Keeping close to customers will be critical in 2021

Fjord's trend report explains why brands should rethink the role of stores and supply chains to handle ongoing upheaval.
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The changes brought on by the pandemic can be connected by one thread: displacement, the uprooting of how we live, work, play, and spend throughout the day and across devices.

In its annual trend report, Fjord, a division of Accenture Interactive, highlights the ways businesses have had to respond to these changes, and the importance of continuing to do so as uncertainty continues into 2021: urgently reshaping how they manufacture, ship, store and deliver products, as well as question the role physical shops and other assets play in their business models.

Brands could previously enjoy efficiencies with shopping experiences bundled together. But with fewer people going in person to physical shops, the centrality of hubs in cities is dwindling, as are physical retailers’ volume efficiencies. Fewer shops means fewer impulse purchase items, and now more of us shop online for exactly what we need and rarely anything more.

And with ecosystems fragmented, it has generated extra costs in marketing, packaging, delivery, customer service and returns. In an uncertain environment with mobility restrictions, the report says, people will carry on with a combination of in-store and at home shopping.

Home as the new store front

In response to disruptions, CPGs like PepsiCo are expanding their supply pipeline and broadening touchpoints by selling direct-to-Consumer (DTC), enabling them both to get their products to customers quickly, and to offer data-driven product bundles that prompt people to buy more.

In May of last year, the food and beverage company announced that it is launching two new direct-to-consumer websites — PantryShop.com and Snacks.com — in response to increasing pandemic demand.

Kraft Heinz, through its Canteen DTC site, is allowing customers to buy family-sized bundles of the CPG’s top-tier brands, such as KD, Kraft Peanut Butter, Heinz condiments and Maxwell House coffee – and has launched campaigns in Canada to see what demand might be like for smaller households. And its not just CPG: in August, LG launched a DTC online store in India to complement its overall channel strategy.

Brands are also continuing to explore augmented commerce innovations such as augmented reality: MAC Cosmetics is one of the many that uses AR to enable virtual trial of products, but it has expanded it to make it available while watching videos on YouTube.

MAC’s AR was already highly relevant to the amount of cosmetics content and makeup tutorials on YouTube, but once the pandemic started, Fjord points out that there were massive spikes in “step by step” and “how to” video search traffic. As part of this surge in interest, it says brands have to begin to start thinking of people as co-creators, and reframing their role from sole fixer to collaborative enabler.

An example cited in the report is Nike’s personalized footwear proposition Nike By You, while lets people tailor and customize their own perfect shoe. Competitor Adidas has a MakerLab that enables third party designers and artists to bring their creations directly to market.

Closeness to the customer is more critical than ever

Companies, the report states, may need to rethink the position of supply chains within their business and make it a priority to expand the idea of what their assets are and how to use them. In the U.S., Lululemon was amoung the first to reopen its stores more as fulfilment centres to fill online orders more quickly, rather than accommodate walk up business.

More virtual stores have cropped up to tap into different touchpoints, virtually, or the case of some QSRs “ghost concepts” – customer-free locations that support ecommerce. Starbuck locations are now pick-up points, an attempt to deliver the same personal experience at all touchpoints, in an effort to stay true to its core belief in the importance of connection outside home or work, referred to by Fjord as “the third place.”

How to think of the supply chain

Fjord says brands must analyze what assets like a “shop” really deliver, and to consider what belongs in digital and what belongs in the physical realm.

It also reminds brands that they have to openly commit to shifting to sustainable redesign now, because within five years, sustainability will be the biggest influence on a brand’s infrastructure decisions.

Fjord also says that companies need to evaluate the often-hidden parts of the experience chain that add unrecognized value. For example, is “waiting time” part of your experience? How can you use it as a white space to delight customers?

Getting the overall message across

With so many different touchpoints, Accenture recommends studying the context of a brand’s customer base, because it will likely remain unstable for some time to come.

It says brands need to reimagine how they can deliver physical experiences like texture, access to advice and the shelf experience, and brands would do well to consider how they might change product descriptions to better convey why they’re worth spending money on. Despite the shift to ecomm, many online shops still don’t currently offer a quality browsing experience that one might have in-store, still prioritizing product display instead of shaping the customer experience overall, which limits discovery.