We’ve all seen the news about the toll COVID-19 has taken on physical retail stores. But what these stories neglect to say is that the pandemic and its many effects on customers is the engine that’s about to bring brick-and-mortar stores roaring back.
The vaccine is here (hooray!) and as the world’s population receives their shots and the danger of Covid dissipates, people are going to rush out of isolation, eager to re-engage with everything they’ve missed this past year. They miss going to movies, sporting events, restaurants, and they really miss shopping in person.
This is a unique moment in time we call the “welcome back opportunity.” But how big will this opportunity be? In its annual forecast, the National Retail Federation anticipates that retail sales will grow up to 8.2% in 2021, reaching more than $4.33 trillion.
But where things get even more interesting is when you realize that customers rushing back into stores won’t be the same shoppers they were before. These are people who spent the past year falling in love with digital commerce. They have entirely new expectations around convenience, personalization, product selection, and customization—expectations brick-and-mortar stores better live up to, or else.
The roaring 2020s
Peter Cohan, author of the book “Goliath Strikes Back: How Traditional Retailers Are Winning Back Customers from E-commerce Startups,” is anticipating a period he’s calling “the roaring 2020s.” He anticipates a boom in activities that bring us together socially, such as concerts to cruises, sporting events, air travel—and shopping. “People are basically a whip ready to uncoil,” Cohan said, according to media reports.
One of the pandemic side effects powering this whip is the surprising amount of purchasing power within the customer base. As Cohan notes, a sizable number of households remained employed during the pandemic and, at the same time, cut their expenses. They now have record savings and record-low debt. Their stock values are high and their home prices have risen. Thanks to government support, interest rates are low. It all adds up to a lot of money ready to be spent on things like retail.
Smart brands and retailers see this opportunity and make moves to capture this capital and satisfy evolved expectations and demand. To do it well, they are focusing their energy on three key retail experience principles.
1. Have a brick-and-mortar store
It’s the human touch that people have missed after the past year in pandemic isolation. Customers long to personally see and touch products, and they want the reassurance of talking directly with a sales associate before they buy. For evidence of the critical value of this physical interaction, look no farther than the many pure-play digital brands and retailers that are rushing to extend their brand by creating physical stores. In the U.S., Mented Cosmetics, once a brand sold purely online, has expanded its physical presence in Target stores to over 290 locations across North America. In Canada, the digital brand Versed Skincare is creating a physical presence in over 1,000 Shoppers Drug Marts. Even Amazon is extending farther into the physical world, opening its first brick and mortar grocery store in London.
2. Digitize your physical store
Simply having actual products and real people for customers to interact with inside a store is no longer enough. Thanks to the pandemic, customers now have vastly different expectations. After a year of shopping online, customers expect retailers to know what they like, remember their past purchases and allow them to browse and virtually try on an endless aisle of merchandise. If your brick-and-mortar store doesn’t behave like your website, shoppers will go someplace else. Loyalty simply isn’t what it used to be. In a study by McKinsey, 73% of U.S. shoppers explored new brands during the pandemic and up to 83% of them report they will continue to do so.
3. Make your store feel special
It’s not enough to recreate digital shopping in a physical store. To capture this rush back to retail and command loyalty, you need to give these next-generation shoppers a singularly unique shopping experience. Look at what some of the world’s leading brands are doing to surprise and delight their brick-and-mortar customers.
In Shenzhen, China, Burberry created a “social retail store” where shoppers can unlock new content and personalize experiences via smartphones—but only while they’re in their store. In the New York MAC Cosmetics concept store, customers can virtually try on makeup in a full-body augmented-reality mirror. When they see a look they like, shoppers can save it to their digital profiles, which they can access from home.
Or consider the many luxury retailers that equip their sales teams with clienteling devices. The devices use behavioral data to make smarter recommendations for customers. These devices also help sales associates recognize their highest-spending clients so they can reward them differently.
Welcome to the brick-and-mortar digital rebound
Now is the time to invest in a physical retail future. Yes, in-store sales fell off a cliff thanks to the pandemic. But the rush back to in-person retail is coming. Customers are craving an experience that gives them both the physical interaction with your products and people—and meets their new “digitally centric” expectations. The brands and retailers that recognize this opportunity won’t just survive the pandemic; they will thrive in the months and years after it. This is not the end of brick and mortar. It’s the rebirth of physical shopping and the start of an exciting, digitally-powered new shopping adventure.
LiveArea, part of PFSweb Inc., offers marketing, web design, connected commerce, product prototyping and testing services to retailers.