As states across the U.S. begin to get back to business — not as usual, but in phases — we take a look at the evolving retail landscape and how people will shop in a post-pandemic world.
Barbara Kahn, professor of marketing at the University of Pennsylvania’s Wharton School. Author of "The Shopping Revolution: How Successful Retailers Win Customers in an Era of Endless Disruption." (@barbarakahn)
Neela Montgomery, CEO of Crate & Barrel. (@CrateandBarrel)
On how malls will look in a post-pandemic U.S.
Nathaniel Meyersohn: “The mall environment is going to look so different. I mean, malls were already struggling because of online shopping. And as well, because of discount retailers like T.J. Maxx and Ross stores. And this mall environment is going to be incredibly unusual. You know, we'll have social distancing markers everywhere; plexiglass at cashiers; play areas will be shut down, the common areas of the mall will be shut down. So I think it's kind of the first big test of this new retail environment that we're in. You know, these malls and department stores, they play up the experience at these places. Are people going to be looking to be roaming around stores right now, browsing aisles, trying on clothes, you know, leisurely activities? I think there's a lot of uncertainty, and we're going to see how it plays out.”
On how the retail landscape will respond to broader social and economic changes
Doug Stephens: “I think so much of the retail landscape we see around us today is predicated on the idea that thousands, tens of thousands, perhaps millions of consumers each day commute into cities. And so the structure of retail, the locations that retailers have chosen, the access and egress of those locations are all sort of predicated on this flood of consumers to work each day. And that could be the big change.”
On how the pandemic is boosting the biggest retailers and damaging faltering ones
Nathaniel Meyersohn: “Before the crisis, you had a split between strong retailers like Amazon, Wal-Mart, Costco, Target, and weaker companies like Macy's, J. Crew, JCPenney, Neiman Marcus. And what's happening now is that the stronger players are getting even stronger, becoming even more dominant, and the weaker ones that have had to close stores during the crisis have really been devastated. So we're seeing a real split between winners and losers, and this crisis has really reshaped the industry."
On how businesses can adapt to a post-pandemic retail landscape
Barbara Kahn: “One thing that characterizes the difference between the winners and losers, I believe, is an emphasis on omni-channel, retail. So people no longer think of retail as online/offline, but they think of it as a seamless integration between the two. Now, from a customer point of view, that's just like making sure what you see online matches what's in the store. But from a retailer point of view, that's lining up all your supply chains, your logistics and all these other things. And the bigger chains like Wal-Mart and Amazon, they're much better integrated between online and offline. The smaller retailers and the retailers that are struggling are not as integrated. And that is going to be a trend going forward that I think you'll see separating the winners and the losers.”
On the existential crisis independent retailers are facing
Doug Stephens: “There was a recent piece of research that was done that suggested that 25% of independent retailers in the United States maintain that they can't prolong through this crisis for more than two months with no business. So, you know, when you think about how that could potentially change the complexion of the retail landscape on a local level, it's astonishing. And we can't forget, too, that these small retailers, you know, are responsible for about 40% of revenue in the retail industry as well and massive amounts of job creation. So not not to mention just the sheer uniqueness and creativity of many of the concepts that they've come up with. So it's really important, I think, that we backstop these businesses. You know, what we see going on right now is a lot of bailing out of cruise ship lines and airlines and a lot of legacy industries. But the truth is, what we should be backstopping are many of these vitally important grassroots retailers at the local level.”
On how retailers can boost consumer confidence
Barbara Kahn: “One of the things that is going to be very important is that the consumer is going to have to feel it's safe to go into that store. We're going to have to recognize that the environment has changed. You're seeing it now with some of the grocery stores that are opening. So what does that mean? People are going to, at least in the near future, they're probably going to be wearing masks. They're probably going to practice social distancing. They're probably going to limit the number of people that can go into a store.
"But as people get used to that environment, they may start to gravitate towards these physical stores. I think people are craving social interaction. They want to get out there. They don't like the sameness of sitting at home looking at their computer screens. They really want to interact. So if the stores can respond and respond quickly enough, I think as we slowly get used to this new environment, we can start to increase consumer confidence as they feel safe and they feel better about the outside environment.”
From The Reading List
Axios: "Survival of the biggest: Coronavirus transforms retail" — "The titans of the retail industry — Amazon, Walmart, Target and Costco — are poised to come out of the coronavirus crisis even stronger and more formidable than they were before, as smaller rivals suffer and wither."
NBC: "Retail has been on life support — coronavirus could pull the plug" — "With hundreds of thousands of stores closed nationwide, the coronavirus pandemic is accelerating dramatic changes across the retail industry that had been underway well before the viral outbreak hit the U.S., according to analysts."
Forbes: "The Domino Effect: 5 Ways Coronavirus Will Forever Change Retail" — "Following World War II, i.e. the last event of a similar magnitude to what the world now faces with coronavirus, the United States was focused on controlling the spread of communism. One popular theory at the time, domino theory, suggested that the rise of communism in one nation could quickly spread into other nations. And, while this Cold War-era paranoia is no longer relevant in today’s day and age, the concept is nonetheless still useful in examining what impact the events of the last few weeks will have on the future of many industries, especially retail."
CNBC: "Curbside pickup at retail stores surges 208% during coronavirus pandemic" — "The coronavirus pandemic is making curbside pickup much more valuable to customers and more beneficial to retailers, as many stores remain shut to try to curb the spread of Covid-19."
Fortune: "The retailers that are smartest about shopping tech will finish on top after the coronavirus" -- "It may be a misnomer to call anyone in retail a 'winner' right now, when stay-at-home and social-distancing measures have shut down hundreds of thousands of U.S. stores and threatened consumers’ spending for the foreseeable future. But look at the few chains that have managed relatively well in this chaotic time, and you’ll gather clues about what it will take to come out ahead in the industry, both now and long after the virus has been contained. "
This program aired on May 1, 2020.