It took less than a week into 2021 for the optimists among us to realize we were in for another wild ride. Given the challenges that most of us faced and surmounted in 2020, the hope that smoother sailing lay ahead in the year to come was understandable, if not, realistic.
In the world of retail, invariably, the conversation primarily revolves around mandatory lockdowns due to the COVID-19 pandemic and changing (perhaps permanently changed?) shopping behavior as a result.
Retailers were quick to adapt, evolving the role of stores and changing the focus from experience and dwell time to become de facto fulfillment centers, offering relief for the already strained supply chain. Click and collect, curbside pick-up, self-checkout, frictionless transactions and same-day delivery became the norm as shoppers scrambled to purchase essential goods.
As we look back on 2020, it’s clear that we saw an accelerated drive toward true “phygital” retail that combines the best elements of e-commerce and brick-and-mortar. For those who study the industry, it’s obvious that the symbiotic nature of stores and their e-com counterparts is critical to the growth of retail. Each has its obvious advantages and drawbacks, but utilized in a strategic and customer-focused manner, they allow retailers to deliver what the customer needs and wants – when, where and how they want it.
I’m often asked about which retailers are “doing it right” – who should those that aspire to this “phygital” model look to for inspiration? Despite all of the challenges that 2020 brought with it, Target (Minneapolis) still managed to achieve comparable year-over-year sales in the holiday period of November/December 2020 that grew 17.2 percent from 2019 to 2020.
Even with restrictions in place, wary shoppers concerned about a pandemic still not under control and the financial implications of mass shutdowns and layoffs, the retailer’s comparable in-store traffic grew 4.3 percent in 2020. Target stores fulfilled more than 95 percent of the company’s sales in November/December, and same-day fulfillment services like curbside and in-store pick-up of goods grew a whopping 193 percent.
Target’s efforts to create a true omnichannel business paid off for the big box retailer in a big way last year. As we look ahead to the obstacles that potentially lay ahead in 2021, smart retailers will take stock of their offering, re-examine their last mile services and think hard about how to take the best attributes of their online and in-store businesses to meet, and even anticipate, the changing needs of their customers.