How will Retail look, in 2 weeks, 2 months, or 2 years from now?
As a passionate retailer of nearly 30 years….. I have seen some changes in the retail landscape in my time, but certainly nothing as unprecedented as this time right now. It is has forced us to rapidly shift thinking, embracing a new kind of reality in how we consume product and services amongst an isolating and confronting health crisis.
Falling foot traffic and a trebling in demand for online and contact-free click and collect is a new normal. Consumer behaviour in relation to our shopping and general content behaviours and appetites has had to shift significantly in the past month, and so too has our retailers had to adapt with lightning speed, in order to capitalise quickly on these forced trends.
It is a new kind of comfortable, at least for the short term, until we start to interact again, touch and feel, experience, be entertained and generally get a hit of our retail therapy once again, visiting all our favourite physical bricks and mortar stores.
The Covid-19 crisis will have a lasting and devastating effect and stress on the economy and most significantly across the retail sector, with consumption being forever altered, perhaps some may say for the greater good of our planet.
So how will Retail evolve post crisis?
We will see more reduced store footprints
It is predicated that large format retailing, will be considered a luxury and quite simply a waste of space. We have seen pre-Covid, retailers such as David Jones, looking at smaller and more bespoke geographically designed stores.
Moving forward, large chain retailers will be forced to re think the geographical locations and size and scale of their square meterage, in order to maximise ROI. This will see consolidation and closures of some doors across all cities and regions
We have all proven that our networks, supply chain and appetite for online shopping can suffice…..so it would therefore make sense that we continue to have a smaller footprint of physical stores. Ones that are strategic high profile and foot fall locations, still open for all of us that want to enjoy the physical experience. But it will take time for customers to re-engage back to Shopping Centres in droves again and with confidence, and so the direct-to-consumer will be a slow re-emergence. But when they do, they will be so much more demanding of our retail spaces and services. More theatre, more experience and more reason to part with their valuable dollar.
More mixed retailing and collaboration spaces
We are entering the new age of retail. It has been somewhat volatile for the last few years, and we have started to see a shift in shared spaces and collaboration… Collaboration for innovation and cross-sell.
I expect to see retail spaces converted and re imagined to accommodate partnering with top baristas, bakers, chefs, authors, artists and other brands to collaborate in bringing a mixed service and retail customer experience to life. More time to dwell and truly embrace a new pace and offering. It is the way forward, keeping our consumers in store longer, and what better way than providing deeper services that fill their needs, such as Wi-Fi, good working spaces and great coffee, as well as your products.
Working together is absolutely the way of the future. So think rent-sharing, cost-sharing, staff-sharing and mixed product offerings and services. It’s a time to think outside the square, so to speak, and re think a new experiential life of retail, that can bring a holistic view to working and shopping, as we start to invite people back through the doors post Covid-19.
The ongoing growth of ethical retailing
B-Corp brands and social enterprises will continue to grow and win the hearts and minds of consumers. Consumers are shifting their desire to need more stuff, steering away from land fill and highly disposable fast fashion labels. Ethically sourced and produced all the way through the supply chain, is our future. With block chain technology we now have traceable supply chains.
Our generation Z as we know, demand so much more from our retailers, aligning themselves with brands and companies that have purpose and meaning. They seek out brands and unique designers that align to their own personal values. They are educated and ethical in the way they think and shop, enticed by big brands that speak to and design with purpose and sustainability front of mind.
Continued growth with our mature digital customers
A more connected mature audience is prevalent and on the rise. While marketers and advertisers have been trying to capture a generation of millennial consumers for years, and are just now setting their sights on the up-and-coming Gen Z, Baby Boomers have remained a force to be reckoned with when it comes to spending, and a lot of it is done online. We are seeing large numbers of our mature age, being forced in to the new age of digital and adopting very quickly. This then creates and opens the door of opportunity to increase a digital and e-commerce offering specifically targeted at our middle-aged or baby boomer segment of customer.
Now is the time to innovate, possibly re-invent your brand, seek a new target audience, or perhaps re think retail in such a way that captures the attention of baby boomers, helping them access products and services they may have never used before.
This will create an opportunity for new habits and the reduction of fear around online ordering for our increasing sector of consumers.
A deeper understanding of supply chains
Companies that rely completely on manufacturing in China may start to think twice about this, considering what would happen if another pandemic was to set sail across the globe. Diversification is now common across all sectors, and increasingly so across all SEA markets.
It will be likely that brands will expand their manufacturing efforts to places such as Cambodia, Indonesia, Malaysia and India in order to ensure supply lines can continue to meet the increasing demands and a far more competitive pricing model, compared to the ever inflating COG’s out of China.
Social enterprises and business that source products from more unique and or network of artisans across the world will also need to think more deeply about how they can keep their businesses afloat and support the livelihoods of the people who have previously hand-make their products.
Retailers should also be thinking about the impact these massive changes will have on the customer and the customer relationship. How will you maintain trust in your brand and your products and services? How will you reset expectations for today?
And how will you recover the customer experience in the future? Its time to think about new extreme retail marketing and innovation NOW....
In this environment, shoring up the customer relationship is just as important as shoring up the bottom line.
By: Carolyn Heyward, Group People and Operations Manager