2020 was marked by a significant reduction of physical store footfall, a historic drop in retail sales, a record-breaking number of physical store closures and widespread job loss. In the same year, we saw the center of gravity of retail operations shift even further towards online.

COVID-19 altered customer experience across the brick and mortar landscape in several visible ways: hygeine concerns resulted in a reticence to interact with in-store environments, new health and safety measures gave rise to new expectations of convenience, contactless technologies were given increased attention by retailers, and the role of the store employee shifted to include the fulfillment of online orders and new health and safety measures.

As more and more brands have moved their operations online, digital capabilities have become a competitive arena and customer data has become a potential goldmine. According to Vue.aixvi, product discovery features which tailor to people’s preferences can double the average order value and increase the revenue-per-customer by 60 to 80%.

However, not everyone has such a positive outlook on personalization. Critics are vocal about how companies gather personal information to not only predict behaviors, but also to influence and modify them. Over 60 jurisdictions around the world have enacted or proposed laws on privacy & data protection. In such a rapidly evolving landscape, we are seeing a lot of experimentation from companies that try to differentiate themselves online.

Despite the ongoing consumer migration to online channels, physical locations continue to play an important role in the shopping journey. However, digital has increasingly reshaped expectations of the physical store experience. In this evolving context, there’s a need to rethink the role of the store and apply what were previously considered online-only methodologies to the physical world.

New innovations using extended reality (XR), smart technology (e.g., sensors and cameras), QR codes, and smart labels are enabling consumers to unlock new layers of experience, from additional product information to engaging interactions. These innovations could signal the start of the truly connected experience.

Ecommerce has developed into a functional, but not always favorable alternative to in-store shopping. With consumers now spending more time on e-commerce sites, brands are adopting a new mantra: not every interaction needs to be a transaction.

In practice, they are turning this mantra into a reality by building a more emotional and social online shopping experience where consumers can explore branded experiences across online channels, try out products virtually in XR, ask for help and get guidance online, and share their experiences with friends. These types of novel experiences online are helping brands create a stronger connection to their consumers and build true loyalty, which in the end, results in an increased customer lifetime value.

Product trial and consultation are among the top reasons why customers visit physical stores. With in-store shopping severely limited due to the pandemic, brands have scrambled to recreate these key moments of the buying journey online. Companies are three times likelier than they were before the crisis to conduct at least 80% of their customer interactions digitally.

These digital interactions are taking on new forms as live shopping is takes over social media, video conferencing tools enable co-browsing with sales associates, and artificial intelligence (AI) levels up. Brands are using virtual consultation in all its forms to make a lasting impression, offer consumers the human touch that they are currently craving, and recapture some of the brand loyalty that has faltered since the onset of the pandemic.