Colombia. The pandemic has accelerated the digital transformation of retail with structural consequences that should be analyzed. Looking to the future, retailers will have to be agile to respond to changes in consumer behavior and know how to seduce them to be victorious in their next purchase choices.
Esteban Franky, Country Manager Colombia of Tiendeo, a leading company in digital solutions for the retail sector, takes stock of this first half of the year and details what will be the trends that will be maintained in this gradual return to "normality".
What has been the situation of retail in this first half of 2021 and what are its prospects for the second half of the year?
At the beginning of the year, companies continued to experience the impact of COVID-19 with new restrictions that accelerated trends in the retail sector at all levels. 2020 has been a revolution for many retailers, who understood that, if they wanted to succeed in this crisis, the only option was to bet on digital transformation.
In fact, in this first half of 2021, we have seen many retailers increase this commitment to digitalization in their marketing actions (digitization of the promotional catalog, digital advertising, communication with customers ...). Large retailers such as Jumbo, Metro, Easy and Homecenter among others, have expressed since last year their willingness to reduce or even eliminate the entire production of brochures or catalogs in paper format in favor of an online alternative, more adapted to the new situation.
The online channel also plays an important role, e-commerce growth of 24% is expected, which is estimated to account for 30% of all retail sales by 2030. More than a third of marketers are expected to increase their investments to generate omnichannel shopping experiences.
While selling through e-commerce will increase its market share in the coming years, the traditional channel, physical sales, will continue to account for two-thirds of the sales made. This percentage may vary depending on the category, reaching up to 50% between online and offline sales.
What trends have increased or emerged during the pandemic in retail (e-commerce, omnichannel, click & collect, proximity consumption)? Will these trends continue when we return to normal?
In this last year we have seen how e-commerce has been gaining weight, in the last five years the region went from 126 to 267 million buyers. However, the physical store is and will continue to be the preferred shopping channel for consumers for years to come, whether it is to search for products, acquire items or pick up orders. This is demonstrated by the rise of other complementary services to the physical store such as "Click and Collect", which has doubled this last year. Other trends that have emerged and will continue in the future are different payment methods and delivery options. For example, Cencosud has strengthened its dark store model to face the growth of online shopping and giants such as Walmart have also already announced their incursion into these formats.
One of the trends that emerged most strongly during the pandemic is the growing consumer concern for the environment, the ethical and sustainable actions of retailers and brands, which together with local commerce became relevant factors in the customer's purchase process.
How will the consumer evolve in the coming months in the face of a new normal?
This crisis is going to accelerate and change some of the behaviors of consumers. Post-pandemic consumers demonstrated greater price sensitivity, so they will look for savings and discounts that allow them to maintain their finances.
In relation to shopping habits, these will also change. If more than a year ago the online channel was used only to plan high turnover purchases, the new consumer will regularly use search engines and social networks such as Google, Facebook, Instagram, Tiktok or WhatsApp Business. Jumbo has launched its company account on Whatsapp to provide a service of attention to its customers.
How will retailers adapt to this evolution and how will they generate greater confidence for consumers to return to stores?
Retailers will have to adapt to the evolution of the consumer and anticipate these changes. Faced with a more demanding and digital consumer, companies that have a real omnichannel presence (online and offline) and have a clear communication strategy throughout the purchase process, will generate greater confidence that in addition to keeping them current will give them the opportunity to gain market share.
This requires constant and intensive communication throughout the entire purchase process, that is, being where consumers are and standing out above others, so digital marketing will play a key role in the strategy of retailers for 2021.
