What will the “new normal” look like for retail?

Adjusting in-store and online shopping experiences to address new realities

After what have surely been some of the strangest few months for the retail industry in recent memory, brick-and-mortar stores are starting to re-open in many areas that have been worst-hit by Coronavirus outbreaks. Consumers and retailers alike seem enthusiastic about this return to some semblance of normality: some keen shoppers were seen piling into London’s flagship Nike store when it reopened earlier in June, and in the absence of most out-of-home entertainment options, shopping trips are becoming established as a highlight of many people’s weekly routines.

The prospect of reopening is not without its challenges. Brick-and-mortar retailers all over the world are figuring out how to conform to a variety of new regulatory requirements, and nearly everywhere there will be a need to reassure nervous consumers who have become used to shopping conveniently and safely from home that it is safe and desirable to return to physical stores. That won’t be a straightforward task: in the U.K., for example, YouGov has found that 46% of consumers are uncomfortable with the idea of shopping in newly-reopened stores.

As they reopen,  retailers will need to balance measures aimed at getting high volumes of customers through their doors with those designed to ensure customer safety, and to do all of this while providing a better customer experience than ever before. The “CX Factor” could in fact become the crucial differentiator between the post-Covid retail winners and losers, if customers continue to avoid stores that don’t offer a compelling reason for visiting them in real life. Customer experience has long been an important differentiator for brick and mortar stores: according to Kantar, more than two thirds of customers are more likely to choose a brand if it exposes them to new experiences or sensations. But a certain degree of customer inertia was likely helping to keep some underperforming retail brands profitable, even as e-commerce competitors and those with distinctive in-store offerings were eating into their profit margins. This status quo has been well and truly shaken up, and customers who have been forced to form new habits can’t now be relied upon to automatically retain their old loyalties.

Some of the restrictions retailers will face during this “new normal” phase will undoubtedly pose challenges: reduced stock offerings and limited ability to try on items in fitting rooms are unlikely to be popular with consumers. Creative retailers will find ways to differentiate themselves and come up with innovative new approaches to customer service, for example by offering more personalised experiences and more options for customers to engage online. Some luxury brands are already shipping direct from stores using a premium delivery service like Addison Lee, while others are setting up luxury drive thrus for a click-and-collect-style service, complete with extra styling. Elsewhere, staff at some clothing retailers are arranging video calls with customers to personally show them the latest merchandise before they make a store visit, booking fitting rooms for them with specialised apps and viewing their wish lists online. Others are using Instagram live streams to publicise new product launches. Augmented Reality looks set to truly get its moment in the sun in 2020. Virtual changing room apps that allow a garment to be “tried on remotely” in store could quickly go from being a fun novelty to a truly practical solution, allowing customers to steer clear of the hassle of returning items and retailers to avoid the subsequent quarantining of returned products.

The challenges facing brick-and-mortar retailers are significant. GDP growth has dropped hugely in the U.S. and much of Europe in the first half of 2020, and the public are understandably tightening their belts by cutting down on discretionary spending. In the continuing absence of many forms of out-of-home entertainment, though, in-person shopping experiences may prove popular as countries reopen this summer. Retailers that can provide a good enough reason to visit them in person will have a distinct competitive advantage. So will those who can provide a great and distinct online experience, as consumers adapt to new ways of shopping. Those who can do both will likely find they have a winning combination.