The shape of retail to come

By June 9, 2020 Uncategorized

By Janis Healy, Retail Strategy

After months of shuttered storefronts, mandatory social distancing and a mass exodus to online shopping, many traditional retailers are hitting the panic button. Sadly, some simply aren’t going to make it, and those that do are going to feel the effects of the pandemic for a long time. So it’s really not too surprising that some are calling our present situation the retail apocalypse.

But COVID-19 isn’t the “death blow” to traditional retail that some people are proclaiming it to be. Ecommerce is an important, accelerating trend in consumer behavior, and COVID-19 has undeniably fueled mass digitization. But evidence makes it pretty clear that traditional retail is still going to be with us for the foreseeable future — regardless of doomsayers’ claims. 

In 2019, ecommerce accounted for about 16% of retail purchases. While COVID-19 certainly has boosted these sales, ecommerce could triple in size and still not even represent the majority of retail purchases. And online shopping would need to increase more than 600% in order to supplant retail altogether — which just ain’t happening. Rest assured, brick and mortar will continue to be an essential part of the brandscape as we move into the future.

However, retail has undeniably been deeply affected by COVID-19. Most in-store sales completely disappeared for a few months. Customers are focusing on necessities like food, household items, and health care products, and many have moved shopping for such essentials completely online. Curbside pickup and BOPIS (buy online, pickup in-store) are now essential parts of a successful retail strategy. Fashion and trend products are taking a back seat (though we hear that sweatpants sales are booming). Most athletic events have been canceled, which has stifled demand for sports products aimed at little league, soccer and the like. Evidence from China has shown that many customers will avoid malls and crowded locations — malls remain empty despite their reopenings there. So how is a retailer supposed to respond?

Mary Beth Laughton, CEO of Athleta, puts it this way: “Stores of the future are going to be centered on a few key things. One is convenience and choice: things like curbside pickup or buy online, pick up in-store; easy mobile checkout; easy returns; online returns [processed] in physical stores. Stores will also be more focused on community and connection. The reason someone would get off her couch will be for the personal interaction with store associates, as well as being able to meet up with other customers.”

Laughton touches on two crucial elements of a successful post-COVID retail experience here. The first is primarily logistical — and COVID-19 has only made such shifts more glaringly apparent. Modern customers rely on a combination of digital and real-world brand touchpoints when making purchases, often hopping back and forth from one to the other. Winning retail strategies need to allow customers to move seamlessly between the two — which doesn’t happen by accident. 

The second part of her statement gets to the heart of what it means to be human. If COVID-19 has proven anything, it’s that humans are still intensely social creatures. Zoom fatigue is a thing. We long for real connection, not just digital substitutes. When a well-curated retail experience delivers face-to-face human interaction or provides a sense of community, retailers can deliver value in a way that online shopping never will. 

The brands that will be hurt most by COVID-19 are those retailers who continue to try to do what they’ve always done because it’s how they’ve survived in the past. Such retailers will cease to exist. In the post-COVID retail landscape, brands needs to provide a completely new kind of experience. And we’re here to help.