Retail

Recreating Retail For The Recovery Period

online shopping

Online commerce has soared during the pandemic, prompting retailers of all types and sizes to leverage how they use digital channels to bring back customers while a full return to physical retail remains months away.

For example, upscale retail brand Gucci is reaching out to customers who can’t go to its stores by bringing its stores to customers. The company’s new “Gucci Live” service uses streaming technology to let customers have the same type of in-store experience they’d have a brick-and-mortar store even while shopping online.

Gucci Live lets well-heeled clientele browse a real Gucci boutique virtually, snapping up whatever high-fashion items catch their eyes from the comfort of their couches. A real Gucci sales clerk will hold up items for the remote customer to check out.

Gucci has created Gucci Live by retrofitting a real Gucci 9 store with cameras and high-quality lighting to allow for what the company calls “remote clienteling.” The remote client communicates with the live clerk via a mobile device or laptop messaging.

Gucci is one of a few luxury brands that have seen customers line up outside its physical boutique when they reopened in Paris and other major cities around the world in the past week or two. That reveals the pent-up demand for the company’s unique items.

But given the depth of losses that brands like Gucci have seen, that won’t make up the lost revenue. That’s particularly true because COVID-19 rules are limiting how many consumers can enter a reopened store at a time and how much they can handle merchandise.

Moreover, a considerable swath of the potential customer base lives outside the convenient range of a physical store and are unable or unwilling to arrange a special trip for luxury retail commerce. A streamed in-store shopping experience offers such customers a digital version of the experience.

“The mission of our Gucci 9 global service center is to provide our customers around the world with a direct connection to the Gucci community that is a seamless, always accessible, personalized experience,” Gucci President and CEO Marco Bizzarri said.

Gucci has a handful of so-called “client advisers” stationed at six Gucci 9 centers in New York; Tokyo; Singapore; Sydney, Australia; Shanghai, China; and Florence, Italy. The luxury-goods company represents just one of many retailers who are beginning to rethink their approach as they adjust to a post-pandemic recovery. After all, the emerging new rulebook for retail is creating an in-store experience for consumers that’s less than loveable — temperature checks at the doorway, masked sale staff and limited capacity.

Some merchants are moving inventory outside to create a wider and more comfortable browsing zone for consumers. Contactless payments are also replacing standard physical point-of-sale transactions, using cards, mobile wallets, QR codes and pay-by-app/buy-in-store arrangements.

But the biggest innovations are coming to online retail. For example, Kendra Scott has rolled out augmented-reality functionality on its site so customers can “try on” jewelry virtually before buying it. And home-furnishing brands IKEA and Wayfair had been using augmented reality (AR) before the pandemic, but have expanded those capabilities so shoppers can virtually “insert” more furniture items into photos of their homes.

Beauty brand L’Oréal has also recently rolled out beauty AR lenses for Snap's desktop app, while ASOS added AR to its product pages to give shoppers a simulated view of models wearing the retailer’s products.

ASOS began testing AR in early 2020 with an eye toward making it easier for customers to make product selection by exhibiting how products fit on models. Initially designed as a way to reduce returns, ASOS now looks at AR as a mechanism by which it can prime consumer interest in online shopping while brick-and-mortar retail’s Great Reopening slowly rolls forward.

In-store shopping has been on hold around much of the world for roughly three months, and the effects show dramatically in the numbers. U.S. retail sales fell more than 16 percent in April, although the damage has been far from evenly distributed.

General merchandise sales only fell 14 percent as stores that sell food and other essential items typically remained open. A spike in sales for household goods like toilet paper and cleaning supplies even helped that segment.

By contrast, apparel sales tumbled 89 percent in April, while furniture sales dropped 67 percent and electronics sales fell 65 percent.

Consumers facing fewer stores to go to have by and large converted their shopping to online, according to latest PYMNTS survey of U.S. consumers.

While only 10.3 percent of consumers reported shopping for retail goods online in early March as the pandemic was just beginning, 35.7 percent reported doing so as of May 23.

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NEW PYMNTS STUDY: LEVERAGING THE DIGITAL BANKING SHIFT – SEPTEMBER 2020  

The September 2020 Leveraging The Digital Banking Shift Study, PYMNTS examines consumers’ growing use of online and mobile tools to open and manage accounts as well as the factors that are paramount in building and maintaining trust in the current economic environment. The report is based on a survey of nearly 2,200 account-holding U.S. consumers.

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