COVID-19: How smart retail businesses are spotting opportunities for growth.
Click onto any ‘business’ section of a news website at the moment and you will likely be met with messages of doom and gloom for the retail sector.
With big retail businesses like Arcadia falling victim to the impacts of COVID-19 and entering into administration, it is no surprise that people are worried about the future of physical retail stores.
But is it really as bad as the media are making out? Is physical retail really doomed? Are we about to enter a world where, virus or not, we never leave our homes to go shopping?
In this article, we explore some of these questions and take a look at what the future might hold for the physical retail space.
We can’t deny that 2020 has been a complicated and strange year for everyone across the globe. But few others have been hit as hard by the advent of COVID-19 as those operating in the retail sector.
Shops in all countries across the world have been faced with the unique challenges placed on them whilst yo-yoing between complete shutdown during nationwide lockdowns and extensively limited operations during phased approaches to normality.
Of course, complete lockdowns have had a hugely negative impact on physical retail, with the majority being unable to operate in any way, shape or form. During times where restrictions have been relaxed, physical stores have had to deal with the added challenges surrounding restrictions on capacity, social distancing, deeper cleaning requirements and higher demand for protective equipment.
Along with logistical issues, retailers have also had to deal with the lowering confidence of their customers and their willingness to come in store. With some studies highlighting that over half of shoppers surveyed said they wouldn’t be returning to physical stores “for some time” or “for a long time”.
"If your customers are worried about human contact, therefore, your business has a new and unexpected challenge." - Alan Behr, Fashion Industry Attorney and Partner at Phillips Nizer.
As a result, online sales have increased during the pandemic, stealing considerable market share from physical retail.
Reading the section above, you could easily be led to believe that physical retail is indeed on a path towards its total death and destruction...but you would be entirely wrong.
Although customers have turned to alternative methods of shopping during COVID-19, this does not necessarily mean that they are never going to return to physical retail once a sense of normality has returned.
We know this because online shopping is no new thing. In fact, online retail giants like Amazon and eBay have been around since 1994 and 1995 respectively and for the past 25 years we have maintained a healthy and growing physical retail sector.
This tells us that shoppers don’t just go shopping to buy the products they need. After all, most products can be purchased more conveniently and cheaply online. Shoppers love to shop because of the experience they receive.
Of course, online shopping will always be big business. But it is unlikely that an online store will ever match the personalisation, atmosphere and human interaction that can be created within a physical store. That is why customers will always want the option of visiting a store over shopping online.
This fact was made clear during 2020 as shoppers began to return to stores during the pandemic, despite concerns around the safety of doing so. It wasn't that shoppers couldn’t get those products online, they went shopping because they couldn’t get the experience they enjoy so much from an online store.
You will notice that one theme is mentioned heavily in the section above; the importance of shopper experience when visiting a physical store. This fact is crucial for businesses to remember when looking to overcome the challenges faced by the COVID-19 pandemic.
Although these changes were already set in motion by the growing popularity of online shopping, COVID-19 has rapidly accelerated the need for physical retail to shift focus from product offering to improving shopper experience.
High streets and shopping centres are no longer a location of convenience, as they are now easily being beaten in this field by online shops. Instead, creating highly engaging experiences is the crucial differentiating factor that will help physical stores continue to generate profit and grow.
Smart businesses will continue to invest in consumer experiences, both by adopting new technology and by investing in their people, creating invaluable human assets in the education of their customers.
No sector operates in a way which is set in stone. Whether it is developments in online retail or unforeseen global events like COVID-19, physical retail will undoubtedly face new and continuing challenges over the coming years.
It is those retail businesses that identify these challenges quickly and allocate resources to overcome and ultimately leverage them that will see the biggest benefits over time.
For example, instead of fearing online stores, many smart retailers are now embracing the possibilities afforded to them by adopting the new online tools at their disposal. By seeking new ways to incorporate real world experiences with the benefits of online sales, these businesses can benefit from the best of both worlds.
It isn’t a case of online stores vs physical stores, but more a matter of finding the right balance between the two to create the most engaging, convenient and pleasurable experience possible for your customer.
Technology is inevitably going to play a major role in overcoming the ongoing challenges of COVID-19. We are already seeing widely adopted technology such as touch screens and card readers making it easier to facilitate social distancing between customers and shop staff.
New tech such as smart mirrors will also start to be adopted in order to limit high-risk areas such as changing rooms by allowing for a socially distanced, low contact fitting experience.
Learn more about how shops are using innovative technology to boost customer engagement in our article In-Store Technology: The Future of Shopping in 2021 & Beyond.
COVID-19’s Impact on Retail
The media may make it seem like COVID-19 is going to be the final nail in the coffin of physical retail, but it is far from it. All sectors have and will continue to need to adapt to the challenges presented to them during this trying time. It is those who can adapt quickly and confidently, finding new and better ways to serve their customers, that will ultimately benefit from this global crisis.
Read our article The Top 10 Most Innovative Pop Ups for inspiration on earning and keeping customer attention.