The global pandemic that took hold last winter has inarguably changed the retail landscape—perhaps for good.
At National Retail Federation’s virtualized Retail Big Show Wednesday, Mitch Joel, journalist and founder of Six Pixels Group, Inc., dubbed this strange moment in time the “Great Compression”—a rapid adoption of new buying behaviors and an unprecedented reliance on digital, spurred by the Covid-19 crisis.
While the world was quickly becoming more tech-savvy pre-pandemic, the events of the past 11 months have forced consumers young and old to rely on technological solutions for the most mundane of daily tasks, he said. Children have quickly learned how to use Zoom for distanced learning on computers and tablets, while many seniors who were e-commerce-averse are now ordering provisions online rather than braving the stores. “The stuff that we expected to take until 2030 happened all of a sudden in the span of a few months last year,” he said.
The onset of the pandemic prompted retail to undergo three “stages of sudden evolution,” Joel says: to survive, sustain and finally, to strive for recovery.
The early days the crisis represented a mad scramble simply to withstand its pressures, with many retailers attempting to understand which areas of their businesses were being impacted and which products and services might be considered essential to cash-strapped and anxious shoppers. Many organizations were unable to weather this period, Joel said, driving a spree of economic carnage, namely bankruptcies.
By August, within what might be considered the normal back-to-school timeframe, “we headed into more of a sustain model,” Joel said. Surviving retailers came to grips with the pressures of the pandemic and developed forward-looking strategies, like expanded omnichannel services and enhanced e-commerce platforms, to deal with a consumer migration online and away from stores. “Every retailer had to figure out, ‘How do we engage our customers? How do we engage our employees, our associates, our team members?’” during this time, he said.
Prior to the onset of the coronavirus, e-commerce represented just 15 percent of all business exchanges, a number that rapidly shot up to 50 percent during the long months of lockdown, he said. While the reopening of retail will certainly prompt another shift in that breakdown, Joel doesn’t believe the web will lose much ground going forward, and it certainly won’t return to pre-pandemic numbers. That’s significant, considering that many experts predicted online buying would represent just 30 percent of all commerce by 2030.
The appeal of physical retail has also diminished over the past year. Shopping—once a relaxing, social activity that gave consumers “something to do”—became fraught with risk and discomfort, Joel said. While in-person browsing and buying may regain their appeal with the widespread dissemination of the coronavirus vaccines, online options have also gained ground during this period, becoming more experiential and less transactional—a fun way for restless shoppers to pass the time.
“People don’t buy stuff, they buy experiences—this is a trope we’ve heard forever,” Joel said. Most of the industry is still working out the kinks that make online and omnichannel experiences convenient, seamless and engaging for consumers, and have yet to enter the final stage of striving for recovery.
“We experienced something that forced us to do things faster, and innovate, and think differently to survive to get to that point to sustain,” Joel said. Businesses shouldn’t pull back on those efforts once the retail landscape begins to return to normal, he added. Those that attempt to go back to the status quo now that consumers have become used to a new way of transacting and interacting with their brands risk losing ground.
“Don’t be that brand,” he warned. “If innovation was forced and pushed in this way, I think this is a tremendous opportunity for you to keep it going to grow and to keep that speed of innovation going.”