Bhava Kompala: Prior to Covid-19, retailers already had to provide consumers with more choices in terms of shopping convenience. This continues to be true, and brick-and-mortar retailers can lean into their physical locations as consumer touchpoints in a way that pure-play e-commerce and online retailers can’t.

It was interesting to see that ~45% of consumers believed that the new shopping behaviors they adopted during Covid-19 have become “habits” that will continue after the pandemic. As such, I expect that consumer preference for BOPIS will continue and be driven by a mix of a desire for convenience and lingering concerns about safety. BOPIS will be dominated by contactless curbside pickup for many retailers with ~19% of consumers preferring contactless pickup when frequenting a business and nearly 35% preferring contactless checkout in general.

Whether consumers actually go inside to pick up their merchandise or prefer contactless curbside pickup, retailers must continuously improve their mobile experiences including their apps and checkout/payment options. In order to keep consumers satisfied, retailers must provide the best possible digital experiences — from providing personalized promotions while shopping online, to enabling seamless communication with the employee pulling the merchandise for pickup, to collecting and redeeming points, to providing product bundling options, to the final pickup interaction, including customer verification.

All of this opens up significant opportunities for retailers in the areas of consumer analytics for marketing, merchandising, supply chain, and more.

Drenik: It’s interesting that you mention how physical store locations can be used as a competitive advantage today. Even before Covid-19, there was a lot of talk about the death of brick-and-mortar. What is your take on the return to physical stores post Covid-19?

Kompala: There is no doubt that the shift toward online shopping will continue post-pandemic. According to the Mastercard Economics Institute, consumers spent $900 billion more online in 2020 versus the prior two-year trend. Future trends depend largely on the retail category. There is a lot of pent up demand for getting back to physical stores for apparel and footwear. However, for lower involvement items like groceries and home care, the shift toward online shopping will be more permanent.

Prosper Insights & Analytics data showed a steady increase in consumers that had tried online grocery shopping, hitting 40% in March. There was a similar uptick in the use of the major online grocery players including Amazon, Kroger, and Walmart. In fact, 50% of Amazon Prime members said they had used Amazon to buy groceries online in the past 30 days. Other online grocery delivery apps like Instacart saw massive growth during Covid-19. I expect continued adoption of native apps and other tech-driven solutions to power retail going forward.

However, even the rise of online grocery won’t likely be the end of physical stores. Instacart doesn’t use the Amazon warehouse model and still depends on the infrastructure and network of local grocery stores that consumers know and trust. Whether consumers go to a physical store themselves or pay for someone else to shop for them, in-person shopping is not dead. This is really reinforced by 68% of consumers who still say they depend on physical store locations being open for their shopping needs.

There is also an interesting real estate angle that’s resulted from Covid-19. With commercial real estate still depressed from the pandemic, many retailers — including digitally-native brands — are taking advantage of the glut of vacant space and cheap rent with lots of opportunity to experiment with smaller-scale pop up stores.

Drenik: You mentioned that you expect to see an increase in “tech-driven” solutions powering retail. Our most recent data shows that just above 20% of consumers have used a smart home assistant like Amazon Echo, Google Home and Apple HomePod to add items to a shopping list. What does this mean for retail brands and what other tech trends are picking up?

Kompala: With more people embracing online shopping, I expect to see continued adoption of voice-enabled smart home assistants for both delivery and BOPIS. Amazon is the obvious giant in the space, but Google has successfully partnered with large retailers like Target and Walmart to power voice-activated shopping.

AI-powered chatbots have also seen significant growth during Covid-19. The pandemic emptied a lot of call centers and many businesses were forced to operate with reduced staff. For retail brands, chatbots are filling gaps by helping with routine transactions, answering questions about shipping and returns, and even taking orders.

On the B2B side, chatbots are also driving innovation for retailers. For example, we developed a chatbot for a large online retailer. In this organization, there were thousands of dashboards and reports, many of which were redundant, and some of which had inconsistent or stale information. So, rather than let senior executives wade through countless reports, our chatbot enables them to get answers to voice queries such as: “What is the same-store sales quarter-over-quarter in Pacific Northwest?”

As we deployed this system, it was extremely well received by the end users. It helped improve the user experience for the end users when they wanted information and insights. It also reduced the time to glean insights significantly.

The other interesting trend picking up is digital wallets, which will allow customers to load the cash and pay using cellphones.

Drenik: Finally, 62% of Americans say they are somewhat or very concerned about the privacy of their personal identity when shopping online. What are your thoughts here?

Kompala: I’ll touch briefly on this. In short, this is not a surprising sentiment. Protection of consumer privacy is only going to become more prevalent, and retail brands/advertisers will need to find ways to deal with things like the end of third-party cookies and Apple’s IDFA and App Tracking Transparency feature.

While retailers will likely lose quite a bit of data and targeting ability in the beginning as these regulations and policies take hold, there is a significant opportunity for them to also boost investments in gathering and analyzing other consumer data for personalized targeting such as first and zero-party data, and behavioral/contextual data.

From a marketing analytics perspective, having a robust data analytics framework for building models that enable more accurate audience segmentation and targeting will be very important as we move ahead.

Drenik: Thank you, Bhava, for your expertise on the topic of retail trends. We look forward to seeing how these play out in the long term as we enter Covid-19 recovery.