2021 JANUARY
WHAT WILL RETAIL
LOOK LIKE
POST-COVID
Written by Terri Fisher
Like most everything today, shopping has completely changed due to the coronavirus pandemic. Stepping into a retail store is drastically different now than it was even 6 months ago. And with the impact of this pandemic expected to last for years, retailers and shoppers will be adjusting to changes long after Covid has been contained.
There are so many trends changing the face of retail today. I would like to discuss many of those changes and how I see the future of retail after Covid is no more.
Some of the changes already in place are built-in distancing and product placement for speed along with bottles of hand sanitizer everywhere and extra masks for those who have forgotten theirs. Most retail stores today are designed to encourage shoppers to keep moving through the store and spend more time browsing. In the future, stores will change their product placement to facilitate faster, more streamlined trips. All of us to get in and out of stores as fast as we can and retailers will adhere to this wish. Brands want to discourage customers from touching things they don’t intend to buy. Many Target stores have already shifted to this way of thinking with two entrances: one for quick grab and go items and the other for more browsable items. By now, most stores have implemented social distancing with round sticker-like signage on the floors to keep customers six feet away from each other as they wait in line. Future retail stores could make distancing markers more permanent with different colors on carpets to mark where each customer should stand or different types of flooring to indicate waiting areas.
Recent months have seen an explosion of BUY ONLINE, PICK UP IN STORE orders. This gets the customers back into the stores but lets them shop at home, at their leisure. Stores had to quickly modify to add curbside pickup areas and signage, much like grocery stores have already in most towns. In the future, drive-throughs will be better integrated into physical stores with technology to deliver items without customers leaving their cars.
In the Post-Covid world we will definitely have SMALLER stores. As e-commerce continues to grow, physical stores don’t need as much space. They probably never needed that much space! Some retailers are turning parts of their stores into fulfillment centers until such point when they can down-size their stores. Smaller square footage stores also help brands cut costs during economic uncertainty.
Stores of the not-so-distant future will have to have improved air filtration and HVAC systems to potentially lessen the spread of germs. Another way to slow the spread of germs that you have probably seen is physical barriers to protect their employees at registers via plexiglass dividers. Stores of the future will find more creative ways to build these physical barriers between people without eliminating the personal contact and service that happens in stores.
Outdoor retail malls and stores will see an uptick in the future for sure. These spaces provide the best of both worlds – more space outside to allow customers to social distance, but still have access to multiple stores and items.
“Showrooming” will become more prevalent where customers will see set-ups in stores and then go home and buy online. Think IKEA who already does this.
Stores will figure out how to design stores that make customers less anxious while shopping. Think softer lighting, calmer colors and music, and more.
IBM’s annual US Retail Index study suggests that Covid-19 has effectively accelerated the shift to e-commerce by at least five years, boosting up some businesses while bankrupting others. Mall-based retailers, already struggling due to department store woes, saw earnings drop 256% in 2020’s second fiscal quarter, according to Retail Metrics. Other businesses such as grocery stores and home exercise brands like Peloton have been unexpectedly overwhelmed with demand. Any stores/brands with a strong e-commerce strategy in place are poised to reap huge rewards through delivering an omnichannel experience across stores, online, and social media. Amazon posted its biggest profit EVER this summer, with 40% sales growth over the year before. Walmart’s e-commerce business grew by over 97%. ON average, online sales were up 45% year over year.
Younger customers will change the business landscape as e-commerce continues to grow. Younger customers are more likely to discover and shop via social media, prefer to shop for sustainable and green products, and they shop to have an impact on the world around them. If you haven’t started pivoting your business to these new consumers, I think you’d better start quickly!
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I believe that local businesses will have new advantages in the Post-Covid world. Customers want to shop independent stores. Half of customers surveyed by Shopify look for independently-owned businesses to support for reasons including the support of entrepreneurship, experiencing good customer service, and most importantly to buy UNIQUE products. Almost 6 out of 10 are willing for shop at new brands or stores for the first time.
More consumers in the future will vote with their wallets. Again, according to Shopify data, 53% of consumers prefer green or sustainable products, and 49% respond positively to brands and retailers who make donations to causes with each purchase. Consumers main reasons for shopping at their locally owned businesses, both online and in stores, include strengthening the local economy, helping support local job creation, and investing in their community. This becomes even more important in the current exodus from big cities to the suburbs and even further out to the countryside where they can work from home in a more relaxing environment. States like Florida and Arizona are seeing real estate surges they haven’t seen in decades. New Jersey suburban homes are being bought up “sight-unseen” by New Yorkers scurrying to leave the big city. This bodes well for smaller, unique retailers in the future.
We don’t really know when this pandemic will end, and how people will feel after year(s) of isolation, but what we do know is that retail will be forever changed. And I, for one, think that is a good thing. It needed a kick in the pants.
Happy New Year,