What will retail look like after the coronavirus pandemic? While no one knows for sure, experts predict how and what consumers buy will be different in the future. Can small business owners prepare for the future retail landscape?
How buyers purchase products will change, and it will be a 2-way street. Consumer shopping methods will influence how retailers operate, but changes in the retail landscape will also alter the buying channels available to shoppers.
Online buying is here to stay. In the future, consumers will expect the availability of no-touch or contactless purchases. Delivery methods, such as in-home delivery, buy online pick up in-store (BOPIS), and curbside pickups, will be the new standard for both convenience and safety reasons.
According to McKinsey Institute: “Consumers are now accustomed to staying home for weeks at a time and buying a wide range of products online. In the future, they won’t visit stores unless retailers give them good reason to.” Even big-ticket items, such as freezers, that were purchased in-store are now bought online, according to Retail Customer Experience. The “hands-on browsing” need has diminished.
Online shopping may become the only option for some consumers as the number of brick-and-mortar stores decreases. Some stores deemed nonessential may not survive, and urban small businesses may not be able to shift to online shopping. Consumers may move out of highly urban areas causing more stores to convert to being a hybrid or full-dark store, which operate like a fulfillment center for delivery to online buyers.
Based on consumer preferences for online ordering or low-touch in-store options, brick-and-mortar retailers will have to make changes such as:
The good news is retailers can influence “how consumers buy” with a focus on omnichannel retail—combining e-commerce with brick and mortar options. Retailers with a focus on digital and automation strategies could:
An example of persuading customers to come into a store would be offering “in-store only or in-store first” products. Then the store could personalize the store experience based on customer preferences. For example, Weis Markets uses its artificial intelligence engine to make real-time personalized recommendations to shoppers based on whether they are online or in a store.
While the “individual ads” portrayed in the Tom Cruise movie Minority Report may not be viable yet, personalization can entice a shopper to visit a store.
What will consumers buy in the future? Shaking the magic 8-ball and coming up with the right answer is impossible. But just like the “how consumers buy” will be influenced by both consumers and retailers, the same goes for the “what.”
Trends in consumer spending seen during the pandemic may offer insight into what consumers will buy long term. Factors that may influence consumer spending include:
McKinsey Institute predicts that the nesting trend will continue. Consumers will continue spending on in-home entertainment items such as bread makers and home exercise equipment. They also predict that consumers will be price-sensitive and willing to look for deals and switch to unbranded items. This shift fits with the idea that luxury item spending will decrease.
And consumers are expected to buy in bulk as trust in the “always available” supply chain has been broken. According to Sabrina Helm, associate professor in the Norton School of Family and Consumer Sciences, “many will start to keep a safety stock of staple items.”
A retailer with insight into their customers’ behavior via an omnichannel and digital approach can sway what the consumer purchases.
Imagine the upsell and cross-sell opportunities that exist in this new retail landscape. When a consumer asks for a product that is now behind the counter, then the sales associate can suggest a companion product. Retailers with an online presence or that offer mobile scanning in-store can use the “other customers also bought” feature to get more items added to a cart. Retailers could create an in-store personalized experience like Neiman Marcus’ interactive dressing rooms where customers can change the lighting, communicate with associates via a touchscreen, and check out from the fitting room.
In this future retail landscape, businesses will need to track customer behaviors and pivot to meet those needs while offering personalized, safe methods of shopping.