Online Shopping Surges Are the ‘New Normal’
The Great Debate: From 'Now' to 'Next'
Rob Gonzalez shares an example from the 2008 financial crisis, highlighting how emerging brands have historically stolen market share during times of crisis.
Cues From the 2008 Financial Crisis
Online Grocery Experiences Are Still Not 'Delightful' Experiences
There Are No
Single-Channel Shoppers
Profit-VS-Loss Focus Stifles Innovation
We are in a state of constant flux, adjusting to changing realities on a daily basis, or so it seems. Leaders are often in crisis mode, making the best of situations that are thrust upon them.
The Digital Shelf Virtual Summit, presented by The Digital Shelf Institute (DSI), featured sessions examining the trends of the "new normal" and — based on the history of other disruptions — created actionable insights that will lead us into the "next normal."
Click to Meet the Experts
Uncovering the Lasting Impact of COVID-19
Chapter 1:
What of the ‘New’ Normal Will Last Through the ‘Next’ Normal?
"The coronavirus crisis will not so much forment drastic changes as it will accelerate trends that were already happening — changes that might've taken 10 or 15 years, simply because of the stickiness of the status quo, may now happen in far less time.”
— Ben Thompson, Author and Founder of Stratechery
What of the ‘New’ Normal
Will Last Through the
‘Next’ Normal?
Chapter 1:
What of the ‘New’ Normal Will Last Through the ‘Next’ Normal?
Contributors
ROB GONZALEZ
Rob Gonzalex is a founding member of the DSI and co-host of the Unpacking the Digital Shelf podcast, the only podcast for brand manufacturers looking to find success on the digital shelf. He is also a co-founder of Salsify and a core member of venture capital firm Underscore VC.
WATCH THE FULL EPISODE
Chapter 1:
What of the ‘New’ Normal Will Last Through the ‘Next’ Normal?
Contributors
SUCHARITA KODALI
Sucharita Kodali is the VP and principal analyst serving ebusiness and channel strategy professionals at Forrester. Kodali is an ecommerce, omnichannel retail, consumer behavior, and online shopping trends expert and an authority on technology developments that affect the online commerce industry.
WATCH THE FULL EPISODE
Chapter 1:
What of the ‘New’ Normal Will Last Through the ‘Next’ Normal?
Contributors
SRI RAJAGOPALAN
Sri Rajagopalan is the former VP of ecommerce at Revlon and Johnson & Johnson. Rajagopalan is one of the leading ecommerce experts in the consumer goods space, bringing over 25 years of experience that spans sales, digital marketing, ecommerce, IT, and business intelligence.
WATCH THE FULL EPISODE
55%
Ecommerce sales are still up 55% year-over-year for the first seven months of 2020, resulting in $434.5 billion in online spending.
There is a great debate within the industry over which shopping habits and behaviors from this flux period will last. Kodali and Rajagopalan debated this question, and Kodali outlined three reasons why the recent sales surges may not.
From out-of-stock items to exceptionally long lead times for delivery — or canceled orders and substitutions — online grocery shopping and fulfillment is still not a delightful experience. “Within essential and the grocery sectors, the experiences have candidly been pretty terrible,” Kodali said.
Once the COVID-19 crisis ends and brick-and-mortar stores begin to open back up, it’s expected that previous buying behaviors will return.
"Even if you're looking at consumer electronics or computer software, things that are heavily online, you have a lot of migration amongst different websites, different offline shopping destinations, lots of word-of-mouth research that often takes place," Kodali said. "That is a factor to consider. And given the ubiquity of essential retailers that are physically proximate to customers, just the convenience of being able to shop in physical stores is something that will be a factor that's hard to hold back."
"There is no such thing as a single-channel shopper in any category," Kodali said.
The economics may simply not be there to sustain a high level of ecommerce activity for online grocery. “Click-and-collect orders cost grocers an average of $7 and delivery orders cost an average of $20. Just because people want something or just because an innovation exists doesn't mean that it will become commonplace if the supplier chooses not to do it," Kodali said.
“Many brand manufacturers who have traditionally viewed their business economics purely in terms of profit versus loss may not be willing to subsidize that loss for retailers — even if it would pay off in the long term,” Kodali said.
Online Grocery Shopping and the Michelin Man: How Are They Alike?
Kodali highlights one of the primary roadblocks for innovation across industries: a focus on profit versus loss.
"This is not a cost issue. This is a P&L [profit and loss] issue," Rajagopalan said. "A P&L issue based on a certain cost to service that has been built over five decades. If you want to be successful in the digital race, you're going to have to make a capital investment. That's going to screw up that formula in its entirety."
SCANR: 5 Essential Questions for Your Digital Strategy
Rajagopalan discusses the steps that ecommerce leaders must take to join the digital revolution
1. SEARCH
Is your brand showing up everywhere it needs to be?
Chapter 1:
What of the ‘New’ Normal Will Last Through the ‘Next’ Normal?
Ask yourself these five essential questions using the SCANR framework:
2. CONTENT
Are you paying as much attention to your digital shelf packaging as you are to your physical shelf?
3. ASSORTMENT
What do you sell online that's differentiating and not cost-prohibitive?
4. NAVIGATION
Are you influencing the outcome of retailer browsing?
5. RATINGS & REVIEWS
What are you doing to monitor, respond to, and activate the learnings from your ratings
and reviews?
Plan for Tomorrow:
D2C and Data Are
Non-Negotiable
“Retailers are going to tell manufacturers, ‘If you want to bring innovation to me in 2021, you need to bring me data first. Why should I believe you? Why will it succeed?’” Rajagopalan said.
Rajagopalan emphasizes the importance of data insights for navigating future market shifts.
“In 2020, not being in D2C is not a great move. The best way you can collect feedback from the consumer, enable user-generated content on your ecosystem, build brand trust and authenticity, is having a relationship with your consumers,” Rajagopalan said. “If you want new SKUs to show up on the shelves, you will have to bring your retailers data to get their attention. That’s what the digitally native brands are doing.”
Source Adobe
Chapter 1:
What of the ‘New’ Normal Will Last Through the ‘Next’ Normal?
Go to Chapter 2
