Is Retail Landscape changing for good?

  • Jul 10, 2020 AEST
  • Team Kalkine
Is Retail Landscape changing for good?

Summary

  • Post-pandemic, the retail industry would emerge with a hybrid of online and physical stores serving as a key to sector’s recovery.
  • To adapt the new consumer behaviour, retailers would need to assess their omnichannel models and find opportunities to innovate and fill the gaps.
  • Forward-thinking retailers are now focusing on creating unique experiences that not only let customers find what they need, but also be entertained during the shopping period.

Coronavirus did not destroy retail sector or put an end to brick-and-mortar stores; rather, amid lockdown and social distancing, it made people realise that they would always need physical stores.

You must be wondering how that would be possible, when online marketplace has been giving convenience of shopping from anywhere at any time.

Well, retail stores are offering more than just products.

Do you often go out with your friends or family members to buy products?

In contemporary world, physical stores are serving as an escape opportunity and social gathering place in addition to being a hub of products. People are stepping out of their households to not only buy products but to gain unique in-store experiences.

Taking this into account, forward-thinking retailers are now focusing on ways to create unique in-store experiences and entertainment along the way. That said, the stores have now begun to re-open, and retail sales may start off slowly, with the emergence of numerous questions.

How would retail stores reshape themselves amidst social distancing norms in place? How would the landlords and owners plan and manage space? With the dropped in-store sales, how retailers would engage, with the people and increase their footfall?

Did you read; Retail Turnover Increased by 16.9% in May

Let us now deep dive and get acquainted with answers to all the above questions.

Owing to the outbreak of COVID-19, physical stores sales took a massive hit. However, with eased restrictions, many retailers are re-opening their physical stores.

Must Read: Spiral for ASX Retailers, Re-Openings and Jump-Starts

Owners of retail stores would strive to return to normalcy, but multiple shoppers and retail workers would not feel secure without proper safety precautions in place.

To ensure safety of workforce and customers, retailers have to adhere to strict government guidelines. Retailers are making new arrangements to follow physical distancing, which means there would be an-

  • Occupancy limit with a minimal number of people in stores at a particular time,
  • Electronic doors and foot-handles making hesitant shoppers more comfortable,
  • Strict cleaning regimens,
  • Contactless payment options that would keep consumers engaged with a high level of protection, and
  • Stores would remain open with restricted time.

Also Read: Would You Consider These Stocks in Your COVID 19 Equity Shopping List?

In a nutshell, now retail shopping via physical stores would be a different experience, with employees wearing a mask and periodic sanitisation in stores. 

Even though numerous retailers have made a comeback after lockdown, there are many who could not survive; considering current circumstances, if retailers have been falling apart, they would not be replaced overnight.

So, landowners would need to think outside the box, be creative and test out new ideas to fill up those vacant spaces immediately.

Did you read; Online Business Models come to the rescue of ASX Retailers amid COVID-19

In the meantime, instead of searching for a permanent tenant, commercial space landlords can monetise the retail space for short-term by offering space for pop-up shops and keep the foot traffic flowing.

Are you wondering what these pop-up stores are?

Pop-up shops are temporary retail spaces that sell products of any kind ranging from food and fashion to art and tech gadgets. Pop-up stores come in all shapes and sizes and are often characterised as creative and engaging.

Having said that, retailers experienced immense growth in their online sales during the lockdown phase, as online marketplace was the only safe available option for consumers to do shopping.

Did you read; E-commerce Titan Amazon shares traded above $3,000; would the rally continue in post-pandemic phase?

Post-lockdown, the biggest challenge for the stores is to find ways to entice digitally adapted customers back into physical stores. Some retailers had feared that shopping through physical stores might evaporate overnight, leading to a shift in bulk of their sales online.

Must Read: E-commerce Boom & Stocks Benefitting from Online Shopping Surge: CCX, BBN, APT, KGN, GMG

While majority of the focus is on online platforms, the physical stores would require less floor space. Amid downsizing, stores would be transformed into showrooms with sensory experience wherein customers can see, touch, feel and try on products.

Yes, it would be a challenge to get customers through the door, but there is a fantastic opportunity to try out innovative and creative ideas.

We might see a blend of services such as fashion stores selling coffee or offering tailoring services along with products, or coffee shops having a gaming setup. Moreover, limited edition products might only be available in stores, or the option of customisation of products might grow in-store to keep customers engaged.

The significant re-engagement plans in the form of discounts, promotions and other marketing incentives might lure the consumers into opening their wallets again.

Did you read; Retail Industry Embraces Re-openings and Digital Shift amid COVID-19 Disruptions

In the current times, digital transformation is transforming shopping, online experiences, and customer lookout of physical stores. The pandemic has turned the world upside down and has brought a wave of tech innovation.

Did you read; How is the buying pattern changing during the COVID-19 pandemic?

Perhaps we could see showrooms transforming into a platform for customer events that could also be live streamed globally; used for product launches, product education pieces, or range of updates for continuing consumer engagement.

The post-pandemic world would be an unexplored territory; this is not the time to be lazy and carry on businesses with a laid-back attitude.

The key to flourish in the post-pandemic era is to be flexible and innovative.

 

 


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