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Virus Has Rewritten the Store’s Role in Retail, Experts Say

The e-commerce revolution has been underway for years, but this spring’s coronavirus crisis—and the retail shutdowns that have happened as a result—have accelerated the push to bolster online business.

Customer acquisition, brand messaging and user experience have become increasingly important themes for brands of all shapes, sizes and business models. In a Tuesday webinar hosted by The Lead Innovation Summit, industry experts weighed in on how to engage shoppers during an unprecedented time for retail.

The crisis has given marketers a chance to rethink strategy, said Sonal Gandhi, chief product officer at The Lead. Prior to the pandemic, brand promotions aimed to inspire transactions and acquire new customers. But now, brands are opting to promote the idea of community and trying to retain loyal fans.

Brands have effectively “stepped off the gas” when it comes to large-scale marketing campaigns that could be deemed tacky in light of current events. And they’re being more mindful than ever about the content they choose to share through their social channels. “They’re reviewing messaging constantly because in this moment, consumers’ opinions are constantly changing,” Gandhi said.

COVID-19 has undoubtedly drawn new eyes to e-commerce. “Whether you’re a legacy [brand] or a DTC, there’s been a massive urgency to look at digital infrastructure,” she added. Brands are being forced to examine their sites with a critical eye to assess their stability in the event of increased traffic.

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Companies that find themselves at a disadvantage must hire data analytics professionals and others to optimize their online infrastructure. “There’s a new urgency to that, it’s been accelerated,” she said.

Brick-and-mortar retailers have enacted creative solutions, too—like shifting in-store staff to support digital teams, she said. They’re also retraining associates to provide online services like consultations, clienteling and virtual styling.

These strategies are wise, according to Nate Checketts, CEO and co-founder of Rhone, who believes the online experience is here to stay.

“It is going to take a very long time for the brick-and-mortar world to rebound,” he said, adding that the sector is unlikely to recover completely and remain as large a piece of the retail pie as it was in the past.

“I think it will still have its place and it’s a great form of distribution, but I would compare it to radio or television in the age of digital streaming,” he said.

Still, Checketts cautioned against overcorrecting for a historical dependence on physical retail by forgoing it altogether. Brick-and-mortar isn’t dead, he insisted—“there’s just an efficient way to spend on that channel, and we’re going to do that.”

Rhone’s retail partners and physical stores were all driven out of commission by the shutdown, and Checketts said the brand has seen a huge uptick in online sales. Now, the company is funneling much of its efforts and funding into reaching shoppers on the web.

“In mid-April, people started saying, ‘We’ve got to keep companies we love in business,” he said. That attitude has helped keep brands like Rhone alive.

While the brand has addressed the very real issues on consumers’ minds—like health, safety and equality—Rhone has largely returned to using the voice and tone it has cultivated from its inception. Checketts said it’s imperative that brands do their best to drive commerce, despite the challenges.

“We are trying to keep people employed,” he said. “We’re marketing new product now, and I don’t think we should be shying away from that.”

In spite of the uncertainties of the current moment, shoppers are more willing than ever to try out new brands and products that they find compelling, according to Sherene Hilal, senior vice president of product marketing and business operations at Bluecore.

“We’re seeing an increase of first-time purchases in the consumer world,” she said. While many predicted that shoppers would fall back on trusted brand relationships, Hilal said they’re actually taking chances. New DTC startups are actually finding it easier to reach shoppers, who are glued to their devices.

Hilal also noted that brands relying on blowout promotions to save their spring season sales might not be getting the results they were hoping for. Many employing a markdown strategy to promote cash flow and liquidity haven’t been seeing high conversions—and they’re taking unnecessary margin hits.

The data suggests that steep discounts could be doing more harm for brands than good, she said.

Still, Hilal said brands should be encouraged by the uptick in virtual shopping. “We are seeing more online activity from previous online shoppers and more first-time purchases from those who haven’t historically purchased online,” she said.

Like Checketts, Hilal believes the shift to online is “permanent, and the role of stores will change.”

In January, retailers were surveying a retail landscape where online made up around 20 percent of total sales, she said. Now, the vast majority of commerce is happening on the web, and retailers must work to envision what the permanent split between physical and online channels will look like.

“Digital will become the forefront of how brands architect strategy and retention strategy,” she said. “Better online experience is where real growth will come from.”

Nikhil Khosla, former vice president of global brand strategy for Ralph Lauren, said this new reality represents a “seismic shift” in the business model for legacy brands.

Brand culture will have to change in order for these heritage players to stay “alive and relevant,” he said. Labels like Ralph Lauren can learn from DTC startups, which develop a laser-like focus on key issues and products, and expertly communicate their missions to shoppers.

Large organizations are typically slower at making changes and reaching new audiences, but “brands will need to become more agile and ready for shifts,” he said, in a world that is rapidly changing. Legacy brands should run pilots on products and campaigns, “fail quickly, and then keep rolling out,” he said. Those learnings will prove invaluable to future strategy.

Brands won’t be able to skate by on cachet alone, he warned. “Aspiration needs to be made relevant to today’s world,” he added. Companies must tap into the context of consumers’ changing values, and ask themselves what their shoppers would like to see.

Brands with an “actual statement and perspective on the world” will emerge victorious, he said.