Retail & COVID-19: two emerging consumer trends & three digital responses (that our clients actually used) Arpita Goala , Content Marketing Manager October 6th, 2020 In a retail industry dictated by consumer trends, COVID-19 has emerged as the greatest change-maker in decades. For online stores and marketplaces, developing new features and services to match these trends is make-or-break. One way to measure a firm’s digital response to change is their app update and testing frequency. Based on analysis of top-30 retail app producers in 2020, our team at Testlio found that industry leaders update their apps 2.54 times per month– that’s more than 83.5% of peers. Digging deeper, apps that test more than three times per month hold an average app store rating of 4.8 out of 5, compared to 4.5 for their less-than-3-times peers. A slight increase in testing correlates to a significant increase – 7% – in customer satisfaction. But what direction is this rapid change taking? We compiled months of coronavirus specific data on changing consumer trends, from firms such as Accenture, Deloitte, and Mckinsey, and compared these trends against our client data from three of the top 15 retail app producers. We discovered two major consumer trends shaping retail, and that world-class retailers are responding in three major ways. Trend 1: Safety As consumers stay home during the pandemic, digital takes precedence as the channel to safety. From Deloitte, 49% of customers are concerned about going to the store. In turn, Accenture reports that 51% of consumers use and expect to continue to use in-app ordering, 45% home delivery, and 41% live chat. Customers who aren’t going to stores seek digital alternatives to safely fulfill their needs. Trend 2: Convenience As consumers prioritize service, digital enables higher levels of convenience. Deloitte estimates that retailers who prioritize convenience (online buying, in-store pick-up, two-day shipping) drove 67% of market growth from 2016 to 2019– even before coronavirus tied convenience and safety intrinsically together. Meanwhile, digital sales drove 75% of growth in retail. This overlap demonstrates that retailers who prioritize convenience are also prioritizing digital, and they are growing rapidly. Adapting to changing consumer behaviors Over the last six months, Testlio’s client base of retail-leaders has launched digital services that promote convenience and safety. Testlio’s clients’ actions model three strategies for an empathetic digital response to changing consumer behaviors: 1. Simulating real-world experiences: Augmented reality enhanced home design One Testlio client launched an augmented reality service to allow customers to visualize the placement of furniture and art at home. This service mitigates the inconvenience of buying a product only to realize it wasn’t as you imagined. As a path to convenience and safety, the retailer chose to emulate the real world digitally. 2. Supplementing or supporting real-world experiences: Contactless food ordering Another Testlio client, in the restaurant industry, created a contactless ordering system. Not only is it more convenient, allowing customers to order on the app and pick-up on their schedule, but it is also safer by foregoing unnecessary contact with an employee or other customers. As a path to convenience and safety, they chose to move pieces of their business model to digital, without changing their physical point of sale. 3. Organizing and delivering products that used to require pick-up: Pharmaceuticals at your doorstep This Testlio client, a retail generalist giant, upgraded its services to include pharmaceutical organization and delivery. In doing so, they challenged pharmacies as one of the longest-standing brick and mortar points of sale, making the industry safer and more convenient by allowing customers to purchase from home. For retailers, an empathetic response to consumer needs is not a service, but the service. And with coronavirus, consumers are going digital for convenience and safety. In building your digital services for their needs, these three strategies— implemented successfully by industry leaders — are a good place to start. Need a trusted testing partner to help you perfect your new digital offering? Testlio can help – schedule a free demo today.