We’ve talked before about how the pandemic isn’t to blame for everything going on in retail. A consumer-centric retail strategy has been needed for a long while. A lot of the writing was already on the wall for those brands that were slow to embrace the ever-evolving nature of retail that is required to remain viable. The pandemic simply accelerated the tipping point for many – including department stores like Macy’s, that made the department store loser list.
The Holidays Revealed Retail Strengths and Weaknesses
Overall retail holiday sales were up by 3%, ecommerce was up 49%, according to Mastercard SpendingPulse™. However, even with the slight gain in sales over the holidays, total retail sales in department stores dropped 10%. Yet these weaknesses in department stores sales were only accelerated by – not caused by – COVID-19. Macy’s is representative of dinosaur retail. Evolution was – and is – well underway.
eCommerce and In-Store Were Already Merging
A consumer-centric retail strategy requires a seamless experience. This merge was accelerated rapidly during the pandemic. Customers see ecommerce and instore retail as two sides of the same coin. Any brand that was, in the past, viewing ecommerce as a threat to in-store was forced to quickly realize how integral the two were to each other. This trend shows no signs of slowing. According to destination CRM,
Stop Thinking Omnichannel and Start Thinking Consumer-Centric Retail Strategy
The wake-up call has been issued to retail. Already, those least prepared for change have not survived and more will falter. To survive in 2021 and beyond, decisions about retail strategy must be made through the lens of consumer experience. JRNI CEO John Federman said this:
We use phrases like ‘omnichannel’ to describe scenarios as though every consumer wants to move seamlessly across everything a retailer, for example, has to offer. However, we have to turn that idea inside out and remember that for consumers it’s all about experience, and always has been. A consumer will choose the experience they want, based on the service or goods they are buying, and then the channel. The businesses that will be rewarded with brand loyalty are those delivering great experiences in stores and online.
Future Expectations: It’s All About the Customer
Consumers also adapted their behavior at an accelerated pace and will be more fluid in their transitions between online and offline in 2021 and beyond. With elevated expectations for a seamless shopping experience, consumers now demand flexible fulfillment, personalization, safety, and sustainability as the price of entry into their wallet.
It’s no longer about having the biggest inventory or the deepest sales. Consumers want to feel safe; they want flexibility about how, when, and where they shop.
The Way Forward
As consumers change, you need to relearn their needs. And as trends shift, everything – from shifts in purchasing to footprint to labor – will need to be analyzed to determine your go-forward strategy.
As the leading provider of outsourced real estate services for wholesalers and retailers, ASG is here to help you. From emerging to established brands, we help our clients optimize their real estate investments through our practices in Analytics and Strategy, Tenant Representation, Store Design and Construction, Lease Administration / Rent Accounting / Audit, and Real Estate Technology. Founded in 2002, we have worked with over 100 brands, and we’re at the forefront of redefining the future of retail in a post-pandemic world.