The future of retail is dual-shopping experiences
By ATB Financial 26 February 2021 6 min read
“The pandemic has really accelerated everything digital in retail and I think that's a good thing,” says Manjit Minhas, co-founder of Minhas Brewery and dragon on CBC’s Dragons’ Den. “Before the pandemic, companies were at the cusp of digital but didn’t want to take the leap either because they didn't have the knowledge or thought it was a [financial] burden”.
Minhas—who is a member of ATB’s board of directors—is one of four guests in season two of ATB’s The Future Of Retail podcast, hosted by Todd Hirsch, ATB's chief economist. Each episode invites leaders, experts and business owners to discuss what is shaping physical and online retail spaces. Episode one features Pippa Blair and Neige Blair, founders of Routine Natural Goods, while episode two features Minhas and John Tarnowski, ATB’s executive vice president of Everyday Financial Services, about where they see retail headed after the pandemic and how it will impact consumers.
The whole season explores the future of in-person and online retail in light of COVID-19, including:
- The state of the retail industry
- How the pandemic heightened the need for businesses of all sizes to digitize
- What you should consider as a customer when choosing which retailers to support
- Why retail fundamentals matter in an e-commerce environment
- What business owners should invest in now to stay relevant to customers
- What environmental, social and governance policies mean to customers
- Why the future of retail is dual-shopping experiences
Is the retail industry dying?
The retail industry is not dying, but all the guests agreed it is undergoing a dramatic transformation. A key to being successful through this shift is having both a physical and digital presence for your customers.
Even before the pandemic, you’d be “shooting yourself in the foot” as a retailer if you didn’t have an online presence, say Neige and Pippa Blair in episode one. The founders of the all-natural deodorant and skin care company believe people are changing the way they shop, but many still want a tactile experience.
"To get the attention of customers and consumers, it has to be done differently—and much more creatively. It’s not just a window in a shop anymore."
co-founder, Minhas Brewery
“To get the attention of customers and consumers, it has to be done differently—and much more creatively,” says Minhas. “It’s not just a window in a shop anymore.” Digital spaces mean there are no limits to what retailers can do to attract customers, she argues.
In the same episode, John Tarnowski adds that social media hasn’t contributed to the death of retail, it’s actually made retail shopping a more social experience than ever before. On the surface, online shopping may seem like a solo experience. However there is the opportunity for a customer to get instant feedback from their peers online before purchasing. Businesses have the chance to amplify themselves and their products in this social space.
Is the retail industry growing?
Despite the sudden and dramatic impact of the global pandemic on retail, the industry is growing. The Retail Council of Canada reported in December 2020 that core retail sales in Canada rose 10.66% year-over-year in October 2020. In Alberta, core retail sales rose 9.74% in the same period.
Tarnowski believes that the drive to support local businesses has increased in the pandemic because people want to see their local communities thrive. Both large and small retailers have harnessed opportunities such as partnerships to improve the customer experience as well as increase the potential for sales. It’s also important for retailers to use data to understand what types of experiences their customers want to ensure resources are used to create something that people want.
The fundamentals of retail remain critical to success
As the digital transformation of retail continues, it’s clear from the guests that a few core fundamentals are necessary to be a thriving retail business.
Pippa Blair says even in a world of e-commerce, retail businesses must focus on customer service.
“The number one thing is anytime you have a customer complaint or any email, reply in a timely manner,” she says. “Those negative experiences can be turned positive and [that person] will leave a positive review.”
Blair acknowledges that it can be costly to replace products or pay for shipping. “But it’s so worth it,” she says. “Anyone that contacts you should leave feeling special and feeling heard.”
For Minhas, the fundamental piece of retail that businesses need to focus on is knowing their customer. In the digital age, businesses have data about their customers and products that provide a 360-degree view of the buyer, she says.
“Now this is the time to do this because it really enables [you] to understand and manage [your] operational characteristics,” she says. She also adds her tips in the show for not spreading yourself too thin with all the new technology and tools the digital age has introduced.
Environmental, social and governance matters to consumers
Environmental, social and governance practices—also known as ESG—is important to both consumers and retailers.
In the podcast episodes, all of the guests say retailers must pay attention to these areas of your business because they matter to consumers today and will continue to tomorrow.
In episode one, Neige Blair shares the story behind Routine, which is rooted in a desire to use great products that support ESG principles without sacrificing style and brand. She discusses how new products from Routine will be packaged in bottles made out of ocean waste.
“It might seem small when you’re talking about your shampoo and deodorant, but when you look at the impact of millions and millions of containers by one company being reduced from landfills that impact is huge,” adds Pippa.
Pippa and Neige have also taken this concept one step further and sell their products at zero waste retail locations, including at an Edmonton-based mobile refill company called Ecochicks Mobile Refills. Digital tools like mobile payments have made such retail businesses possible and in demand.
Minhas explains that ESG is not something businesses can ignore. Customers and millennials embrace companies whose values they share. These customers want to know more about where their products are made, what is in the products, the diversity of businesses, and environmental practices.
“It has costs associated with it and some risk in those pillars, but I've never seen a company say that was a mistake that we focused on ESG values,” she says.
The future of retail is experiences
In each episode the guests all weigh in with their predictions on what businesses and consumers can expect next in the industry. All of them say the future of retail is in experiences.
Both Neige and Pippa Blair say people will desire a human experience when shopping, so retail as we know it won’t go away. Instead, shoppers will seek an experience as a reason to leave the house. They also talk about the potential in the online customer service space. An example is using video more frequently to deliver this human experience consistently when online.
Minhas anticipates some shopping experiences will be done by booking a private session to skip waiting in line. At an appointment, you’ll look at products, have one-on-one time with an expert and avoid having to sift through shelves of things to find what you want.
“We still want experiences,” she says. “We want to go out to have an experience that’s none like no other. Companies and entrepreneurs that are going to be the winners are those that will have thought this part out.”
Tarnowski says brands like Sephora are already building out a new kind of dual shopping experience by combining value-added services in store with digital content and loyalty components online. He discusses how in the future, technology like virtual reality is going to dramatically change the entire retail experience.
One thing is certain—retailers of all sizes must remain nimble and creative to navigate both the pandemic and the digital transformation of the industry.