by DK Hardware
Even before the confinement, society was ready to make its purchases online. 96.7 percent of internet users searched for information on prices, characteristics, and opinions of products, and 36 percent actually bought online. Art Goldman, DK Hardware’s CFO, shares his thoughts on what worldwide commerce will look like after the pandemic.
How Online Shopping Habits Have Changed
Large distribution chains have been slow in adopting measures and transforming business processes towards digital. This crisis has caught them without the technological duties done and they have not been able to take advantage of the online sales channel to compensate for the loss of income from physical sales. On the other hand, small businesses, producers, and brands have been more agile and adaptive.
A Nielsen study shows that direct-to-consumer businesses have evolved rapidly. The electronic sales channel eliminates the need for intermediaries and enables the identification of market niches and the needs of consumers. However, selling online is not easy: companies must have their processes highly automated and integrated with logistics so that orders are delivered within the agreed deadlines, and customers have a quick and easy returns system.
The over-demand of these days has caused significant delays, which has led to complaints and claims. Although no company is prepared for an unexpected glut, these failures take a toll on consumer confidence.
It is therefore essential to work on improving sales processes and deepen efforts in communication channels to give customers confidence about the products and services purchased online, as well as appropriately showcasing the hot products accordingly, which, in essence, are the products that consumers most trust on your online store, as is the case today with products that support social distancing efforts in physical stores.
Digital Transformation is Essential
In face-to-face sales, the customer is integrated into the company’s sales process, since they are working when they select the items that make up their order, transports them from the shelves to the checkout box, and then takes them to their home. In addition, if they are a regular shopper, they do the process expertly: they know the store shelves and layout well, and they need to make very few inquiries to the shop assistants.
These days, in places where the processes are little digitized, this activity has been carried out by the staff (even from departments not related to sales), in a non-automated process that implies a high cost in labor for the company and reduced margins, even selling at a loss.
Carrying out the digital transformation in commerce will allow:
- A much faster response to changes.
- Improve operational efficiency.
- Automate repetitive or administrative tasks.
- Reduce costs and stocks.
- Produce according to demand.
Which will result in an increase in productivity and competitiveness. In addition, with the data provided by digitization, companies:
- Will better understand the preferences and needs of their customers.
- Will increase the degree of personalization of their products and services.
- Will improve the customer experience, communication, and brand image.
- Will increase the degree of customer satisfaction.
In short, the benefits obtained with the use of these tools make their implementation a necessity for all those companies that want to continue competing in the markets. According to the experts (technological enablers), the points to consider when approaching this process are:
Working with agile methodologies that allow greater communication with the end customer to improve their user experience.
Migrating loyalty cards to mobile applications, digitizing loyalty services, allows to obtain functionalities such as in-store positioning (so social distancing could be controlled), and customer segmentation, which would allow the seller to be more selective in promotions, adapting them depending on the level of consumption or the customer’s profile.
Pricing must be flexible and adapted to demand in real time. Revenue management systems allow users to assign prices with intelligent algorithms that cross information on demand, capacity, channel, competition and/or stocks.
The omnichannel strategy:
Your goal is to make the consumer experience between online and offline channels smooth and frictionless. To do this, each of the customer’s points of contact with the merchant must appear as one.
Integration of the logistics provider in the value chain:
In online sales, speed of delivery and real-time information on the status of the order are essential. Robotization and artificial intelligence help improve these logistics processes.
The user experience:
An attractive design for the online store, with good photos and illustrations, and where the product information is easy to find, conveys confidence in the brand.
The continuous and consistent use of social networks helps to create community between the brand and its users. In addition, socialization is increasingly digital and, if the buyer feels identified with the brand, they will probably want to share their shopping experience with their friends.
Shopping as a Sensory Experience
As the new normal returns, consumers will regain confidence and resume their consumption habits, although now with greater containment of spending due to the economic impact of the pandemic. Physical points of sale and traditional commerce will continue to exist since modern leisure culture is closely related to “shopping.” Of course, the physical store must be able to guarantee the protection of customers.
However, there will be changes in consumer behavior, which will serve as a tractor for the transformation towards the commerce of the future. The commerce of the future will be a hybrid between digital and face-to-face. The consumer will give more importance to the experience, although there will be less contact with the product and the transaction will be made through digital means.
In the digital realm we will see increasingly immersive experiences, which will take advantage of augmented reality (AR) to show what a lamp will look like in the consumer’s home or a new lipstick color on their skin tone. Understanding the post pandemic state of trade will allow businesses to build loyalty and create commitment (engagement), that is, the perception that the brand is the customer’s ally and is ready to meet their consumption needs.
Featured in America’s Best Online Shops 2021 – Newsweek, DK Hardware is one of the largest online home improvement retailers for a variety of hardware manufacturers all over the United States and Canada.