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The Future of Retail: Recovering from a Global Pandemic
If there’s one thing we know about the future of retail, it’s that there are still a lot of unknowns. If you’ve been in this business long enough, you’ve probably heard the term ‘Retail Apocalypse‘. In fact, we’ve seen it with our own eyes as big-box retailers have closed in record numbers and online sales continue to climb. And now, as we begin to understand what life looks like post COVID-19, literally from the inside looking out, we wonder if we’re witnessing the demise of retail as we knew it.
For those of us who have been working with retailers for many years, we know retail isn’t dying, it’s simply evolving. Again. And this time, at a faster pace.
The impact of Online Retail and Ecommerce
According to research from Forrester published prior to the health pandemic, online retail has been trending upward in recent years, accounting for roughly 17% of all retail sales in 2019. The study showed a projected increase of 1% each year through 2025. But then, COVID-19 hit. The effects of stay-at-home orders and the increased dependence on online shopping is expected to grow online sales between 3-4% in 2020. So, while we’ll certainly see more online retail, it hardly equates to a total shift to an online retail economy.
So, the big question is, when the stay-at-home orders are lifted and the economy opens back up, what will retail look like going forward?
COVID-19 is creating a new normal for how we interact with the world. Social distancing has become our new norm and while we will eventually return to work, our return to shopping and dining will likely look very different than it did before. Here are some trends we’re expecting to see.
The Future of Retail: Six Things We Expect to See
- Minimizing contact– Retailers will likely need to implement long-term solutions to help minimize customer contact in retail stores. Separate doors for entry and exits may become the standard. One-way aisles and new touchless technology (think dispensers for items such as drink lids, plastic silverware, and napkin dispensers) will also be implemented. Whether it be by best practice or more stringent building and zoning codes, I imagine we’ll also see new requirements about occupancy rates that will reinforce social distancing best practices. Venues such as restaurants movie theatres may require more separation between seating or perhaps occupancy counters that will help limit the number of people allowed in a grocery store at any one time.
- Fresh Experiences – As we all start venturing out to our everyday lives again there will be a desire to socially interact once again. We’ll want to go out to dinners again, go to the movies again, and experience life again. Creative brands should be looking to create opportunities to create experiences that are fresh and exciting. Each year we see this with our friends to the north who are cooped up through the cold northern winters. Come spring they are ready to tackle the world, travel, and enjoy the outdoors again. I expect to see much of the same when we all come out of quarantine or from sheltering in place.
- Embracing Technology– Stay-at-home orders and social distancing has forced many of us to use technology and services we never had before, like Uber Eats or Zoom. Our new comfort with these services means we’ll continue to embrace them in the future. In fact, we may see an increased demand for more technology in our everyday lives, including the way we shop. This won’t simply be in the form of e-commerce, but technology that enhances our brick and mortar experiences. This might be in the form of voice controls, virtual reality, augmented reality, and more automated checkouts.
- Reinforcing brand trust and loyalty – A brand’s promise, and the trust a customer has in a brand, is more important than ever right now. Companies will be judged on their reactions and precautions to the current pandemic. People everywhere are nervous and focused on putting safety first. They are looking for retail experiences they can trust. Many retailers are already putting their best foot forward and putting the good of the community, employees, and customers ahead of profits. We’ve seen this with auto insurance companies providing premium rebates to compensate for a reduction in driving and with rideshare companies like Uber imploring customers NOT to use their services. The retailers that show they care will reap the rewards later with the value that comes from a loyal customer base.
- Designing for Wellness – According to the Global Wellness Institute, the wellness economy was coming in at over $4.2 trillion dollars prior to COVID-19 and the built environment was already a large part of that number. Going forward, we will see an even greater push for well building practices in the retail environment to accommodate the concerns for higher standards to maintain the health and wellbeing of consumers. WELL building and Healthy Building standards and best practices will become more prevalent. Making sure the air we breathe and recirculate within retail buildings is clean and interchanged with clean outside/fresh air will be important in order to minimize the person to person transmission of airborne elements.
- Repositioning retail spaces – It is no secret that retail has been hard hit. Many may not survive and could be forced to close. This would leave unused retail space throughout the country. While unfortunate, it’s important to start thinking about new uses for these spaces. Uses that may have a stronger chance of surviving a similar situation in the future. Repositioning retail-only real estate into a mix of entertainment and fitness, combined with office space, housing, and community spaces may be our best bet. However, the mixed-use redevelopment will be executed with additional care to respond to wellness and minimizing contact.
Retail isn’t going away. We will always need to purchase items and it’s part of our nature to seek out new experiences. While it feels like the world changed overnight, the health pandemic didn’t create this change in retail, it simply accelerated what was already happening. Brand experience, wellness, and technology will be the drivers that will push us to the next evolution of retail, beyond the influence and immediate reaction to COVID-19. In the meantime, we’re happy to see that spring is here and the country is starting to open again. Hopefully, we’ll soon be back to shopping!
Read more: Coronavirus has changed the way we work today and in the future.