After Covid-19, business will undeniably change. It is expected that thousands of stores globally will never reopen due to the impact of the pandemic. With the imminent impact of physical store closures around the world, what will be the future of the omnichannel retail model?
It hasn’t been the same for everyone.
Whilst many retailers have suffered, others have thrived. There was rapid and dramatic surge at the outset in pharmacy and grocery retailing, and massive increase in sales for businesses supporting a stay-at-home lifestyle: home office equipment, personal fitness items, home improvement and hobbies.
There was an immediate plunge in demand as a result of public health restrictions which saw stores and fulfilment centres close, and consumers dealt with job losses.
Many fashion retailers have transferred all business to online only to offset the impact of store closures, but it has not been without challenges created by the stresses on the fulfillment sector.
But what will happen after?
People crave a physical experience, but it might need to be different.
If there is one thing that everyone has learnt from this time, it’s that while online shopping is incredibly convenient, humans still want to be connected in a physical way.
In speaking to our retail clients, there is a strong feeling that once social distancing rules are relaxed, and stores open again, people’s expectations for a diversity of shopping choice will most likely increase. Shoppers in re-opened stores may be cautious at first, but with many of them having converted strongly to online, they will be looking for physical stores to provide the missing element of the digital experience.
According to Chris Field, Retail Analyst and Chairman of Retail Connections, There may be fewer stores after the storm, but having the option to enjoy the blend of offline and online will continue to be a huge consumer driver. Far from coronavirus accelerating the retail apocalypse that has been predicted in recent years, I’m optimistic that it will actually be a catalyst for store resurgence when normal life and all its freedoms return. In fact, I believe the crisis will drive a much needed change in the retailer/landlord relationship – great news for those championing the omnichannel model.
How will these stores be different?
At GOC Retail, we think that it is most likely that the brick and mortar landscape will have many changes after this time. There will be re-assessment by retailers about how they distribute their shopping channels across the digital and physical, but brick and mortar stores will not disappear. There will be evolution with more focus on services such as Ship from Store, e-reservations and Click and Collect to satisfy the returning shopper, who has most likely changed as well. They will want to keep the online convenience, but expect a tighter blending of digital and physical retail experiences.
Physical stores will have to work harder – potentially operating as distribution centres, showrooms and point of purchase.
Authenticity of retailers as a brand will be even more important, and they will need to inspire and lead by example. It’s likely consumers may be more sensitive to the old consumption habits. We think there will be a rise of the conscientious consumer, who will be more demanding of brands to practice good social responsibility.
If you would like advice on how to prepare for the new normal, then let us know. You can reach us here.