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Digital

Digital


The Digital pillar is defined as: easy ways to shop online or with an app, and usefulness of information provided. During 2020, Digital increased in importance to drive short-term financial performance. Walmart Chief Financial Officer Brett Biggs said the shift in customer buying behavior at the start of the pandemic amounted to "three to five years of acceleration in eCommerce, really in a period of weeks and months."

As Covid accelerated a dramatic lift in web search, website traffic, and conversion. According to Microsoft Advertising, food, grocery, and cooking content searches jumped 53.8% YOY. And traffic to grocery websites increased 34.8% from January to October 2020. According to Edge Ascential, overall grocery eCommerce was projected to grow 50% in 2020.

Digital is ubiquitous today with every retailer offering some form of delivery. However, we found Digital became less important in driving long-term emotional connection with customers, indicating they likely shopped online out of necessity, rather than preference - driven by out of stocks or to avoid the risk of Covid. Poor experience with online shopping might also explain why Digital can negatively impact emotional bonds, as consumers mentioned being frustrated by the lack of Quality produce, wrong substitutions, and difficulty finding pickup slots. If customers maintain their Covid Era online shopping habits, only retailers capable of delivering a positive Digital experience will retain them post-Covid. Brookshire's Grocery and BJ's Wholesale made a leap in Digital customer perception compared to last year. Brookshire's Grocery had the biggest jump in position than any other retailer in any other pillar, going from 33rd on Digital to 9th and sitting comfortably in the First Covid Quartile. BJ's Wholesale paired strong performance in Digital and Operations to have one of the highest Covid Momentum Scores, and making one of the biggest moves in the RPI study this year.

Digital and Covid: Voice of the customer

"Out of stock items are especially challenging when ordering online, because you don't find out until the order is packed that the items aren't available, so you can't add new items or adapt your menu plan for the week as well as if you are in store."

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Retail leaders must objectively understand how their business currently considers Customers before trying to set a more Customer-centric direction and focus. There are some formal assessment methodologies, like dunnhumby's Retail Preference Index (RPI) and Customer Centricity Assessment (CCA), which offer detailed evaluations of a business' capabilities, strengths and weaknesses based on Customer perceptions (RPI) or global best practices (CCA).

The approach outlined below is not intended to replace these formal tools; rather, these observations are intended as a kind of 'toe in the water' to help retail leaders form early hypotheses and points of views. These are rules of thumb, heuristics culled from global experience. Later, leaders might use these observations to informally check progress from time to time as a way of assessing whether the "program in the stores matches the program in our heads".

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