ecommerce will surpass 20% of retail sales by 2024.
Digital Experience Is Now the Differentiator for Customers
For retailers that were slow to adapt to digital, COVID-19 was a forcing mechanism. Stores closed overnight, leaving even the most prepared retailers scrambling to make sure they had the online inventory to stand up digital storefronts and handle the onslaught of digital customers.
Retailers, accustomed to playing on the margins, were facing unprecedented timeframes and enormous ramifications for their businesses. According to McKinsey, companies acted 27 times faster to meet increasing customer demand for online purchasing and services than they would have done before the COVID-19 crisis. In other words, companies took 22 days to implement changes that previously would have taken them 20 months.
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Creating Digital Experiences Beyond Ecommerce
As ecommerce continues to grow, so too does the availability of other digital retail experiences. Retailers need to up their game because the digitally native shoppers of Gen Z expect more from digital experiences.
Gen Z spends more time online than any previous generation. They’ve grown up with mobile devices, handheld video games and streaming media. Adobe found Gen Zs spend 10.6 hours engaging with online content per day. Half of Gen Zs even use multiple devices at the same time, engaging with laptop, mobile and smart devices as part of a single activity. Technology is the fabric of their everyday lives.
Given this, retailers must reach beyond ecommerce when creating digital retail experiences. Despite the obvious challenges of monitoring multiple digital assets, being able to connect with an increasing number of customers online is a game-changer for retailers. Companies like Wayfair already leverage virtual reality (VR) technology so consumers can see how furniture would look in their house — but there’s more on the horizon.
Nike is another brand that understands the value of in-store innovation on sales. The company is exploring new methods of direct to consumer sales in a new Paris store with hopeful signs for the future. Despite the pandemic-related decrease in foot traffic, its digital tools for employees had a 75% conversion rate.
The message is clear: we have entered the age of “phygital” shopping, in which digital enhances the in-store shopping experience.
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Inge has been designing and testing web, mobile, voice and multi-channel experiences for more than 20 years. She builds and leads UX teams and evangelizes customer experience principles throughout organizations.