3 Ways The Coronavirus Pandemic Will Change Retail Forever

By Bob Phibbs

South Coast Plaza June 14, 2020Everyone is looking for how the long-term effects of how the pandemic will change retail forever; especially in brick and mortar stores.

Not that many weeks ago, retailers were anxious to just get on with opening their stores. But now that they are all open, they know that unlocking the doors was the easy part.

Though many reported success during the pandemic - notably hardware stores, pet stores, and bike stores, most retailers were deemed non-essential and forced to close for weeks and months.

10 Reasons To Be Optimistic About Retail After COVID-19

Here are three retail trends that will impact retailers as a result of the pandemic closures, and the news is grim but read to the end to find the hope.

  1. Malls are in trouble. The glut of money used to open malls at every offramp was never based on demand but because of the availability of cheap Wall Street money.  But mall traffic has been declining for years because fewer shoppers want to go to a cookie-cutter mall with the exact same stores that are now in trouble - jewelry stores like Kay and Zales, stores like GAP and Victoria’s Secret,  department stores like Macy’s and JCP, and even restaurants as CPK and PF Chang. Rents are bound to fall and the whole “beige-ing” of the mall has now put them in jeopardy. The same 3’x4’ window signs touting the same stale coupons, the same friends and family promotions, and the same exact color story as every other store is also why traffic has fallen. Many retailers did not pay rent to mall operators during the past few months and store closures are looming by the tens of thousands. On top of that, shoppers are carrying every mall on their smartphones and have the ability to find anything at most any price point.
  2. More people are working from home. Stats around Zoom show more than 300 million daily meeting participants spent 2 trillion meeting minutes - and most of those from home – and that was just for April. With fewer people driving around, taking public transportation, and going to downtown locations, there will be less activity in many downtowns and on main streets. With fewer meetings and trips, demand for apparel will fall but the home- goods market is expected to remain strong.
  3. Digital has its limits. Bloomberg carried the headline, Americans Return to Car Dealers, Thwarting Expected Shift Online. While initially online car purchases surged, shoppers are returning to showrooms as the economy reopens. The same pattern is unfolding in food, with Americans going back to neighborhood grocers and restaurants after dabbling online.

What to make of this Coronavirus Retail news?

As much as the digital-nativists proclaim online is a done deal and no one will return to stores, just this week many apparel stores also reported solid sales performances including:

  • American Eagle Outfitters reported that sales productivity was at 95% at its reopened stores.
  • Burlington Stores, sales were ahead of last year’s levels at its reopened stores.
  • Even Gap Inc. reported that reopened stores in North America generated sales at nearly 70% of their performance a year ago, on average across its banners.

So is the worst over?

No, the pandemic will change retail forever.

Here are three things that have to happen for retail to regain its strength…

Keeping Associates Without Skills Needs To End

Shoppers come into your store to buy and browse, to try things on and to turn things on. They go online when they know exactly what they want.

Say I need an HP 54 cartridge for my printer. I’m probably going to order that online because I don’t need to go in and ask some guy with a ring of keys to unlock a case, hand it to me, and ask me, “Anything else?” I can buy that one item online much more efficiently.

But if I DO go into the store to get that cartridge, the mistake many retailers are still making is assuming that is ALL I came in to get. They stupidly ignore that I’m open to discovery and suggestion. After all, I could have gotten what I wanted online. 

With less traffic, you can’t have any associate on your floor who can’t suggest complementary items and associated merchandise to help make the in-store visit more authentic, efficient, and profitable. Those who can’t must be relegated to warehouse workers or stockers... or let go altogether.

Retail used to be the great democratizer, anyone could ask, “Can I help you?’ and get away with it. Not now. The connected consumer knows what they want and while they know what they want, they still are open to being persuaded to better options.

I sold shoes in college. If I wanted to eat, I had to sell. So, if I went to the stockroom and if I didn't have a nine in the style my customer wanted, I had to quickly pivot and find two similar choices to show them because otherwise I wouldn't make the sale.

Nowadays, most employees would simply say the tablet says we don’t have it; We can ship it to you. The problem is, the sale isn’t complete until it is tried on.

The goal is to get a satisfied customer today, not to kick uncertainty down the road – or online.

Employees still have to be able to engage a stranger, discover why they're there, and then ultimately get them to want to buy something from you. Shoppers want retailers to understand them in a deeper way, not just in communications but also at the store level, particularly as emotional or tense situations arise. 

Every associate and manager have to come to work every day and feel they own the success of the store and if the store doesn’t succeed on whatever level, it’s their fault. We must reward responsibility and accountability and not length of service.

Merchant Mentality Needs To Return

There is a big difference between someone who owns a retail store and a merchant. A merchant is always looking at how to improve the turn of their merchandise, how to raise margins, and how to improve conversion rates.

That knowledge and focus has to be learned by retail store owners who expect to survive in the post pandemic world.

In short, your employees and smart merchandising can do a lot more to grow sales than curbside delivery can.

Lana Negrete Fernandez, whose family owns the Santa Monica Music Center in Santa Monica, Calif., told Adweek that for major purchases, like a musical instrument, seeing and feeling the item in question ahead of actually making the purchase is a major part of the shopping experience.

“We can’t say, ‘Oh, you’d like to buy a $3,000 saxophone? Well, look at it on the internet and we’ll toss it in your car from the curb,'” she said.

Brick and mortar stores are the hub of a profitable business, but the story of winners and losers will come down to merchant skills like investing in technology and innovative approaches to customer acquisition.

Oh, and those who have never worked in a retail store have got to stop creating training programs.  Employees have to learn more, and merchant owners have to hold them accountable for doing the right things.

Cleaning dressing rooms and sanitizing after every customer is a distraction which has to happen, but creating strong customer relationships is really what’s important and that comes from a merchant mentality.

Digital Innovation Must Be Embraced 

While many retailers found Facebook live videos lifesavers for connecting with customers online, moving forward will mean embracing technology to be able to sell remotely. Using hardware like Dten.com and connecting to advanced POS systems like Shopify or Springboard Retail will help you sell online using video to stay connected with shoppers.

Forget messaging or selling over the phone; the way forward is click-to-start-video chat.

Instead of waiting in your store for someone to walk in, be available online where the journey starts and you can use all your rapport skills to get the sale.

To do this, you’ll also need to offer product transparency online. Shoppers won’t leave their home unless they know you have the product they need. That will involve more sophisticated tracking of inventory and regular checks to monitor inventory levels.

Digital will be the way you know why customers come to your stores and why they stop coming. 

The opportunities right now may never been greater, but for existing retailers, now is more like opening a new business than restarting.

See also, Are You Missing These 4 Key Retail Sales Training Tips? 

In Sum

A bright spot in these retail trends? While you can work alone at home, you can’t work as a team alone. I suspect many companies will find Zoomfatigue will set in, but it doesn’t change the reality at least in the near term – there are less trips to your store's neighborhood.

Your shopper has gone online to work, shop, and get food. We must follow and engage them there before they will return to anything like normal behavior.

While the retail industry was forced to add tech tools during the virus shutdowns, we need to be careful of predicting shoppers have changed for good.

As malls and landlords reduce rents, a new wave of smaller retailers, restaurants, and boutiques will reinvent the mall away from big and homogenous to unique and curated. In the long run, that is better for everyone.

We have to remind ourselves in the near term, it’s still going to be a day-to-day struggle.

You have to remind yourself that you’re in the hope business. If you don’t give it to your employees, they’ll never give it to your customers. If you can do that – especially with fewer shoppers coming in the doors - you can still survive to see the next holiday season.

You can now get over 100 retail sales training lessons to leap over your struggling competitors on demand from me. Covering handling objections with one simple tactic, what to say to greet shoppers to get them to relax - and what will spook them, handling different personality styles, how to adjust your body posture when selling and much more. 

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