• Pamela Neferkara

There Is No Going Back: The New Retail

What is essential for brands and retailers to consider as they navigate a post-pandemic world?

The 2020 pandemic has exposed the soft underbelly of an economy reliant on consumer spending for 70% of GDP: no consumer spending, no economy. While there are some winners in the current retail landscape, these are the sectors or brands that were relatively bullet proof; grocery stores have historically seen high conversion rates and who hasn’t watched, wide-eyed, as Amazon has become transcendent over last decade? The New Retail isn’t about them, it’s about the rest of us.

As society slowly re-opens, brands will have to re-think retail in a world still full of uncertainty. Most forecasters indicate we could be living with various forms of restrictions for 36 months or more and facing a very uneven recovery. Even as we emerge from this pandemic, one thing will remain: fear. The fear that this, or another threat, could re-emerge. So, if there is no going back, the time has come to consider how we go forward in a world driven by continued uncertainty around safety, income and health.

The New Retail is made up of 3 components: 

The New Consumer.

The New Experience.

The New Relationship.

The New Consumer As we stand in our closets and glance past the designer dresses and the “fire” sneakers only to grab the same sweatpants again, what consumer isn’t wondering why they bought all that stuff to begin with? Even celebrities are re-thinking how they show up. When discussing her impromptu YouTube show, Schitt’s Creek actress Emily Hampshire, as quoted in the NY Times, summed it up: “I feel like I don’t have to keep up appearances anymore. There’s nothing I have to pretend.” The hard truth is that even beyond the nuclear impact of unemployment on discretionary spending, being locked down has unleashed the joy of letting go. Yes, we might have to pull ourselves together for a Zoom call, but that’s only from the waist up. The New Consumer now has good reason to question every purchase. They’ll be planning for continued uncertainty and a higher balance in their nest egg will be much more appealing than a higher heel

What does this mean for retailers? It means our products will be scrutinized for providing real value whether that is price, quality, longevity or adaptability. It means consumers will be asking themselves more than once if that big purchase is really necessary, an art that millennials were already perfecting. It means that even seemingly small purchases will be thought about and thought about again before pulling the trigger. If you’re not providing food, shelter or health care, consumers will be asking “Do I really need to buy this now?”

There is good news for consumer brands such as Nike who already, of course, support health through movement. It also bodes well for some parts of the restaurant industry: those restaurants that provide foods that are healthy and easy to deliver or pick up will continue to fill a void for those who don’t cook or need a break from providing 3 meals a day for the family. As fear continues to impact purchase decisions into the near future, communicating your unique value proposition, and how it fulfills consumer needs around health, safety and shelter, will become an even stronger imperative. That leads us to:

Displays encouraging consumers to "Try Me" will be a casualty of The New Retail

The New Experience. This New Consumer will be looking for bold and obvious signs that companies they do business with have modified their protocols to address possible contamination. No business wants to become ground zero for a re-emergence of infection and many consumers won’t be taking a chance with anyone whose process is suspect.

This will include a wholesale re-thinking of the consumer journey beginning with digital. Retailers that have solved for online ordering with pick-up in store will be a step ahead. In the last 18 months, Nordstrom had already converted a significant portion of their floor space to exclusively service order pick up. These areas were well-staffed with dedicated associates, exclusive fitting rooms (to try on your purchase right away) and racks of storage space. Curbside pickup will be even more appealing. Retailers who can efficiently pick, pack and drop an order into your car will help solve the social distancing challenge of consumers looking for near instant gratification. Consider the Nike Reserve feature introduced almost two years ago that allows consumers to purchase in the Nike app and pick up in store. Tightly integrated digital and physical store experiences will be essential to make shopping more efficient and help consumers feel safer.

Retail environments will also be challenged. Aside from the inconvenience consumers may continue to experience by having to wait in lines at the entrance in order to keep crowding to a minimum, retailers will have to re-think how they display and stock. Consider the last time you visited an Apple Store: rows and rows of shiny computers and phones that everyone was encouraged to touch. We can’t safely go back to that model. (As we went to press, consumers visiting the re-opened Apple Store in Charleston, SC wore face coverings and lined up for temperature checks before entering.) It will be nearly impossible to keep displays contaminate free, yet before purchasing a high ticket item like a laptop, consumers will need a way to safely experience them. Retailers may have to design appointment shopping to insure there is time for disinfecting and to limit employee exposure. Maybe Warby Parker, the online eyewear company, has it right: consumers try on at home for free. This controlled exposure would allow consumers to disinfect items at home and companies to disinfect again when returned. Some may forgo physical retail altogether. Consider beauty biz start up, Glory Skincare, who is shifting to subscription boxes and away from opening stores.

The idea of retail space as showroom is bound to gain traction in some quarters. Much like furniture stores who only display one of an item, other retailers may be forced to severely reduce inventory on the floor while also considering the displays themselves. Easier to clean materials such as stainless steel will begin to factor into retail design. More backroom space will be needed to better support shipping directly from stores or quickly retrieving items for pick up.

Density of fixtures will also become a significant factor. Most retail spaces have been designed to maximize productivity per square foot. That approach is opposed to a social distancing requirement of six feet. Retailers need look no further than grocery stores today who have already had to alter their flow through one-way aisles, lines indicating safe spacing and shields between buyers and cashiers. Several grocery stores in Portland, OR were early in requiring face coverings for employees AND customers. Balancing the health of employees and providing a safe environment for shopping will be key even as rules are relaxed. How will department stores and boutiques follow suit?

The New Relationship. Successfully retailing post-COVID will also require a new relationship between brands, their consumers and their front-line workers (aka sales associates.) Generally, roles at the front line of service have not been the most highly paid or secure. In a recent article on LinkedIn by the team that brought you the book Inspired, Inc., Lisa McCallum and Donna Morrow argue that these are the real heroes and they will be demanding, and are deserving of, improvements across a host of dimensions including compensation, training, health benefits, childcare and rewards and recognition. Your corporate team can develop great, comprehensive protocols, but if your front line team is not willing and able to execute correctly, then it is all for naught.

Brands and consumers are also renegotiating expectations. The winners will be those who understand what it means to be a Corporate Citizen and actively engage in making the world a better place, not just more profitable. Consumers have been asking how brands are taking care of their employees and factoring the answer into purchase decisions. Those brands who have been making charitable donations, offering free access to services or apps and going above are the brands enjoying greater loyalty now and in the future. We’ve seen this type of communication front and center ( One thing this pandemic has demonstrated is that we all have a role to play in protecting the health and welfare of our communities. Successful brands will continue to recognize and act on that in the future.

Critical to this will be a continual 2-way conversation. Brands should survey consumers regularly to understand their expectations as they begin to re-engage in public spaces. Keeping an ear close to the ground is an imperative to avoid missing the mark when it comes to providing the right type of service.

It may continue to be a scary world out there, but by remaining open-minded, curious and agile, retailers can and will emerge better. Will you be among them?

Need help designing the future of your retail space and consumer journey? Direct message me to find out how you can join a monthly Zoom meeting to exchange ideas and help solve the sticky issues we are all facing.

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