To survive or not to survive – that is the retail question

Marco de Vries, CEO, Openbravo

Retail has traditionally been one of the fastest-changing industries. However, the pandemic has accelerated this change at an unprecedented rate, driven among other aspects by an exponential growth in online sales.

In 2020, according to Statista and based on data from the US Census Bureau, online sales in the US reached 14 per cent of total retail sales, or $792 billion in value. In 2015, that figure was just 7.3 per cent, showing how rapidly online has accelerated in recent years and in 2020 in particular.

This rapid shift towards online shopping, with the emergence of new consumer habits and preferences, and the need for new services heavily influenced by social distancing, have forced retailers to review and adapt their operations in a very short time. The traditional resistance of many retailers to change and innovate has been put in second place, as they realise they face an entirely new situation that has put the survival of their businesses at risk.

Among these changes is omnichannel, which has become an absolute priority, confirming a need that already existed before the pandemic, but is now much more urgent. In this new omnichannel reality, physical stores face new scenarios that force them to acquire new capabilities. Perhaps the most important challenge is the obligation to develop a totally new role as logistics centres for order preparation.

Businesses also need to offer new shopping experiences, at a time when both the number of store visits and the time buyers spend in stores has fallen. All of this is also influenced by the impact of social distancing caused by the pandemic, which has given rise to new practices that will likely remain for some time. This has pushed many retailers to evaluate options such as self-checkout terminals, curbside pickup and other options that enable low-touch in-store scenarios.

In dealing with their customers, retailers are also facing radical changes in their values ​​and priorities. New generations of buyers expect greater environmental responsibility from brands. They expect value sharing and collaboration, and want to be more involved in the creation of new products. Sustainability, customisation, co-design and co-creation are now prominent terms in the retailer lexicon, and have a big impact on retail operations.

All these changes are taking place in an increasingly complex technological environment, with the emergence and incorporation of a greater number of innovations. While offering additional benefits and options for retailers, new technologies increase the complexity of their systems map daily.

Faced with this situation, retailers are forced to replace legacy systems and adopt new technological solutions, which must not only offer broad support for a variety of omnichannel scenarios already proven by other retailers in the market, but also – and critically – offer a level of flexibility not seen to date. This flexibility is needed to ensure faster implementation and introduction of changes in weeks instead of months, and to simplify critical tasks such as integration with other systems.

This will allow rapid evolution and adaptation in the future, with new processes, payment methods and channels, thus supporting the concept of business resilience, which has been widely used in recent months. Your existing legacy systems won’t respond well to these needs. In this situation, there is only one real choice. To paraphrase William Shakespeare, to survive or not to survive, that is the question.

It is no accident that those retailers that recognised early on the need to embrace omnichannel retail have shown the best results during the pandemic, and many retailers whose results have disappointed are in the process of transformation. But those that have done neither face a real risk of disappearing.

Start accelerating your omnichannel journey with Openbravo today!