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Rebuilding retail after the pandemic

To help retailers understand the new normal, Zebra Technologies has identified the pandemic-related industry changes as the 3 Waves. This outlines the recovery process of most retailers, spanning the immediate changes that ensured stability in the early days and the longer-term, strategic changes that will become institutionalized.

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Photo by Kaique Rocha from Unsplash.com

The pandemic has caused a noticeable change in consumer behavior, which in turn necessitates a corresponding change in every retailer’s business processes. As the Philippines reopens its economy, businesses are reassessing their strategies and recovery plans differently. In fact, about 45% of business owners are hesitant to resume their operations, according to a survey by the World Bank, National Economic and Development Authority and Department of Finance.

Retailers are used to reacting to evolving market demands, and they understand that the pandemic’s impact on the industry is likely to be long-lasting, even after a vaccine is found. To help retailers understand the new normal, Zebra Technologies has identified the pandemic-related industry changes as the 3 Waves. This outlines the recovery process of most retailers, spanning the immediate changes that ensured stability in the early days and the longer-term, strategic changes that will become institutionalized.

WAVE 1: MAINTAINING BUSINESS STABILITY

Wave 1 started when global economies began to shut down in early March 2020, and many retailers were forced to stop operations in response to quarantine protocols. Many had to cut back on costs to stay afloat. Those that kept their operations had to optimize resources and labor hours while ensuring employee health and safety.

When panic buying started to strain supply chains in the early months of the lockdown, retailers realized that conventional demand planning models no longer worked. They had to find new ways to meet consumer needs without compromising their employees’ safety or incurring greater costs.

Retailers immediately started investing in technologies that could give them a crystal-clear picture of what was happening within their four walls and their supply chains. Many retailers increased their use of mobile computing and scanning solutions, helping boost their capacity to replenish orders, speed up end-to-end fulfillment and accommodate customers’ basic needs and wants both in-store and online.

Based on the collective feedback from retail leaders and store associates, the biggest lessons during Wave 1 were the importance of:

1.  Real-time operational visibility

Retailers should invest in technologies that improve their capacity and speed in managing their inventory to cope with the demand, while providing them with real-time visibility across the supply chain at the same time.

According to Zebra’s APAC Shopper Study, 88% of retailers agree that maintaining real-time inventory visibility is a significant challenge. And up to 85% say their companies need better inventory management tools to ensure accuracy.

Having access to data on operations in real time will help retailers to address consumer needs immediately and avoid either under- or over-inventory situations. This enables retailers to ensure operational efficiency and business resilience even amid pandemic constraints.

2. Distributing actionable intelligence to store associates and supply chain partners

In any given day, especially during the pandemic, store employees and supply chain partners face challenges in assisting customers. Retailers must provide them with the right tools to attend to customers’ needs by swiftly locating inventory within their stores and knowing how much inventory is left so they can get it replenished. This prevents loss of sales and translates to greater customer satisfaction thereby improving business outcomes.

This is where prescriptive analytics, intelligent automation, wearables and handheld mobile computers become exceptionally handy.

3. Overcommunicating with customers, especially when you aren’t going to be able to deliver what they want on time or at all

When stay-at-home orders were issued, many consumers had to stop going to physical stores and relied solely on online shopping for their groceries and other essentials. Being unable to see store shelves, consumers had to rely on real-time stock inventory information presented on the website or mobile app to know whether an item was available.

According to a study conducted by Nielsen during the Enhanced Community Quarantine, 27% of Filipino consumers switched brands in certain categories because the products from their preferred brands were out of stock. In such cases, the lack of communication about what is available and the inability to provide alternatives to consumers created frustration among consumers. This compromised their trust in the retailers’ capability to meet their demands and needs.

4. Prioritizing worker and customer safety above all else and compensating associates for the risks they’re taking on the front lines

Some retailers provided financial aid to their employees to help them during the pandemic. But beyond the monetary assistance, store associates are more inclined to come to work and give their 100% when they feel they are being taken care of and are physically protected. Employees expected and appreciated efforts by retailers to maintain strict social distancing and sanitization measures, especially during the early months of the quarantine when paranoia about the virus was so high. These measures included frequent disinfection of shared scanning and mobile devices and the investment in “personal” protective wearables. 

WAVE 2: A NEW RETAIL NORMAL

As operations started to stabilize, essential retailers were able to focus on institutionalizing new ways to engage customers with online and in-store experiences. Retail leaders made efforts to get people in and out of stores as quickly as possible. They ensured physical distancing through several measures, such as limiting the number of people allowed in the store at any given time, setting up directional flow lines and installing dividers to prevent contact. Temperature checks, regular disinfection and other cleaning regiments helped provide a safe environment for both shoppers and store associates. 

Even when the pandemic quiets down, retailers will still take precautions to maximize the health and safety of both customers and employees in stores, corporate offices and warehouses. Services such as “buy online, pick up in store” (BOPIS) with curbside pickup options, contactless purchases and increased integration between digital and physical experiences will become the standard means of engaging with customers.

WAVE 3: LONG-TERM TRANSFORMATION

At some level, the long-term transformation in Wave 3 should occur simultaneously with Wave 2. The pandemic is accelerating retail digitization by several years. As retailers prioritize new technologies and solutions to ride the tide of increased online shopping, such new approaches will be part of efforts to ensure retail business viability moving forward.

Retailers have no choice but to accelerate planned efforts to increase product sourcing diversity, leverage intelligent automation and scale e-commerce fulfillment capabilities. As such, businesses should consider prioritizing increased product sourcing diversity, intelligent automation and optimizing last-mile delivery to achieve greater resiliency and backend efficiency.

When demand for certain non-discretionary products spiked as news around COVID-19 broke, Philippines’ Department of Trade and Industry imposed limitations on the purchase of basic commodities to prevent supply shortage. Many retailers, however, have not yet diversified their product sources to a point where backend shortages remain “invisible.”  This reinforces the need for product sourcing diversification to ensure enough supply. 

The combination of artificial intelligence (AI) and robotics can bring data-driven approaches to supplier quality, merchandising, distribution, and logistics and fulfillment, giving retail leaders the insights necessary to maximize value capture. Instead of reacting to external forces and rapid changes in consumer behavior, intelligent automation creates opportunities to operate more proactively.

As the pandemic emphasizes the need to improve e-commerce and logistics capabilities, retailers are realizing the need to enable and optimize last-mile delivery to satisfy customer expectations, reduce marginal costs and improve overall efficiencies. To optimize last-mile delivery, retailers can provide flexible delivery options based on delivery method and location, create a collaborative network with suppliers to maximize visibility on the backend, leverage brick-and-mortar stores as fulfillment centers and use technology to maximize the value of delivery routes. All these will help ensure a safer and more efficient business flow that minimizes the impact of the pandemic while positioning the business for future success.

The pandemic has stressed the need for retailers to reassess their business processes and study the importance of innovation. Understanding the industry and choosing the right combination of solutions will assure business continuity for retailers, and service reliability for their customers. Retailers that can strengthen their digital capabilities and ensure a better online shopping experience will gain end-user trust and encourage more online transactions. This translates to greater business success not just during the pandemic-recovery phase but also in the future.

BizNews

In-aisle store displays might crowd shoppers and reduce overall sales

Retailers might seek strategies to boost product exposure without also increasing crowding – especially for cart shoppers who may experience greater crowding effects – and that excessive use of in-aisle fixtures will likely dampen sales at the aggregate level rather than increasing it. 

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In a study involving a real-world grocery store, in-aisle displays meant to boost product visibility were in fact associated with reduced sales and purchase-related behaviors, with results amplified for shopping cart users.

Mathias Streicher of Austria’s Department of Management and Marketing presents these findings in the open-access journal PLOS One.

Retailers often place extra product displays directly in aisles in an effort to boost visibility and enhance sales. However, in-aisle displays could increase spatial crowding, which occurs when people feel restricted in their freedom of movement and has been linked with purchase-avoidance tendencies. To help clarify if in-aisle displays result in more purchases, Streicher conducted several experiments with a partnering grocery store.

First, they tracked weekly sales for an aisle containing household, baby and pet staples over a six-week period during which five product-display stands were placed mid-aisle. The stands were then removed for six weeks. Comparison of sales data showed that in fact, sales increased after removal of the in-aisle displays, with the average weekly percentage of total store revenue from that aisle rising from 4.33 to 4.83 percent.

A second in-store experiment in the same aisle showed that people using shopping carts also stopped and physically handled products—behavior previously linked with sales—about 7.05 times more often when in-aisle displays were absent than when they were present. Non-cart shoppers also touched products more often when displays were removed, but the effect was smaller (3.81 times).

Finally, in an online experiment, 200 participants imagined using a shopping cart or basket while viewing photographs of the same aisle from the in-store experiments, with or without in-aisle displays. They tended to rate the aisle with displays as more crowded and reported lower levels of perceived control for aisles with displays than those without, with effects amplified for imagined cart versus basket use.

Together, these findings suggest retailers might seek strategies to boost product exposure without also increasing crowding – especially for cart shoppers who may experience greater crowding effects – and that excessive use of in-aisle fixtures will likely dampen sales at the aggregate level rather than increasing it. 

Further research could address some of this study’s limitations, such as by considering the effects of human crowding, promotional offers on products, and seasonal influences on shopping behaviors.

Streicher adds: “The research shows that adding merchandise into store aisles can actually reduce overall sales by making the environment feel crowded and harder to navigate. Importantly, this negative effect is even stronger for shoppers using carts, as they experience greater spatial constraints and reduced control while shopping.”

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BizNews

Structure of online reviews shapes their helpfulness

Reviews that grow increasingly positive are most helpful to readers, while those that turn negative are least helpful. For average-rated products, progressively negative trajectories enhance helpfulness, whereas reviews that start negative and grow positive are least effective.

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A study of nearly 200,000 Amazon reviews shows that the usefulness of online product reviews depends not only on what is said, but on how the information is structured.

The researchers, from the Universities of Cambridge and Queensland, studied Amazon reviews for products ranging from clothing to food to electronics. They found that how the information is organised matters as much as what is said, and that different review structures are more or less helpful, depending on how highly the reviewer has rated the product.

Their results, published in the journal Scientific Reports, could help companies and third-party review platforms design their review pages to prompt the sort of reviews that will be most helpful to potential customers.

For example, a reviewer assessing a laptop might praise its performance and design while criticising its battery life, so how should such information be structured to be most useful to the reader? Should the review begin with criticism and end on a positive note, or start positively before turning to drawbacks?

“Any target of evaluation typically has both positive and negative aspects, which makes crafting evaluative messages challenging,” said co-author Dr Yeun Joon Kim from Cambridge Judge Business School. “The key question is how to structure these elements within a single message. For example, one might present criticism upfront and then move to praise, or instead integrate negative points within an otherwise positive evaluation. Yet research has paid little attention to this structural dimension.

“We wanted to understand whether certain structures are consistently more effective, or whether their effectiveness depends on the performance of the target being evaluated.”

The study was based on 195,675 reviews of 5,487 distinct products, and assessed performance and related factors, and a helpfulness score as measured by reader votes.

The researchers identified nine possible structures of online reviews ranging from Type A reviews that start positive and become more positive as they go along, to Type I reviews that start negatively and become even more negative – with lots of variance in between.

For highly-rated products, reviews that grow increasingly positive are most helpful to readers, while those that turn negative are least helpful. For average-rated products, progressively negative trajectories enhance helpfulness, whereas reviews that start negative and grow positive are least effective. For low-rated products, reviews are judged most helpful when they open constructively before introducing criticism.

“The results are nuanced but very clear,” said co-author Dr Luna Luan from the University of Queensland, who carried out the research while earning her PhD at Cambridge Judge Business School. “Looking at the overall sentiment of reviews does not fully translate into message effectiveness. It is the broader structure of sentiment – how positivity and negativity evolve throughout the review – that shapes how readers interpret online reviews.”

“Our findings have practical implications for how platforms and companies can design review pages in order to elicit the sort of reviews that will be most helpful to readers based on how highly products are rated,” said Kim. “For example, instead of simply asking ‘Write your review here’, the online review form could instead include micro-prompts that guide how reviewers structure feedback in a way recipients find most helpful.”

The researchers found the most commonly used review styles are not necessarily the most helpful to readers. In particular, for average- and low-rated products, the structures that reviewers tend to adopt often differ from those that readers find most useful.

This mismatch likely reflects different underlying motivations. Reviewers are not always writing to maximise usefulness for others, but may instead be expressing their own experiences, frustrations or emotions – especially when evaluating products of moderate or poor quality. As a result, review writing often serves both as information sharing and as a form of self-expression. This helps explain why widely used review styles do not always align with what readers perceive as most informative or helpful.

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Strategies

Online marketers, take note: Online viewers prefer livestreams to recordings

Watching an online performance in real time boosts several aspects of the viewing experience.

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In an era when most TikTok videos are prerecorded, can a band with a new single create a tighter bond with fans by debuting via livestream instead? Can a business do the same when promoting a new product?

New research from the McCombs School of Business at The University of Texas at Austin suggests they could.

Since the pandemic, the livestreaming industry has been booming. The global market is expected to reach $345 billion by 2030, up from $100 billion in 2024. Nearly 30% of internet users watch livestreams at least once a week on social media.

Adrian Ward, associate professor of marketing, is one of them. A few years ago, he was viewing a livestream of a town hall meeting and found himself gripped by a speaker’s comments, feeling as if he were actually in the room. On reflection, he suspected it was the liveness of the event, as much as the speaker, that kept him glued to the screen.

“As we spend more of our time online and on social media, it’s worth asking how we can feel as complete and connected as possible in these spaces,” Ward says.

Live and Let Stream

With Alixandra Barasch of the University of Colorado Boulder and Nofar Duani of the University of Southern California, Ward began to investigate what he calls the “mere liveness effect”: the idea that simply knowing an event is streaming in real time makes a viewer feel more connected to the performer.

The researchers ran five experiments with 3,500 total participants. By manipulating various factors, they compared how, when, and why viewers reacted to watching livestreams versus prerecorded videos online.

In one experiment, participants watched live or recorded videos of their choosing on the platform Twitch. In another, they viewed a performance by the R&B cover band Sunny and the Black Pack, either live on YouTube Live or its recording the next day on YouTube.

In a third, the researchers created their own streaming platform to show participants identical videos, manipulating whether the content appeared to be live or prerecorded.

The experiments provide evidence that watching an online performance in real time boosts several aspects of the viewing experience:

  • Connection. Viewers in one experiment felt 7 percentage points more connected to the performers in the live video. Another experiment showed the effect was even stronger when viewers believed no one else was watching.
  • Enjoyment. In another experiment, viewers enjoyed the live video 5 percentage points more than the prerecorded one.
  • Engagement. Real-time streams carried a “liveness lift.” Viewers chose to continue watching longer, and they were more willing to follow and subscribe to the live streamer’s channels.

A common factor underlying those effects was a heightened sense of presence, Ward says. “When we watch something live, we are psychologically transported there.

“It’s not that there’s actually something different about the video itself. It’s that we know that it’s live right now, and that breaks down barriers between our world and the world on the other side of the screen.”

Lessons for Liveness

One quality weakened the liveness effect: not being able to see a performer’s face. When viewers saw only a musician’s hands, they felt less connected, even though they were watching the same performance.

The findings have implications for marketers, platform developers, and content creators, Ward says. In an age when people increasingly meet their social needs online, going live can benefit streamers by motivating audience engagement.

As a follow-up, he’s working with a graduate student to study whether the liveness effect translates into greater brand trust or sales.

“From influencers to businesses, it’s about the experience of real people seeing other real people live and in the moment,” Ward says. “It makes you feel like you’re sharing something.”

The Liveness Lift: Viewing Live Streams Creates Connection and Enhances Engagement in Amateur Music Performances” is published in The Journal of Marketing.

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