Retail was one of the hardest-hit industries during the Covid-19 pandemic. It’s true that travel and airlines are suffering more, but when the first lockdowns spread from nation to nation, all non-essential stores had to close. Retailers that depended on revenue only from physical stores suddenly found they had no income at all.
But what will happen next for retail brands? It’s difficult to make concrete predictions because the virus is still out there and spreading. Some countries are recovering well, but it looks like some are about to hit a second wave, potentially leading to further lockdowns. In the US, we can see that retail is still disrupted although it looks unlikely that there will be a further national lockdown because of the economic disruption it caused earlier in 2020.
Although the outlook is uncertain, retail leaders need to think about the most likely path their business may take and how to build flexibility so changes can be applied quickly. The future of retail is going to be more complex than just providing some hand sanitizer at the store entrance.
The Harvard Business Review recently listed a few key areas to think about for 2021 and beyond, including:
- Experiential Shopping: will shopping malls become destinations for timed experience in the same way as theaters and cinemas and if this does become more common then how does it affect your business - if you previously relied on footfall? Check out how Lululemon is still growing in 2020, despite everything that’s happening. Their store layouts usually include space for activities such as yoga, so local teachers can book the space and run classes in-store. This makes the in-store experience about using the products, not just buying them.
- Contactless shopping: how can you build in-store experiences that do not require the customer to touch products or even payment devices? In a recent survey, almost two-thirds of American consumers said they would prefer to self-checkout in a store using their own phone specifically for their own safety.
- Digital Experience: innovative brands - especially luxury - will be exploring how to create new forms of e-commerce that are more like games, rather than a typical online store with a basket. Check out how Levi’s has seen their online sales soar by 52% this year.
These are all interesting points, but they are generally focused on the mid-term - once a recovery is well underway. I would suggest a couple of other areas that retail brands need to focus on in the immediate future:
- Engagement: many retailers ramped up their engagement with customers during the lockdown period. This was a smart move and helped to keep the connection alive, even if it was just based on online conversations, quizzes, and games, rather than purchases. This needs to continue, but in a smart way. Listen to your customers and engage intelligently - don’t just bombard them with ‘interesting’ quotes of the day because soon it will feel more like spam. Look at how Target has created a series of weekly sales for Black Friday rather than focusing all the attention on a single day or weekend - this dramatically increases engagement over special offers across an entire month.
- Resilience: nobody ever wants to see a repeat of the 2020 lockdowns so think now about how to build a stronger omnichannel presence so you can build greater resilience into your business. What measures can you takes quickly to ensure business continuity, even if your region is hit by a new lockdown? Look at how the Vitamin Shoppe has pivoted to offer 1-hour deliveries from their online store, rather than focusing on their physical stores.
At the heart of all these measures will be the direct interaction between the retail brand and its customers. Your customer service strategy will need to evolve into 2021 so it can manage a greater number of customer interactions with increased resilience and the ability to continue even in adverse business conditions.
This requires a strong focus on customer service agents working from home, improved automation to help customers 24/7, improved self-service so customers asking Google for help find useful results. How retail companies evolve from this crisis will be largely driven by their ability to adapt and build closer relationships with customers - a robust customer service strategy will be the key to this.