Navigating COVID-19: Manage Short-Term, Plan Long-Term
The COVID-19 pandemic has upended the entire retail industry, drastically changing the way most businesses operate.
This new reality presents a formidable landscape for physical comparison retailers, as many were already struggling with shoppers’ increasing migration toward online marketplaces. In this unprecedented time of contagion, the most significant focus for any retailer right now is employee and customer wellness. Still, many also remain concentrated on survival and cash preservation.
The rapid shift of customers from brick and mortar to online has many omnichannel retailers questioning whether these behaviors will stick around and how to survive in the meantime. And, unfortunately, one-size-fits-all answers may be few and far between as the trends seen across the market are primarily micro and not macro.
The patterns of human traffic have changed in unique ways cross-regionally. While the response across the market has not been uniform, there are some successful strategies that retailers can take to make an impact now and pay dividends down the road.
In terms of expenses, occupancy costs are typically No. 2 or 3. Consequently, reducing these costs is critical. Forward-thinking retailers should dive deep into lease terms to better understand cancellation and co-tenancy clauses and determine how much wiggle room they may have to renegotiate the leases and payment terms.
The current climate also represents an opportunity for assessment and closure of underperforming outlets. Retailers should review portfolios by measuring the performance of individual locations against trade area potential and make both immediate and long-term decisions.
Together with optimizing portfolios, smart retailers are capitalizing on the benefits of the omnichannel by increasing attention and spending on other channels to reach customers. In combination with a growing presence in other channels, many are offering curbside pick-up to mitigate the closure to foot traffic.
Retailers are doing their best to share incentives to maintain personal customer relationships as well.
One macro trend seen across the market is the surge in interest in personal shoppers and third-party platform applications. It may be too early to tell how much demand will remain reoriented to personal shoppers; however, retailers should consider options such as shifting staff away from registers and front-of-store operations to in-store personal shopping to answer this current and possibly permanent demand.
The rise of personal shopping may require entirely different store layouts or systems that accommodate changing customers but also demonstrates that successful retailers will need to be agile when unanticipated trends arise after the fallout from COVID-19 becomes more measurable and understandable.
Trends such as this that have occurred during this time are unlikely to fade completely. Many will become evolving facets of the retail industry for years to come and change retail experiences dramatically.
Where do retailers go from here? They need to recognize — as the data has shown — that brick and mortar supports and strengthens the omnichannel. Brick and mortar locations drive deeper relationships and brand loyalty. Therefore, it's crucial to maintain this relationship with consumers beyond the marketplace shocks accompanying the coronavirus.
To maintain this presence across the omnichannel, retailers must dive deeply into customer behavior and trend metrics. These powerful bellwethers will inform choices regarding store location, number, and footprints.
The answers aren't always clear. For example: Based on Tango's AI insights, when considering consolidating three stores down to one, sometimes the best bet is to pick a brand new location instead.
Unexpected solutions such as this suggest that merchants and retailers are going to need thoughtful approaches to analytics that demonstrate customer's habits and demographics to relaunch post-pandemic successfully.
It's more important than ever to understand the trends driving the success of retail locations. Knowing where you can shutter specific sites, remodel others or select whole new placements will be essential to streamlining your operations. The beneficial symbiotic relationship between online and physical storefronts possible through the omnichannel is more relevant than ever.
AI-powered data can provide the insights needed to relocate, reboot, and refresh your brick and mortar presence and approach. These times might be extraordinarily tough, but they also present tremendous opportunities for agility, scale and integration across omnichannel retail models.
How can retailers improve product discovery, drive inspiration, and uplift performance? In this session, you’ll hear how EyeBuyDirect – one of the US’s leading online eyewear retailers, is collaborating with Visenze on AWS to achieve 28X ROI.