Retail

The Importance Of Embracing Retail’s Gig Economy

The Importance Of Embracing Retail’s Gig Economy

When the digital economy started to reduce jobs in some areas and create them in others, a more robust “gig economy” developed. All of a sudden, it seemed, being a free agent was cool. Side hustles were in. Uber drivers were freelance writers. Freelance writers were Starbucks baristas. And Starbucks baristas worked somewhere else part-time. The actionable change was that one job was no longer enough. The workforce became multidimensional.

Now that the digital shift is underway in a big way, retailers need to enter a new kind of gig economy. Call it “gig retailing.” The actionable change here is that no retailer can go back to a singular dimension, just as a freelancer caught in the digital headlights can’t go back to one job. Aside from TJ Maxx, a single brick-and-mortar dimension won’t work. And unless it’s Purple Carrot or Birch Box, a one-dimensional eCommerce model won’t be enough, either. Retailers need to have side hustles to support their main businesses.

Additionally, retailers need to be data scientists – and if that’s not possible, they at least must be keen data observers. The unprecedented speed and scale of the pandemic has produced an unprecedented rate of change at the consumer level. A good example of this can help can be seen in the last PYMNTS COVID-19 tracker. Any retailers who followed the early research could see that consumers weren’t waiting for a decent face mask to get back to shopping – they were waiting for a vaccine. At that point, retailers should have known that any kind of return to pre-pandemic shopping habits was far off, and not very stable. But at least they knew that cleanliness and safety had become key retail success drivers.

Now, more change is afoot from the consumer side, and retailers of all sizes and stripes need to stay close to it. This change is in the form of a digital shift, which looked like a runaway train when the pandemic started to take hold. Early May data from PYMNTS indicated that 42 percent of U.S. consumers had transitioned to using digital channels to engage in activities more often than they did before the pandemic, while 58 percent had not.

But the digital transition appears to be fairly sticky for those who made the switch. The data indicated that the majority of those who had brought their pre-pandemic routines online plan to keep them there even after the crisis ends. Online capacity and advanced capability have gone from the “to do” list to the “do or die” list. The data can be interpreted, but it always tells a story.

And data, which was once the motherlode of the business, has become scarce. There are fewer overall sales than in recent decades – and those sales are fitting into different categories, rendering traditional demographic segments moot.

“What this change means is that many retailers – independent or chain, brick-and-mortar or eCommerce, startup or legacy – are now facing an information deficit,” says a report in Harvard Business Review. “That’s what happens when the data and intelligence derived from customer transactions becomes scarce or unusable due to a sudden change in buyer behavior. Today, the problem is widespread: Even businesses that had amassed great volumes of customer data before COVID-19 are finding themselves in the same cold-start position as businesses venturing into unknown markets or reaching out to new audiences.”

They also need to become event creators and promoters. If there’s an untried tactic for the battered department store sector within the pandemic, it’s experiential marketing. It’s hard to have an event at Macy’s when shoppers have to stand six feet apart – but even experiential retail has changed. Shopping by appointment, which is gaining momentum in the fashion space, can be an experience – as can eCommerce, as demonstrated by the spike in live streaming in almost every country outside the U.S. China’s live-streaming eCommerce sector generated $61 billion in 2019, according to a report from iiMedia Research Group, and is expected to double to $136 billion in 2020 – all due to the pandemic. Yet it has been used only sparingly in the States.

The intent is to find as many ways as possible to create positive interactions with consumers and keep trying to capture the shift to “Digital 3.0.” That will require a gig attitude and a decidedly different way of thinking.

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New PYMNTS Study: Subscription Commerce Conversion Index – July 2020 

Staying home 24/7 has consumers turning to subscription services for both entertainment and their day-to-day needs. While that’s a great opportunity for providers, it also presents a challenge — 27.4 million consumers are looking to cancel their subscriptions because of friction and cost concerns. In the latest Subscription Commerce Conversion Index, PYMNTS reveals the five key features that can help companies keep subscribers loyal despite today’s challenging economic times.

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