Retailers spent 2020 adapting to survive the COVID-19 pandemic. From the initial lockdowns to the holiday season surge in cases, the virus threw all predictions and expectations for the year out the window.
If 2020 was the storm, 2021 has been the subsequent period of rebuilding and reflection. The pandemic sadly forced many stores to close for good, and as the dust settles, those that survived have seen the landscape shift permanently. Not necessarily for the worse: As with any major upheaval, the changes wrought in retail revealed opportunities for improvement.
JRNI’s CEO John Federman recently joined Jim Barnes, CEO and co-founder of Envista Corp, and Melissa Gonzalez, founder, CEO and Chief Strategist of the Lionesque Group and Principal of MG2 Design, for a live discussion about trends in the retail industry over the last two years.
They talked about pandemic-related changes they’d like to see stick around, what the 2021 holiday season could look like, and the real benefits of brick and mortar stores over eCommerce.
The COVID-19 pandemic shook retail out of its stupor
The immediate issue COVID-19 created for retailers was uncertainty. In March 2020, when lockdowns went into effect across the world, it wasn’t clear how long stores would be forced to close, whether stores would be able to reopen to full capacity, and what safety procedures would have to be put in place.
Faced with such sudden upheaval, some businesses struggled to stay afloat, especially those that didn’t have cash reserves to tide them through. However, other brands were able to pivot in ways that not only made it possible to keep operating through those early days, but ultimately led to an improved customer experience.
As a consumer, Federman says, “You began to look back at the things that really bugged you [but] you didn’t know they did.” For example, having to share store associates’ time with other customers. When many stores switched to appointment-only, customers benefited from one-on-one attention.
They also paid more. Federman says that on average, a customer with an appointment buys more items in that transaction (i.e. increases their basket size) compared to customers who didn’t book to come in in advance.
Being forced to take operations and customer interactions back to the drawing board presented retailers with an opportunity to experiment with new approaches. It turned out that some of the measures introduced to manage the impacts of COVID-19 were welcomed beyond the immediate emergency.
Faster in-person transactions
Eradicating long lines has been a goal of stores for as long as stores have existed. And customers are only getting more impatient. Unless you’re selling essential goods like groceries or medicine, customers in 2021 will not wait for 15 minutes to buy something or speak to a sales associate.
COVID-19 transformed the desire to reduce time spent waiting in lines from a wishlist item to a must-have. The airborne nature of the virus and the resulting capacity restrictions have ensured that long lines in stores are longer just a nuisance: they’re a potential health hazard and can lose you business. If someone won’t stand in a line to pay at a store, they won’t stand in a line just to get inside.
This situation finally pushed stores to devote more attention than ever to solving the problem of lines. Thanks to that, transactions have finally become more streamlined.
“Transaction moments are getting a lot more efficient, especially at checkout: Checkout is a key area,” Gonzalez says. For example, after years trailing the rest of the world when it comes to mobile payments, this technology has now started to become more available and popular throughout the US.
Seamless omnichannel communication
An omnichannel marketing approach was already being floated in the retail space as the most effective strategy to build a brand that was synced across all digital and physical channels. With fewer people coming into stores, businesses were forced to use online tools to communicate with customers faster than some may otherwise have adopted them.
Those that did it best were the ones that created a consistent brand identity in every environment. “What retailers have to do is maintain their sense of their own brand,” Federman says. “So could it be done with a sense of humor? Yeah.”
eCommerce won’t necessarily trump stores this Christmas
One of the things the COVID-19 pandemic has shown over and over is that you can’t predict the future.
In December 2020, much of the Northern Hemisphere was experiencing a spike in cases that kept many shoppers away from stores, relying on eCommerce for their holiday shopping. What this year’s holiday season will look like is still uncertain, largely thanks to the omicron variant.
However, just because people got used to online shopping doesn’t mean they’re ready to completely abandon stores.
One year of switching to eCommerce isn’t enough to erase people’s need to physically interact with certain items before feeling comfortable buying them. “There are some purchases that are 100% fine to be all digital,” Federman says. “But there are some purchases where the consumer wants to touch and feel and look at the merchandise. And last holiday season suffered because of that.”
He predicts that shoppers will be more cautious, and that stores will need to enforce clear safety measures to entice them back in. Giving customers the option to shop by appointment only may be a helpful tool. But compared to last year, he thinks in-store shopping will be more prevalent in 2021 than 2020.
That said, making shoppers feel safe is the bare minimum stores will have to do to entice them back. Brick and mortar retailers also need to offer a special experience that customers cannot get online.
“We have to give reason and motivation for people to leave their house,” Gonzalez says. She adds, “Something a little bit more discovery-based, experiential, differentiated.” For example, a Santa’s grotto, or holiday-themed classes or workshops.
Retailers certainly have an incentive to encourage shoppers to move away from eCommerce, or to at least combine it with an in-store visit.
As Barnes explains, sending packages through carriers such as FedEx and UPS is expensive, time-consuming, and not necessarily reliable. You can’t guarantee when the product will reach the consumer, which is an especially significant concern for holiday shoppers who need it before a specific date. And consumers won’t blame mail carriers: They’ll hold it against your brand. There’s a reason Amazon spent millions building its own fleet of delivery drivers!
Much more preferable to retailers is the Buy Online, Pickup in Store (BOPIS) model, “which by far is the least expensive way to fulfill an eCommerce order,” Barnes says.
The purpose of stores has come into sharper focus
You don’t know what you’ve got until it’s gone. When stores were forced to close and an unprecedented amount of transactions moved online, retailers and consumers suddenly understood the true value of brick and mortar stores.
It became clear that there were two main benefits: Physical interaction with products, and positive human connection with the brand.
Some products are easier to buy in person
Although you can buy virtually anything online, some products benefit from an in-person sales experience.
For example, if you need a very specific piece of hardware for a DIY project, it’s less convenient to scroll through Amazon, decipher complicated product descriptions, and wait two days for it to be delivered than it is to go to your local hardware store and pick it up in person.
Clothes and shoes are another interesting example. They have to fit properly, and anyone who has shopped for jeans knows that no matter what the size guide says, you won’t know whether they fit until you’re trying to pull them over your thighs.
Online fashion retailers have learned to make returns free and easy: but it presents environmental and economic challenges. With more brands abandoning free returns, the fashion pendulum may yet swing back in stores’ favor.
In theory, buying something from the comfort of your couch is always easier than physically going somewhere to get it. But when you shop in a store, you know what you’re getting and you get it instantly. In the case of certain products, that’s the ultimate convenience.
An in-store experience creates brand ambassadors
The other thing stores do much better than digital tools is create a sensory brand experience. It’s an opportunity to connect with a customer on a human level, and to give them the above-and-beyond service you can’t deliver online.
“The physical store is changing and evolving,” Barnes says. “There have been some retailers that have really done a nice job evolutionizing how the physical store works today [and] in the future, and using that store for more than simply transactional [purposes]: Using that store to figure out how to engage with customers from an omnichannel perspective.”
If anything, in-person customer service has improved since the pandemic started — staff shortages notwithstanding. The option to book an appointment and receive one-on-one service is a luxury most customers previously didn’t have access to. In addition, stores have started to understand the importance of a frictionless in-person experience, made easier by options like curbside pickup and mobile payments.
If the changes in retail over the last two years have proved anything, it’s that customers have higher expectations and less patience than ever. The most effective way to meet those demands is by combining the ease of eCommerce with the wow-factor of stores.
About the author
The JRNI team is made up of product, customer, and technical experts who are focused on driving personalized experiences - for our customers, and for theirs. The JRNI blog enables us to dive into how retail and financial organizations can use personalized experiences to grow profitability, build stronger customer relationships, and drive customer loyalty.
June 08, 2021
7 minute read