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Surviving the Tsunamis of the Retail World
Crises and vulnerability give way to innovation, and for survival instincts to kick in. So here’s a behind-the-curtains view at how retailers reinvented themselves throughout the pandemic – and how multi-faceted innovation can truly be.
29 October, 2020

The coronavirus pandemic has affected everyone and everything. Undoubtedly, however, amongst the biggest losers of 2020 resides the retail industry: brick-and-mortar shops not deemed “necessary” have been shut down in the wake of national lockdowns, customers have significantly decreased their spending in response to job-related uncertainty, and the overwhelming majority of people have been stuck indoors. 

The whole ordeal has been akin to an approaching tsunami that no one can stop; one can only take cover and prepare accordingly. But, as famous quotes keep mentioning, crises and vulnerability give way to innovation, and for survival instincts to kick in. So here’s a behind-the-curtains view at how retailers reinvented themselves throughout the pandemic – and how multi-faceted innovation can truly be.

Staying afloat

Although it might seem trivial to the untrained eye, going digital is the first type of retail innovation there is. Nissan Brazil, for instance, is breaking the mould of the automotive industry by starting to sell cars online. Traditional retailers everywhere are begrudgingly starting ecommerce operations after understanding that the current status quo leaves no other choice. Why begrudgingly? Because going digital is often a costly, lengthy and cumbersome affair – but not always. 

During these last few months, a period in which fast adaptability has been key for business survival, retailers have been orienting themselves towards cloud-based platform solutions. Cloud commerce is both cost-efficient and accessible, as all servers are virtual: streamlining internal operations and implicitly cutting costs are incredibly easy to achieve. Furthermore, by going down the SaaS (i.e. software as a service) route, a retailer benefits from the platform provider’s automatic updates at no extra cost, hence eliminating concerns (and expenses) about maintenance and long-term evolution. If, on top of all these, the platform is also microservice-based, meaning that all parts of the platform are independently deployable, retailers can obtain valuable agility and scalability according to their own business needs. 

Architecture like the one described above enables retailers to jump on the ecommerce bandwagon at lightning-speed. Typically, large enterprises would usually require between six and twelve months to implement digital commerce operations, which is too long of a time-horizon to match the rapidly-evolving consumer behaviour. The faster retailers make the switch to digital, the faster they can bring in additional revenue. For instance, in Mexico, grocery chain Calimax had their digital operations up-and-running in just four weeks. Also, in Mexico, Asian retailer Miniso was able to condense their five-month timeline for launching ecommerce to a mere five weeks. Moreover, Santa Isabel, the largest supermarket chain in Chile, started a mammoth ecommerce operation in just two months, completely from scratch. For retailers everywhere, a short time-to-revenue is a true lifebuoy.

Surfing the waves

Simply having digital commerce operations can indeed keep retailers afloat, but surfing the waves by effectively exploiting the technology at their disposal sounds a bit more thrilling. One could increase revenues and thus navigate a crisis, while simultaneously elevating the customer experience, building brand loyalty, and ultimately improving the positioning on the market. 

For example, Romanian fashion retailer Miniprix completely changed gears and set up a grocery minimarket in just one week. By doing so, the brand achieved three purposes. Firstly, it served the local community in times when fear of physical shopping was running rampant. Secondly, it saved 200 employees from being made redundant after physical stores shut down and online fashion sales plummeted. Thirdly, it added a much-needed revenue stream to a business on the verge of succumbing to the pandemic-driven retail apocalypse. 

Other instances of quick-thinking during unprecedented times are built upon an omnichannel framework. At its core, the omnichannel approach links all sales channels, regardless if physical or digital, to provide a seamless shopping experience to the customer. But one of its other purposes is to cut logistics costs for the retailer through a unified view over inventory, which facilitates fulfillment options like ship-from-store and pick-up in-store. 

Amongst the retailers using omnichannel to its fullest extent are Cobasi, a pet shop chain, and RiHappy, a toy retailer. Using pre-existing and powerful omnichannel capabilities, Cobasi was the first Brazilian retailer to implement curbside pickup, a perfect solution in a world with minimal physical contact. RiHappy, however, was able to fully repurpose its brick-and-mortar stores into distribution centers, through offering ship-from-store fulfillment with short delivery times, a rarity at the beginning of the health crisis. 

What is more, some retailers were able to surprise and delight. In Brazil, Dengo, a chocolate manufacturing company, and Animale, a high-end fashion retailer, both started selling their products through live-streaming sessions. The strategy allows sales assistants to present products to a live audience, time in which customers can add them to their shopping carts and proceed to the checkout without ever leaving the video. 

The achievement was made possible through harnessing headless technology. Headless technology decouples the front-end from the back-end and simply calls APIs (software intermediaries that allow two applications to talk with one another) to offer a customised channel experience. Consequently, each sales medium (desktop website, mobile pages, app, IoT, and even streaming platforms) has its front-end optimized despite sharing the back-end with all all the other channels. 

Landing Ashore

Once the “new normal” settles in and the waters of the tsunami of change finally recede, retailers will find themselves in a rearranged landscape, one where different tools will be needed to thrive. Thus, the best type of innovation is the one that keeps on giving even after a crisis ends. 

One such case of long-lasting innovation is highlighted by Veranda Mall, which became the first Romanian online shopping mall during the pandemic. By venturing into digital commerce using marketplace capabilities, the shopping centre managed to help itself, its struggling tenants without ecommerce operations, and its customer base. But the online shop can become a veritable marketplace by onboarding external sellers on its virtual premises which are, after all, infinite. The physical limitations of a building would then be a thing of the past. Generally, according to a recent Gartner report, marketplaces are one of the 10 things COVID-19 will accelerate. It’s easy to see why. On the one hand, a retailer can find new customers and capture much-needed sales by selling on different marketplaces. On the other hand, retailers can become marketplaces themselves by integrating other sellers, which comes in handy when stock is not diverse enough. No matter the road taken by retailers, however, the future of commerce is bound to rely more on collaboration – perhaps the greatest innovation possible in the capitalist battlefield that is the retail industry.

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Marketing Associate at VTEX

Marketing Associate at VTEX


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