Is COVID-19 the final nail in retail? Or is there hope for recovery?
According to IBM’s annual U.S. Retail Index Study, the COVID-19 stay-at-home orders and closures, not surprising, catapulted ecommerce levels ahead by five years. Also understandable, in-store retail like department stores declined by 75% in Q2. What does this mean in the long-term for brands when stores are open consistently? For 2020, department store sales overall are projected to decline by over 60%. This could be due to findings from Kantar’s COVID-19 Barometer (Wave Five), indicating that 66% of people will continue to avoid busy places like physical retail locations. Furthermore, over 50% of Millennials and Gen-Z think they will continue their newly adopted pandemic behaviors post-crisis. That said, 35-38% of those under 55 do look forward to shopping in person, with the older Boomer generation the most eager at 46%.
Still, the post-pandemic era is still at least 6-9 months away with many stores now open across the country. So how can retailers keep their in-store business going in the short-term, while protecting consumers and staff, and encourage shoppers to return for the long-haul?
Accordingly to the Harvard Business Review, limiting customers in store is the safest protocol. But this significantly impacts on sales which relies on throughout in stores, according to Little’s Law equation: Throughput through the store (in customers per hour) = Number of customers in the store ÷ Time spent in the store (in hours)
The good news is that retailers have a variety of options they can utilize to manage these variables to positively impact sales:
Retailers and brands also need to have an even stronger customer care strategy than ever given common problems like inventory unavailability/fulfillment. This means being even more transparent to shoppers across all touchpoints during their entire experience, whether it be in-store or on-line. This will also have the added benefit of reducing already long call-wait times and volume of messages.
With these strategies, retailers can best position themselves for success not only during the pandemic but after!
Questions, Comments, and the Future
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