Market Movers Discussion about COVID-19’s Impact on Customer Shopping Behavior and Retention Strategies

Al Lalani, Co-Founder of Annex Cloud speaks with Praveen Pahwa, Founder & President, Pragiti, a DMI Company about the “New Normal”, the importance of capturing customer data and the impact COVID-19 has had on customer shopping behavior. Plus, what it means for brands who are acquiring necessity-based purchases and ways to ensure they retain those customers.


Al Lalani:

Hi, everyone. Welcome to another session of Annex Cloud Market Movers, where we bring together industry experts, luminaries, to guide us through these tough times. Today with me, I have Praveen Pahwa, he's the founder and CEO of Pragiti, which is a great partner of Annex Cloud.

Praveen, welcome.


Thank you, Al. A pleasure to be here.

Al Lalani:

Awesome. Praveen, we are in a very interesting time. I've been talking to several industry experts and helping us get our common customers and guide them through these challenging times. The good news is things are starting to open up just a little bit, but it's going to be a few months before it starts to get anywhere close to normal.

So as we've come, or we are getting towards the end of that initial shock mode, and starting to adapt to a little bit of that new normal, whatever that's going to be, people are starting to create some short term plans. What am I going to do in the rest of 2020? Whether my brand's doing awful and then I have to get out of it, or if it's some brands it's doing well because of this change. My first question to you is, what is your advice to brands in the short term in the rest of 2020 to adapt to this new normal?


Well Al, at this juncture, my advice to brands is the plan. What do I mean by that? If you look at it, there's an old saying that when there's a storm in the sea, what do the fishermen do? They stay back and mend their nets. This is, they prepare for the future, they prepare for tomorrow, they prepare for the next time they're going to be at sea. So my advice to clients is, at this juncture, mend your net, create a larger net and prepare for the future. The world is changing. Your clients, your customers have changed. What you need to do is prepare for the time when things go back to the new normal, and they want to come back to you, you must be prepared for that. That's really the prep, right now.

Al Lalani:

So, the key message is, as you come out of the shock, start preparing because it's going to change and you have to do the prep work for that new normal. That's awesome.

One of the big things that people have to prepare for, especially if they got taken by this new normal, and they weren't fully digitalized, or the digital transformation within their companies had not yet been completed. That could mean different things for different people. But specifically, as we think about from this side of the angle, from a digital transformation perspective, we think of retention being a key portion of that digital transformation, because the marketers now will have less budgets. They will have less resources, potentially. They will want to deploy budgets to start focusing more on getting back to their older formation of growth. To us retention is very important in that economy where you don't have the same dollars, but you want to reacquire or retain your customers.

From your perspective, how do you look at retention in this new economy? How important is it? How do you advise brands on thinking about that?


In the short run, Al, brands are trying to retain their customers based on the immediate value that they provide, which is in terms of the product, so people are not really going out and buying sunglasses and new dresses, because they don't have any place to go with the new sunglasses or the new dress, but they are interested in buying important things for them, essential products and essential services.

Now, even in those essential products and services, those brands and those retailers and those, even mom and pop stores, that have adapted, and have looked at a life beyond this shutdown, have been doing extremely well. I'll give an example. I went to this office coffee shop, because it's the only one open, and they only have to-go available. I bought some coffee, I bought some beans and they gave me a small card and said, "We will open at some stage, but when we do open and you come back, it is $5 off." Now, they have made sure that I will go back into their store at least once when the store opens. That could be in June, July, or it could be in August, September, but I have that $5 off.

In other words, whether it's creating loyalty or retaining loyalty or adapting to the new normal, those retailers, those brands, those manufacturers who do that are definitely going to survive and they're going to retain their customers. Those who do not, those who wait for, let all of this nonsense get over, and then I will decide what I want to do, they will have a really tough time.

Al Lalani:

I think these are two really good points you bring up. If I may summarize, one was about discovery. People aren't going to discover new products. I told my wife, I probably am not going to buy another pair of jeans because I think I have too many sitting at home. And if I do, I probably am going to buy from a brand I've bought from before, because now it's probably not the time for discovery.

The second thing you mentioned is about necessity. You went to that coffee shop because that was the one open. So you did something out of necessity, now, how will that coffee shop ensure that they are going to retain you as a customer? They gave you an incentive. Now you have that in your head, so the next time you are ready, you will now consider them again, and not just because this time around, because you have to go there for necessity.

One of the examples I've been giving other people is my favorite brand of pasta is not available in the stores anymore, because they have distribution issues. This is a large brand I won't name, but I have to buy something else out of necessity. Grocery stores, that's happening a lot. A lot of new emerging brands are being tested while the favorite brands are out of a distribution or not available. And because of that, they're gaining those customers, but they need to associate with those customers, they need to capture your information, which I hope that coffee shop did in some capacity, and if they didn't, they should. Then secondly, once they capture your information, they need to give you something to associate yourself so that you do buy again when this all is done.

When their favorite brands come in, or your favorite coffee shop opens up, will you remember going back there? So for brands that are getting these necessity-based purchases now, how will they retain them? Those are two very, very good points. Thank you, Praveen. This is awesome.

With this happening, going a little bit further, right? Brands are still in a shock mode. The first thing when you're in shock, is you go into your shell. You say, "Listen, I'm just going to shut down. I'm going to do nothing." That's usually ... Other recessions in the past have shown us that investments that were made in those recessionary times were extremely important, bringing people out of those recessions. Back in 2001, back in 2008, several people have talked about that. But your first intuition is to shut down.

What are the risks you foresee if people don't act on this if people don't start creating and thinking about how to adapt to this new normal, what are the risks that you see that will come? That's my first part of the question.

The second part is, we still have to be empathetic to our customers, to our employees, while this is still happening, because it's not done and over yet. So how do they act on something, but yet at the same time be empathetic to their customers and to their employees?


Let's see if we can break up this question into a number of areas. If retailers and brands are not going to be investing, in my opinion two or three things. They are going to have a very, very tough time when this new normal emerges.

Number one. If you lose customers now and the customers go away somewhere else and that somewhere else gives them a bit of brand experience, as well as creates some sort of loyalty, like that card that I spoke about, you are going to find it difficult to get them back. It's very easy to lose a customer. Very difficult to gain one customer. So, at this juncture, every business should be looking at a way in which they can continue to retain their customers, period. Do whatever you need to do to retain your customer. Point number one.

Point number two. Somebody who's getting your business or your share of wallet today, and is probably doing a better job, is also gathering customer data. They now know more about that customer and what did that customer buy in these down times, than you do. So, as you retain your customer, put in place a system that also tracks customer cooperation, what that customer wants. What does he buy? Where does he or she spend? Get that data in place. And as I said earlier, get prepared for tomorrow.

Contactless delivery is here to stay. Now, it does not have to be delivered by a drone every time. Coffee shops have adapted very well where they keep it on a rack and you just go and pick it up. It could be as simple as that. But, whatever you do, plan for the future, create a system by which you get more data about your customers and for God's sake, retain your customers, keep them back.

Now, you don't support your customers and serve your customers, and at the same time have a very skeletal staff to do that and mess up with your employees. So you've also got to look after your employees. You also got to make sure that you don't lack your staff to a certain extent, that the service to customers gets impacted. So it's a balancing act, no question about it. I would say the loyalty that we keep talking about, which can be quite fickle, that loyalty cuts to employees, as well as your customers.

If you can come out of this COVID-19 situation with your customer base pretty much intact, or maybe even expanded your customer base, and your group of employees intact, nothing can stop you. Of course, you should have and you would have prepared for the future. I think the future belongs to you.

Al Lalani:

Praveen, those are very, very strong points. I can probably recap a lot, but I think I would advise people to re-listen to your message because there are so many nuggets of gold within that message. So Praveen, I really appreciate that.

I think in terms of the discovery of products, my next thought is a little bit about discovery. I mentioned people are discovering out of necessity. These discoveries are happening probably outside of the brand's experience now. A lot more of that is happening on social, because ... I know I'm sharing with friends new products that I've discovered and found and have a new found love for. As it comes to growth, and as it comes to the re-advent of social as a format for discovery, how do you foresee this applying to the commerce world moving forward, especially with, now, people doing a lot more offline mechanism discovery where you don't ... a brand doesn't fully control that experience completely?


You're right. The brand doesn't control that experience, but they can definitely participate in that experience. Social media has today taken off. People are doing personal engagement in terms of, "Hey, look at me, I cooked this cake." Or, "See what my daughter did. She did a TikTok video." On the other hand, people are also talking about business, and how it's impacting them. People are talking about the coffee shop that is open. People are talking about where they can buy stuff. A month ago where TP is available since everybody was rushing to get that.

Participating in that and leveraging that is going to be very important. Retailers and brands that have an ear to that interaction can monetize it, can leverage it, can maybe even participate in a, hey, somebody posts their sunglasses on social media, and you'll provide a quick way to be able to purchase directly from that feed. That's going to be big for customers. Somebody is talking about a cake that they baked and the grocery store that says, "Hey, the ingredients of this are all of this, and I have this available for a cake for, I don't know, four people. A recipe completely converted into a shopping cart or a shopping basket. They'll go purchase, have it delivered it in one hour. Fantastic. This will continue to happen. I think the commerce on social media or leveraging social media will get a new meaning as we continue in this issue and as we come out of it.

Al Lalani:

Convert the thoughts. Convert the discovery into participation. Participation into cart. Cart to sale. That's the age-old mechanism, becomes even more important now, because now people are part of something. Doing this offline and you can convert that to potentially online down the road as well, which is great.

We talked a little bit about the short term. We'll get out of the shock, we will start focusing on our existing customers, we'll start retaining those customers. That will be where 2020 is. Getting out of the shock and getting back and adapting to the new normal. At some point in time in 2021, maybe even late 2020, people have to start thinking about growth again. They have to start thinking about how we can get back to what we were essentially. But at the same time, they've realized certain things that they didn't do before they should have done. Now they can make longer-term investments that they probably won't be able to do in 2020, I guess.

What are those long term investments that you would advise them to start thinking about potentially that you have seen as outcomes? Couple of things you've mentioned, by the way, for example, curbside pickup. If they don't have that ability ... These are features, by the way. Curbside pickup, if you don't have the ability to do that, I've heard other people say, "Ship to store." If you've got stores, they were closed, how can you leverage stores with the social distancing? You've got ship to store functionality, and then that's important to use your stores to deliver products, right?

So those are maybe smaller features, are there other things that brands and retailers can start thinking about for 2021 as they start further adapting for longer term investments?


Yeah. So, 2019, Pragiti does commerce sites for brands and retailers and we help them digitalize their business. In 2019, their customers used to say, "I want my product when I want it, where I want it." And that, where I want, was limited to a store or a device. Nobody looked at things like touchless delivery or contactless delivery. Nobody looked at a scenario like a virtual try-on, whether it's a lipstick or sunglasses or shirt, for that matter.

Today, customers are going to be concerned that the shirt that I'm going to try out in a mall, who else has touched it? Right? And, is there lingering virus on that material? Nothing that the retailer says and does will take that part away from, at least some, consumer's mind. So how do you enable that? So I want to be able to shop from the safety of my house. I want the product delivered in a safe manner, and at the same time I want try it out and see how I will look in this product, how this product looks at me. That will become a very big element of the purchase and buying behavior in 2021 and beyond.

But that's one. The models in which you engage. We spoke about social media. We spoke about creating data about our customers. Everybody wants to ... when customers walk into our door, virtually walk into our door, they talk about saying, "I want to be the Amazon of my industry." What does Amazon do very well? They get you the product that you want, when you want it, in a model that is convenient to you, and at the same time they have your data. So in 2021, 2022, you must look at what your business would be in that time, how customers will buy from you. Adapt to it, get customer data, create loyalty, create a system by which they keep them coming back to you. Ensure that the brand experience is stellar, better than what it was yesterday, and yet it will be better tomorrow, and customers will keep coming back.

That's why customers keep coming back because the experience is fantastic, the value provided to them is fantastic. The value could be $5 discount card, or the value could be, I am the safest player in the industry of which you can interact. It doesn't matter or it will be a combination of all of these. But businesses ... our advice to businesses in 2021 and beyond is, prepare as if this COVID-19 situation is still continuing and you want to grow, how will you grow? Get into a model, prepare for it now so that when we come out of it, you are the firstest with the mostest. You are the mover in that market. That's what we are trying to do with our customers.

Al Lalani:

Thank you, Praveen. This was an amazing discussion with you. I do want to mention that we have a common offer with Praveen and his team at Pragiti. If customers, our common customers, want to start a retention program, we will allow them from Annex Cloud side, we will waive the implementation fees for Annex Cloud, and we will also give them the first three months free. So that means they can jumpstart, get a retention loyalty program up and running on the Annex Cloud side with no costs. I just wanted to mention that as something that's available. If you want to avail of that offer, please check out the link in the comments below when this video is released.

But Praveen, I want to really thank you for joining us today. For everyone else, if you want to check out other videos, go to https://www.annexcloud.com/marketmovers.

Praveen, thank you very much.


Thank you, Al. Thank you for having me. Bye now.

Featured Speakers


Al Lalani

Co-Founder, Annex Cloud

Brian Beck

Praveen Pahwa

Founder & President, Pragiti, a DMI Company

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