As the coronavirus crisis continues, nobody knows when everyday life will be possible again. Yet one thing is certain: the longer this state of emergency lasts and the stricter the measures to slow the virus’s spread, the more likely it is that there will be no return to the status quo.
The best way forward for retailers is to plan ahead based on scenarios that outline a possible future. These scenarios include changes in social behavior (a return to cosmopolitan communities vs. further social cocooning), consumer behavior (hedonism and spending vs. continued minimalism), travel behavior (globetrotting vs. “purpose before playa”) and changes in work behavior (work-life balance vs. security and a return to tradition).
No matter how each retailer sees the future, it should already be implementing actions and measures to prepare for the new normal. However, companies must avoid the risk of reactivity and getting lost in short-lived measures.
The shift in consumer behaviour and preferences presents a great opportunity for retailers to rethink their brand values, positioning and, more importantly, their go-to-market approach. Particular attention must be paid to the point of sale (POS). As physical touchpoints are under scrutiny, the role of the POS needs to be fundamentally rethought. Online shopping proved to be reliable and acceptable during the crisis, so physical stores may increase in relevance as the destination touchpoint for experiences. In this setup, physical touchpoints could be less crowded with products and have a more spacious showroom character, while seamlessly integrating the digital space as an “endless aisle” for replenishment of goods not available in-store.
Similarly, the merging of digital and physical touchpoints is becoming more important than ever. New, innovative service offerings could contribute to a smooth customer journey in the future. Observing and anticipating consumer behaviour is of great importance in this regard, as well as to coordinate touchpoints and add or expand service offerings. Adjusting the brand, target group and value proposition requires rethinking the company’s offering based on customer needs. This affects the relevance of certain product categories, but also the characteristics of products themselves. Depending on the scenario, the origin, ecological and social footprint and the longevity of products become increasingly relevant. Retailers must seek a close exchange with existing and new target groups, to identify their needs and sharpen the product range accordingly.
This proximity to the customer is also essential for the development of new products. The role of experience in retail will continue to be crucial for consumers when it comes to choosing the right product. Retailers should not take for granted that consumers will fall back into purchase patterns that are purely product-price based. The desire for the right experience could well increase, as consumers tend towards more careful and selective purchases in the future. Retailers are best advised to double down on experience rather than trying to turn back time.
Retailers might also rethink their retail footprints: is the megastore approach still future-proof post corona? Or is this an opportunity to diversify the footprint and include a mix of store formats, ranging from flagship stores to shop-in-shop or pop-up store concepts where local customer proximity is higher and micro-segments can be targeted more efficiently?
While the lockdown has undisputedly created a financial threat to retailers globally, it also offers the chance to rectify omissions of the past. The time is ripe to deepen relationships with customers, expand or hone product offerings, and push forward the inevitable shift to full digital integration and immersive, transformative experiences. And while each retailer’s strategy will be unique, they are united by one factor: this shared and unprecedented moment of opportunity.