2020 presented challenges to retailers they've never experienced in this lifetime.

With the pandemic shuttering brick-and-mortar locations for a variety of retailers — from clothing shops to convenience stores — across the globe, questions arose about what to do to maintain and sustain business.

Even before the pandemic, physical stores were seeing foot traffic trickle down. Shopping center traffic has decreased by 27% year-over-year, while e-commerce has reached levels not projected until 2022. As stores have reopened and we (hopefully) approach a sense of normalcy again, the hesitancy to enter stores and malls crowded with shoppers still lingers.

Despite slight pickup in foot traffic during the COVID dip in the summer and early fall, the increase in cases and lack of confidence has pushed shoppers even further to the online space. It has been an alarming wake up call, especially for small businesses, many of which have unfortunately never recovered and were forced to close their doors and cut jobs. For those left standing, they face a new dilemma — innovate, or run the risk of collapse.

Digital transformation and consumer behavior

Online shopping was already on the rise before the pandemic, but quarantined consumers turned more sharply to e-commerce, contributing to year-over-year spending growth in 2020. The changes to consumers' shopping behaviors are expected to continue, with 44% of shoppers stating that COVID-19 will lead to long-term changes in their habits and 47% continuing to purchase more goods online.

Though the digital transformation of retail isn't necessarily a new concept, it has been accelerated by the need to offer consumers more interactive ways to browse and make purchases. The days of going freely into a store to try on a sweater or sample a tube of lipstick are gone (for now), and retailers need a rich omnichannel strategy to engage with and maintain their customer base. Investing in more technology to enhance the customer experience is essential. Retailers can no longer view the digitization of the shopping experience as a threat, but as a complement to their overarching retail strategy.

Technology shaping the way we shop

Though online shopping tends to take a more independent approach, consumers often still need support — especially when considering purchasing complex, high ticket items like jewelry, furniture and electronics. Technology such as online chatbots has existed for some time and is helpful in some instances. But customer service has and must continue evolving to improve the end user experience.

Many businesses are seeing the value in technologies like live video and AR to better connect with their customers, especially in those instances where they are considering a significant purchase.

Take, for instance, a couple shopping for an engagement ring. This purchase is not only quite expensive, but it holds a great deal of sentimental value. The same can be said for home furnishings like a sofa — the shopper has designs, colors and other aesthetic features in mind that can shape their entire living space. These large-scale purchases benefit greatly from the ability to touch, feel, hear and see how they look and perform. Live video solutions provide a way to connect shoppers with a trained associate to discuss product benefits and receive a demo from their desktop or mobile device in the comfort of their own homes. While the customer may not be able to try on the ring or have a seat on the sofa themselves, associates chatting with them via video technology can provide them with a similar experience.

Utilizing live video also can provide the sort of personalization shoppers are seeking in today's environment. Regardless of the platform, today's shopper is looking to purchase from brands that cater to their unique tastes. A recent Forbes article noted that 91% of consumers are more likely to shop from brands that provide customized recommendations, and 80% are more likely to buy from retailers offering a personalized experience.

Using a platform offering live video chat, retailers can deliver a one-on-one experience for customers with a dedicated associate as their own personal shopper to showcase products and help them along the purchasing journey. These technology platforms also help retailers collect data from the shopper's previous searches and purchases, allowing them to make tailored recommendations.

The rise of the dark store

While not in itself a technology, dark stores are the result of technological advancement in the retail industry. Dark stores combine the strength of online shopping with the comfort of a physical store to offer an optimal customer experience. These physical hubs — which can be housed in closed storefronts or large warehouses they face a new dilemma — innovate, or run the risk of collapse. are dedicated to e-commerce, but allow for associates to be on the floor showcasing products. With the addition of live video, associates are able to connect with shoppers safely and allow them to feel more empowered about making a significant purchase. It offers the level of personalized customer service only previously achieved inside the store.

In addition to customer satisfaction, retailers can reap many benefits from dark stores as well. Some retailers have opted to use these locations as fulfillment centers, allowing them to ship products more quickly. From a cash flow perspective, the implementation of dark stores can cut rent costs and boost overall profits. Retailers can maintain a space in cheaper locations, since curb appeal isn't a factor, and see an Average Order Value boost by up to 200%. Combining the customer experience and cost saving of this model, we can expect to see it become increasingly popular over the next six to 12 months.

The path ahead

After more than 8,000 store closures in 2020, and likely more to come, it's clear retailers must look to technology and other innovative strategies to forge ahead and engage with consumers. While we never foresee in-store shopping going out of style (once we've conquered the pandemic), customer behaviors have changed, and retailers must adapt to provide the full spectrum of options.

Technologies like chatbots and live video have migrated from an added benefit to a necessity. Customers will continue to look to online channels and interact with technologically-enhanced shopping experiences, and retailers need to follow their lead. Technology is not a threat to retail — it's the only way forward.

Andre Hordagoda is a co-founder of Go Instore