It is undeniable that retailers are experiencing one of the biggest shake-ups of the 21st century when it comes to the way consumers have had to change their spending habits.
As retailers adapt to the new normal, complying with government-mandated guidelines has meant they have had to make changes to the layout of stores, kitting themselves out with signs to indicate one-way systems and floor markings to encourage social distancing.
Meanwhile, changing rooms are closed wherever possible. Although these measures are helping to keep both retail workers and consumers safe in the wake of the pandemic, they are having a profound impact on the high street.
Prior to lockdown, which saw most of the UK’s bricks-and-mortar stores closed for over two months, shopping had developed into a social hobby. Large retail destinations catered to this by combining leisure and shopping where popping to the shops and stopping to meet friends for coffee or going to the cinema was a regular pastime for many. But with measures, such as social distancing, expected to remain in place for some time, even with stores reopening, shopping habits and the high street itself could be changed indefinitely. So, how will COVID-19 really impact the future of retail?
In this new era of retail, trust is going to be paramount and stores that consumers view as ‘safe’ will succeed in attracting customers back through their doors. In fact, consumer confidence as has been ranked as the number one factor in determining where consumers will shop in the post-pandemic landscape.
This may lead to department stores, which were in decline pre-lockdown, succeeding once more as they tend to be highly trusted by consumers, therefore, shoppers might feel safer visiting their stores where they believe stringent protective processes are more likely to be in place and adhered to.
Consequently, to attract customers back to their stores, retailers must ensure that consumers see their stores as safe environments and instil confidence that they are adhering to cleanliness and hygiene standards.
While brands such as John Lewis may be intrinsically more trusted in these areas than others, most retailers will be required to build consumer trust and demonstrate the measures they are taking to protect both their customers and employees. At the very least, this will require retailers to make significant changes to the frequency and intensity of store cleaning and ensure that social distancing measures are signposted and enforced both within their stores and while individuals queue outside.
While media depictions of store reopenings showed huge queues down the street in places such as London and Birmingham, it’s unlikely the buzz seen in these big cities will be sustained across the country. Unsurprisingly, many consumers are still cautious about going out for non-essential purposes, and this paired with continued social distancing measures, may mean that stores don’t attract the footfall needed to make opening stores viable.
This will make opening stores unsustainable for some retailers, particularly those who sell low-cost goods and, therefore, need more customers through the door to turn a profit. This may have been an influencing factor for chains such as Next, which decided to reopen just 25 of its 500 stores at first and John Lewis which has implemented a phased reopening of its stores. These factors may result in stores limiting their opening hours to ensure that opening is profitable.
In tandem with implementing new measures to comply with government guidelines, with so many predicting a second spike in COVID-19 cases, retailers will need to prepare by taking lessons from the first lockdown. While the forecasting mechanisms which retailers rely on to predict the landscape didn’t see the COVID-19 pandemic coming, due to them being honed to focus on long-term forecasting aimed at identifying the predictable (which of course COVID-19 wasn’t), they will be crucial for future success.
Solutions that use artificial intelligence and machine learning can learn deeply from the current situation and new models can be trained to better predict and respond to a new pandemic or a second spike. This method will be especially useful for those global brands that can pull in data from stores in countries who are further down the line in getting back to business, such as China.
Ultimately, COVID-19 is going to have a lasting impact on retail as bricks-and mortar stores adapt to new regulations, reduced footfall and changing spending habits. While there’s no way of knowing at this stage whether there will be second spike in the virus, retailers must make best use of the data and tools available to them to prepare for that eventuality. Unfortunately, those retailers that were already struggling prior to the lockdown may be among the first casualties of the post-pandemic retail landscape.