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How Amazon and covid-19 changed retail like never before

A post-covid hybrid retail model is set to emerge that’ll combine high tech with ‘high touch’ options

Photo: AFPPremium
Photo: AFP

Last week’s New York Times article, ‘People Now Spend More at Amazon Than at Walmart’, announced that the world’s biggest brick-and-mortar retailer had been unseated by the e-commerce giant. Lest anyone starts writing an obituary for brick-and-mortar retail based on this, one should take note of another article that was published last week. The Wall Street Journal reported that ‘Amazon Plans to Open Large Retail Locations Akin to Department Stores’. The finer details of Amazon’s planned entry to the regular retail sector, the very business that it disrupted, are not yet known. But one thing is for sure. How Amazon combines its digital and brick-and-mortar retailing strategies will define the future of shopping.

The entry of a digital leader to the business of brick-and-mortar retailing is bound to give rise to several interesting developments. It is unlikely that Amazon will sell the same products in the two shopping environments. There could be a demarcation strategy as to what category of products will be sold through digital channels and what category mostly through the company’s physical stores. There are several products that are bought by consumers routinely without much thinking. There is not much joy in shopping for them. It won’t be a surprise if most of this sort of shopping moves fully into the digital space, a format that allows quick shopping.

There are categories where the shopper would like to try out products in person before deciding to purchase them. This is particularly beneficial in the apparel category, which can often be a guessing game for customers shopping online because of size and fit concerns. These are also categories where personal advice from an expert on what suits the customer best can add a lot of value. Such products are best shopped for in a brick-and-mortar store.

Big data analytics and artificial intelligence are already the backbone of both digital and physical-format shopping. In the future, the role of technology will only get more prominent, more so in the case of online shopping. The futurologist John Naisbitt had long predicted that whenever high technology is introduced to society, there must be a counterbalancing human response that is ‘high touch’. So, as digital shopping gets more high-tech, brick-and-mortar shopping could turn out to be the ‘high touch’ face of it. This new combination of a high-tech digital experience with a high-touch brick-and-mortar one could help retailers create a more holistic and fulfilling experience overall.

Another significant factor that will determine the future of marketing will be how consumers behave after the pandemic. Due to rampant lockdowns, a large number of people who have got into the habit of shopping online. The sudden rise in prominence of Amazon, for example, can be surely attributed to a spurt in digital shopping during this pandemic. But the big question is whether digital-shopping behaviour will continue even after the covid scare is gone.

Past disasters have shown that an emotional state that’s dominant while a crisis is on does not last beyond it. For that matter, the post-crisis emotional state of people tends to be the exact opposite of what prevailed during the crisis. While World War II was raging, the predominant emotion was one of retribution. People affected wanted to avenge the lives and material losses caused by the enemy. But immediately after the war, the big emotion that gained ascendance was one of reconciliation. The victors took the initiative to rebuild the nations they themselves had wrecked during the war’s hostilities.

Assembly-line production and overcrowded ghettos that arose during the industrial revolution led to a loss of individual identity. But soon, measures were taken to counter the ill-effects of it. The concept of public parks, for example, was introduced. Trade unions and social organizations like YMCA were started to help individuals gain personal space and develop meaningful connections with fellow humans. These developments did help individuals offset their loss of personal identity.

Every social force seems to create an equal and opposite force, and our post-pandemic scenario may be no exception.

As a result of the pandemic, people have been closeted within the four walls of their homes for far too long. Most are waiting to step out of the claustrophobic circumstances created by covid and are yearning for breaths of fresh air. So, as soon as the pandemic is over, there will be a tendency for people to rush out of their homes.

Shopping malls will surely be a popular relief destination. It will be worth watching what new strategies brick-and-mortar outlets adopt to make shopping more exciting and fun as they take advantage of this retail rush. A major focus of the revised retail strategies of physical stores should be to eliminate the multiple pain points that shoppers typically encounter. Amazon is moving in this direction already. The trial stores that it opened in a few US cities used technology to do away with check-out counters, one of the biggest and most obvious pain points of brick-and-mortar shopping.

Amazon entering the brick-and-mortar space and the new shopping experience that customers will want after the pandemic is over are significant forces that could change the face of shopping. Retail spaces may never be the same again. We have truly interesting times ahead.

Biju Dominic is the chief evangelist, Fractal Analytics and chairman, FinalMile Consulting

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Updated: 26 Aug 2021, 12:31 AM IST
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