The Great Migration of Retail
How the coronavirus pandemic will affect brick-and-mortar shopping
The advent of digitally-native brands (DNVBs) like Warby Parker and Bonobos over the past decade has been a wake-up call to big-box retailers of the need for comprehensive digital and e-commerce strategies. At the same time, younger brands that started on the internet have realized the importance of in-person shopping experiences, creating a formula for omnichannel offerings that touch the customer at every point in their lives.
April showers
The retail industry has been one of the industries hit hardest by the coronavirus. The Associated Press reported that overall U.S. retail sales dropped by 16 percent in April, with clothing store sales plummeting by 79 percent from March and department store sales by 29 percent.
This makes sense. Fashion hubs like SoHo in New York City and the Fashion District in Los Angeles—neighborhoods that would typically be bustling during spring—have fallen asleep as lockdowns ensue.
In the meantime, “online and catalog retailers” sales increased by over 8 percent from March. And according to Adobe Analytics, online pajama sales soared 143 percent in April versus March.
The rise of curbside
What’s been a staple for restaurants like Applebee’s for years has risen in popularity among retailers, most notably Nordstrom. Buy online, pick up in-store (BOPIS) has become both an efficient blend of the digital and in-person shopping experience for consumers, and a solution for last-mile delivery problems facing stores.
eMarketer says that leading U.S. grocery chains doubled the number of stores offering BOPIS in 2018. Walmart, Target, and Kroger offer similar services allowing for customers to order in their respective apps and then have a personal shopper load the purchased items in their car.
If you’ve walked through a Nordstrom in the past few years, chances are you’ve seen the racks of pre-filled bags waiting to be picked up. The fashion retailer started testing the service in 2015 and has since begun offering same-day delivery in New York City and even 24/7 delivery at 10 locations during the week leading up to Christmas in 2017.
BOPIS has also been a catalyst for helping the bottom line. Goldman Sachs’ Jennifer Davis says on their podcast that brands have been using physical stores differently in recent years, “they’ve been really investing is in their last-mile delivery… they do that both in terms of lowering distribution costs and two, getting add-on sales.” Davis also added that 30 percent of the time when a Lowe’s customer picks up an order they placed online, they’ll add another product to the order.
The new normal
Dan Frommer, Editor in Chief of The New Consumer, wrote about his FaceTime shopping appointment at French brand A.P.C.—who’s offering virtual consultations in lieu of their traditional stores during this time—and the possibility of stores transitioning to appointment-based shopping. He says:
In the case of my virtual appointment with A.P.C., I learned about it yesterday through a marketing email, thought it sounded interesting, and quickly signed up through an Acuity-powered form on its website… A day later, I’d spent nearly an hour engaging with its store and website, and a decent amount of money.
While online-only visits may be temporary, the idea of tailored shopping may finally expand to the masses. High-end boutiques and technology companies like Apple have offered the service for years with size measurements and Genius Bars, but their inability to scale have prevented scheduled appointments to be the default method.
Now, by necessity, they may be the go-to channel for people looking for a new shirt or pair of sneakers. If retailers choose to require customers to plan their visits ahead of time, they could lose out on foot traffic and purchases that may not have been premeditated before entering the store. However, some shoppers may feel obligated to buy more if an employee was solely focused on their experience, causing average transaction values to increase.
Possibilities and predictions
With economies opening back up and every grocer, tailor, and restaurant figuring out how to navigate this new world, customers are also choosing which stores to visit or not. And which goods are necessary or not.
In the short term, curbside delivery options will separate leisure shopping from getting the ingredients you absolutely need. Places like Kroger will need to navigate increased demand for their car-delivery services from people who may not be as willing to go into a store filled with people. Nordstrom and other non-essential businesses may suffer from a lack of customers walking through their displays adding impulse buys to their bill.
Once the effects of coronavirus aren’t felt as much, curbside may remain an easy choice as people realize how simple it is to order something on their phones and not even have to get out of their car to pick it up.
In the long term, the inefficiencies caused by having to attend to each individual customer may damage brands’ ability to balance sales and offer a complete experience to hundreds of consumers daily. For example, T.J. Maxx and its sister company Marshalls thrive on guests being able to sift through the racks of clothes to find the best deal—which is hard to recreate online.
Unless specific laws are passed requiring stores to change how they operate, I believe that retail will go back to the way it was pre-COVID-19. Going through TSA (which was founded as a result of 9/11) is a pain, but it’s the law. The extra costs associated with sanitizing the store up and down could be unsustainable for some smaller boutiques, who already have to rearrange, refold, and clean up piles of tried-on outfits at the end of the night.
In the meantime, check your nearest mall’s website for lists of stores that are open and the measures they’re taking to keep guests safe while shopping—you may see the parking lot a lot more busy than you’re used to.
