How the Covid-19 pandemic has revolutionised retail
Retail in SA and beyond is finding its feet in a new online landscape
It’s clear that the 2020 Covid-19 pandemic has transformed the world of retail. Within months, a revolution has taken place, constituting big changes to how consumers view cash, shop online, what they expect from retailers, and what they value as part of a positive buying experience.
Before Covid, consumers expected retailers to create seamless customer experiences. This often meant leaning on digital capabilities to create an omnichannel experience by linking different aspects of the customer journey more closely and reducing friction where possible. Some retailers were better at this than others and often reaped the benefits. However, given health concerns, that expectation is quickly becoming a requirement for all retailers, with many rapidly needing to move their operations to online.
That’s a significant data point for retailers, but of course those hard-earned rand will be directed to the best online buying journey money can buy. So, how can retailers ensure they offer the hassle-free e-commerce experience consumers crave, resulting in the revenue to help move the needle on economic recovery? Minimal delivery fees, easy return policies, and the right price point are part of the story, but what else?
Need for frictionless
When you consider cart abandonment, with seven in 10 online shopping carts being relinquished for reasons ranging from security concerns to complicated or inconvenient checkout processes, the concept of frictionless quickly moves from a nice idea to a must-have.
The safety and security of consumer data
Payment security is a critical consideration for consumers, with 64% of South Africans saying a secure checkout experience is fundamental to a good shopping experience. This is a priority for Mastercard, as it’s working to reduce online fraud and protect retailers from data breaches, while ensuring that consumers still enjoy a convenient and hassle-free payment experience. To advance these efforts, Mastercard recently rolled out its patented tokenisation technology across the region. Tokenisation encrypts consumer data by replacing card numbers with digital tokens. This prevents improper usage at any other location and provides additional security for consumers. This, alongside a merchant’s ability to safely protect consumer data, helps to build trust between shoppers and retailers.
Through personalisation, retailers can connect with their audiences, upsell and diversify revenues. The use of artificial intelligence and algorithms can provide a personalised, customised experience that converges physical and online as an optimal way to achieve loyalty and drive sales. Long-term gains await retailers that respond to customer expectations with increased investment in digital capabilities, omnichannel communications and personalised offers.
Loyalty and rewards
Reimagining loyalty is key to turning online customers into return customers, and 62% of South Africans said promotions and loyalty initiatives are parts of a good shopping experience. Pick n Pay has done this successfully through its Smart Shopper loyalty programme. Points are earned for every card swipe or app tap, demonstrating consistent value by indicating savings, offering automatic personalised reward discounts, and providing choice — from earning and spending points, to switching points by donating them to charity.
Secure checkout experience
Online, consumers feel more secure by default — but many consumers are wary of interacting with unfamiliar websites or payment options. This is a cause for concern because retailers don’t want to give consumers pause at the point of sale. Marketplace apps can help in this respect because they provide a familiar checkout experience across multiple retailers. And they’re growing fast.
Social media and market places
Marketplace apps and websites are expected to account for more than 60% of digital commerce by 2023, partly because they provide a steady stream of consumer traffic for retailers while also supporting the credibility of their products or services. However, marketplaces need to support sellers with strong data analytics, optimising their search results and sharing marketing capabilities and other tools to make those relationships mutually rewarding, or risk having sellers leave for other sites.
With fewer opportunities to browse in the stores or on the high street, social media and search engines have emerged as a critical platform for finding the most attractive products and offers, with 64%, 63% and 41% of South Africans saying they had discovered new sellers through Facebook, Google and Instagram respectively.
This is also an opportunity for small-to-medium enterprises (SMEs) to accelerate their digital transformation efforts and offer consumers shopping convenience through various buying platforms.
Though retailers have had a miserable time as lockdowns closed shop doors and stopped footfall in its tracks earlier this year, they’ve also been granted an opportunity: with data-rich and varied insights into how shoppers’ habits are evolving, they can tap into these new behaviours through e-commerce. SA consumer behaviour has evolved and they are shopping in new ways, with 68% of SA respondents in a recent Mastercard study saying they have been shopping more online since the onset of the pandemic.
In support of this digital transformation, Mastercard, Google and Standard Bank have collaborated to help small businesses compete and thrive in today’s digital world, offering them free access to Standard Bank’s SimplyBlu, an all-in-one e-commerce solution powered by Mastercard Payment Gateway Services, plus free Google Ads to the value of R500. With SMEs accounting for almost half of SA’s jobs and a fifth of its GDP, there is no doubt that small businesses and entrepreneurs constitute an important part to the economy.
The impact of the pandemic on small businesses, the retail sector and on the customer experience, is huge and here to stay. For smart shoppers it provides opportunities to get much more out of the shopping experience. For retailers willing and able to adapt, this is a new chance to build market share and create truly memorable experiences — that can evolve into lasting, resilient revenue streams.
About the author: Suzanne Morel is country manager at Mastercard SA.
This article was paid for by Mastercard.
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