Retail Industry Trends 2020: All-In on Digital Since COVID-19

by Vivian Chan September 3, 2020 | 5 min read

This is the first in a series of posts we’ll be publishing on trends we’re seeing in the retail industry and how IT organizations tasked with deploying and maintaining flawless digital customer experiences can take advantage of PagerDuty to ensure always-on reliability.

It’s been a tough year for retail. Due to COVID-19, retailers had to take extraordinary measures to cope with heightened demand as consumers stockpiled groceries and toilet paper and flocked online to buy items like clothing and home improvement products. After months of pandemic-related disruption, some retailers have been forced to close while others have struggled to meet an unprecedented increase in ecommerce traffic.

However, even with the increase in online traffic, the holiday season cannot come soon enough for this industry. In November and December 2019, U.S. retail sales totaled $730.2bn—and struggling retailers are hoping a similar boom this year could start to change their fortunes.

However, preparing for the 2020 holiday season will be unlike any other. For their brick-and-mortar stores, retailers need to adopt protocols surrounding cleanliness and social distancing to protect staff and customers. Meanwhile, on the digital front, retailers must be ready for the impending onslaught of shoppers by ensuring that services run smoothly and are always on.

Innovative Digital Services Help Fuel Ecommerce Growth

Some of the news coming out of the retail industry in the last few months hasn’t painted a picture of health—retailers have been closing physical stores around the world and we’ve seen major brands go out of business altogether.

But ecommerce is giving retailers hope: In the U.S., online retail sales are expected to grow 18% in 2020, driven by an increasing number of digital buyers and a rise in average spending. There are also new consumers shopping online for the first time, with a 12.2% growth in online shoppers aged 65 or older. It’s a similar story in the UK, where the Office for National Statistics revealed a 50% increase in online sales in July 2020 compared to pre-lockdown levels in February 2020.

Additionally, click-and-collect and curbside pickup services have seen huge uptake in 2020. In the U.S., sales from click-and-collect orders are forecast to total $58bn this year, significantly higher than previous forecasts. In the UK, a study from grocery retailer Waitrose found that 77% of consumers are now doing part of their grocery shopping online, up from 61% in 2019.

With the same study finding that 19% of people will use a wider variety of online services post-lockdown, including home delivery and click-and-collect, it’s likely that this trend will persist and experience long-term growth post-pandemic.

These numbers clearly show that there is still an opportunity for retailers to thrive in this pandemic economy. The key to achieving this is innovation and ensuring existing services (and new ones) are delivering the best customer experience possible and are enabling consumers to shop offline or online in a safe, frictionless, and reliable way.

Digital Acceleration Will Be Key

What we’ve also seen in the last 6 months is that the retailers that have embraced digital—whether by doubling down on ongoing investment in digital properties or swiftly pivoting to adapt to the new normal—are outperforming their peers.

The lockdown saw some retailers move quickly to shore up online services and adopt more digital technologies, allowing them to convert unprecedented traffic volumes into sales. This has borne great results: In the last month, Walmart posted its biggest-ever growth in online sales, with a 97% rise in the second quarter of 2020, while online sales for Target nearly tripled.

As the retail industry looks forward, accelerating digital innovation will be critical. Digital is the new competitive playground, and those that can offer new features and flawless experiences will be best positioned for success.

A Holiday Season Unlike Any Other

This holiday season will magnify the trends we’re already seeing in ecommerce this year, and retailers need to ensure their staff and infrastructure are prepared to respond to this clear call to action: Be ready to handle the online traffic or risk losing potential peak season revenue to a more digitally savvy competitor.

According to a global survey conducted by Google, half of respondents acknowledged that the pandemic has an influence on their decisions: More than a third of U.S. shoppers who normally shop in-store for Black Friday say they won’t this year. Additionally, a number of large retailers in the U.S. have already announced that they will close their stores Thanksgiving—some for the first time in decades—diverting all their traffic online.

What Retailers Can Do to Make the Most of a Unique Holiday Season

As this year’s holiday season approaches, retailers must align their IT and DevOps teams to make sure they’re prepared to manage the anticipated spike in digital demand.

When digital is the primary channel your customers turn to, ensuring uptime is paramount. Doing this isn’t easy in the best of times—now add in the fact that most teams are working remotely due to the pandemic and the task becomes more difficult.

This is where PagerDuty can help: Our digital operations management platform is enabling companies to respond faster to minimize the impact of downtime. By integrating with IT operations tools and aggregating digital signals onto one platform, PagerDuty helps organizations gain the real-time visibility required to monitor always-on services so that when things do go wrong, the most important, actionable incidents are routed to the right teams, at the right time, to drive faster resolution.

Armed with automation and swift problem identification and resolution, DevOps teams can then focus on what they do best: developing new, innovative services that can improve the ecommerce experience.

Interested in learning more? Check out this page to learn what PagerDuty can do to help digital operations for your retail business or stay tuned for the next blog where we’ll discuss tactics for managing downtime during seasonal peaks.