Hannah Stacey
Hannah Stacey
Posted 24 June 2020

The role of physical retail in a post-COVID world

Topics: COVID-19

People can get funny about the prospect of change. The idea of letting go of the old way of doing things often comes with a feeling of unease.

Take the self service store as an example. We’ve now embraced the idea of self-service as an everyday way of shopping; in fact, it’s a welcome design element in the new context of social distancing. But transport yourself back to 1950 when Sainsbury’s opened its first self-service shop in Croydon, however, and you’ll find a different story.

Historians report that, ‘as Alan Sainsbury found out to his cost, the concept wasn’t universally popular. When one customer realised that the days of simply handing over a shopping list were numbered, she reputedly showed her disapproval by taking the wire basket she’d been given and throwing it at him.’ 

When it comes to bricks and mortar retail, the COVID-19 pandemic is going to be one of those moments that forces us to rip the bandaid off; to completely rethink everything we thought we knew and to accept that things will probably never go back to the way they were. 

It’s an understatement to say that lockdown has caused an abrupt change in consumer shopping behaviour that is likely to be irreversible, and whilst retailers gradually reopen, footfall is unlikely to bounce back to previous figures anytime soon. 

A survey showed that 45% of consumers believe the way they shop over the next one to two years will change, with 64% saying they expect to go shopping less frequently. According to Deloitte, only half (47%) of respondents to a global study they conducted said that they feel safe going to the store. As a result, increasing numbers of consumers are incorporating ecommerce into their long term shopping habits.

All this change is leading some to question the longevity of physical retailing. But does this really signal the death of the bricks and mortar store?

Why physical retail still has a place in the world

The troubles of the highstreet were well-documented long before a global pandemic appeared on the scene – it seemed that every month a new established highstreet mainstay would be making headlines because of financial difficulties.

But at the same time, we saw DTC (predominantly online-first) brands thrive in their offline efforts – Glossier’s popups had queues round the block; MADE.com helped shoppers experience big furniture purchases ‘IRL’ before they purchased in its showrooms; Argos completely reinvented itself as a digital retailer. 

MADE.com’s showroom in Birmingham

What did the second group do differently that made them succeed where others failed? It’s unlikely that peoples’ desire to experience brands in the ‘real world’ as well as online is going to dry up anytime soon – even taking into account the current climate; and the answer to this question sheds light on how omnichannel retailers should approach physical retail in a post-COVID era.

Experience-focused retailing

COVID-19 and the ensuring lockdown will only accelerate existing shifts towards customer engagement and experience rather than pure footfall and sales in physical retail; with a focus on creating and maintaining fewer, but better, physical stores, that exist for relationship building, brand immersion and super-convenient customer service (like click and collect). 

Pre-lockdown there were many examples of this approach as brands gradually embraced the benefits of the experiential store. House of Vans, for example, had its skatepark in London where skaters could spend time on hobbies in the Vans brand world. Boots re-imagined its beauty halls, removing all the traditional beauty counters, replacing them with Instagram-able furniture, ‘trend zones’, ‘discovery areas’ and live demonstration zones.

House of Vans in Chicago

As a result, an important part of any physical store survival strategy will be refocusing offline efforts on experiential retail and brand-building, with concept stores that offer a premium experience to drive loyalty. 

COVID will undoubtedly make this more difficult – in a note announcing the temporary closing of all Glossier’s shops and popups, the beauty company’s CEO and Founder Emily Weiss noted, ‘…we are leaders in retail, in so many ways. Our permanent and temporary offline experiences are more of a daily community event than a traditional store.’ In the immediate aftermath of lockdown, it’s likely that any such offline will have to take into account the need for low-touch interactions with customers, as well as myriad other health and safety considerations. 

In the long term, if retailers provide a safe space to go to and spend time with a brand in a way that is valuable to the individual, then we will gradually embrace the new version of physical retail as an element of everyday life. 

Technology to enable customer-first mindsets

How can retailers create premium brand experiences that match the convenience and digital-first nature of ecommerce? 

The hallmark of an excellent customer-centric approach is knowing the customer as an individual, and tech that offers insight into customer behaviour has made this possible. The key to success for physical retailing, therefore, is closing the data gap between online and offline shopping. 

Omnichannel shoppers will likely increase in number off the back of lockdown, and ecommerce and physical retail must no longer be seen as siloed parts of a retail business. Brands can use online data to offer consistent, personalised experiences across both by recognising the entire customer journey and rewarding individual loyalty: for example, allowing in-store staff to access customer profiles and make personalised recommendations.

Retailers must get creative to gather in-store insights in ways that make sense for each individual brand and that creates offline experiences that add up to a fantastic customer-first strategy. 

Charlotte Tilbury has invested in Magic Mirrors that allow people to photograph their looks and email themselves, allowing the business to join up an in store customer with an online one via email, for example. Farfetch’s store of the future has created a universal login that recognises a customer as they check into the store, and they have experimented with an  RFID-enabled rack that detects which products a customer is browsing and auto-populates their wishlist online. For a different store this data collection might come from smart-tagging or thermal imaging as a customer enters the store. 

Charlotte Tilbury’s Magic Mirrors

As online data should inform offline experiences, the same is true when the tables are turned;  data collected in-store is a vital part of offering customers great online experiences. Retailers must work with tech partners to remove the friction from collecting this data in-store, be this through a greater adoption of e-receipts to gather email addresses, or app-based data collection that provides incentives to shop in-store and use the app to search products, access discounts in-store or scan QR codes. Retailers should look to invest in ‘frictionless’ POS such as mobile check outs, which allow easier, safer purchasing, but also make it easier to capture data. 

Innovative retailers are also looking to replace shelving with installation-based tech that customers can scan and use their mobiles to find out more information. Adidas, for example, created an experiential store and invested in AR product displays. This allowed shoppers to point an iPad at an image then “view product videos and explore the boot’s technical specifications, which helped them understand the product better and make their final purchase choice easier” whilst gathering data on the customer. 

Of course, the vital next step of collecting offline data is to incorporate it with what you already know from a customer’s behaviour online, and using it to create better marketing experiences. We recently ran a webinar with Ryman, who worked with our partner Oddici to gather in-store data via a scratchcard game, and then encouraging them to claim their prize online. Using Ometria, the brand then sent tailored automated messages to customers who had been acquired via the competition, creating a new welcome campaign that looked to onboard them as online customers based on their offline activity. This is a great example of joining up the two into one customer view. 

Conclusion: towards a ‘joined up’ future

Retailers across the board require a fundamental reimagining of how they can provide value to customers now that traditional physical advantages are less relevant.

As lockdowns ease, I’m excited to see how the most innovative omni-channel retailers tackle the challenges of physical retail in the immediate aftermath of COVID-19. 

But while uncertain times may lie ahead, one thing is clear: the future competitive advantages in retail lie in the customer experience, and this will apply as much to physical retail as it does online. 

(p.s. re-opening your store and wondering how best to communicate the news with customers?  We’ve collated some great examples on our Pinterest board below)

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