Customers are loyal to brands based on their experience (and overall perception of value). Prior to COVID-19, older consumers had more established habits around off-line shopping but, given the pandemic, were forced to change those habits.
The online shopping experience is not equally good across all retailers, but where customers of any generation had a good online experience, habits are bound to change - leading to more online orders even when customers have an offline choice.
So beyond necessity influencing where customers shopped during the past three months, I anticipate those retailers that deliver a good online experience will retain online sales volume, while those that don´t will lose the customer to someone who does; or hopefully offer a compelling enough offline experience to retain previous business volumes.
Grocery strikes me as a category of retail where some have digital teams that make the most of their data and others might collect a lot of data, but struggle to make it actionable. I tend to think the current pandemic is driving home two main lessons: 1.) they need to be more digital to respond to spikes in demand, and 2.) the data they are collecting can dramatically improve the customer experience - such that rather than selling potatoes, the brand can sell a service where the combined attributes of experience, product, payment, accuracy, etc. make a customer want to shop with a particular brand - whether online or offline. Of course, a loyalty program is not necessary to enable this, but it can be a lot easier to engage the customer when they understand the value exchange. Therefore, a unified view of the customer is essential and modern SaaS technology is making it easier for those brands that understand digital, but also accessible to those who have been struggling. Those that have been struggling with digital either figure it out now, or they will get brushed aside.
The CEO may have emphasized this in the earnings call, but Nike has been building customer-facing technology for years in order to achieve understanding of the people they serve. This is loyalty strategy in action (without a points program). Their sales to individual customers may lack frequency, but usage of their products (for most) would have very high frequency. Nike recognized decades ago that they could serve people who are passionate about fitness and build a tight bond - which in turn generates very useful data that can lead to greater personalization. Such a flywheel creates advocates that talk openly about how Nike aligns with life goals - and grows the business. The latest releases are simply building upon the empire that has a solid foundation. Brands with relatively low purchase frequency need to find ways to convert their products into services, so they can remain top of mind and create defensible moats around customer insight.
This is an important initiative for any retailer, as it represents a first step toward enabling the brand (or many brands) to exist in larger digital ecosystems where their target customers exist and shop. The virtual assistant may have a tactical or strategic impact during the COVID-19 situation, but long after this pandemic, any brand that wants its products to be discovered or searchable has got to expose that inventory via API so it can be found by more agnostic personal assistants that also become shopping assistants. I applaud the effort and hope the team can learn as quickly as possible in order to evolve the proposition in the most compelling way for customers.
This pandemic has been sad in terms of global suffering, but has been a shot across the bows of those brands lagging in their digital transformation - and I think will make the fit fitter and the weak disappear to enable their resources to regenerate into new forms of value for society and the economy. My favorite story was DSW (when their stores were closed) finding a way to ship pallets of shoes to Hy-Vee (which remained open) so customers could appease demand offline. What Patricia´s examples demonstrate is that today, we have a much more "deliberate" customer. They deliberately seek some forms of short-term pleasure after months of confinement, but also deliberately spend most of their money less frivolously than during the past decade. Retailers must recognize this behavior and tailor their efforts to it (as it won´t disappear for at least 12-18 months).
To answer the first question, reviews are very important - and increasingly so as we buy more items online without seeing or touching them before the purchase is made. Negative reviews are as important as positive ones - or including a mix for the same item because they can dissuade purchases that would have been costly to resolve if the product does not live up to the description.
A customer´s loyalty to a brand is based largely on trust. How that trust is earned can be implemented differently by each brand, but I don´t think you can earn trust if you knowingly publish fake reviews and don´t call them out. So I think a brand should delete the ones they know are fake and flag those they suspect may be fake.
However, this issue is going to become harder to manage as AI and chatbots become smarter and frequently outsmart the AI that is trying to spot the fake reviews. I think the stronger the authentication of the account from which reviews are posted, the more confidence we can have in the information.
I worked at Target 35 years ago and felt valued as a team member, even if I was a part-time teenager. Customer loyalty cannot be built if the employees are not also loyal to the brand. I think this is a smart PR move, but also consistent with Target’s values.
I believe customers are paying very close attention to what brands are doing during this pandemic and will support brands that have aligned values. The past 3 months of physical distancing and working from home have also broken many habits formed over the past decade. Brands must obviously survive, but I do not believe looking after our environment, surviving, and growing the business are incompatible. Brands may need to cut some initiatives, but cutting CSR initiatives related to the environment would be very short-sighted for nearly any company.