The Reopening of Retail: Which Pandemic Changes Will Stores Keep?
The COVID-19 pandemic drove customers away from stores, shut down businesses, and ground the global economy to a screeching halt. Now that the world has begun to return, retailers must think strategically to prevent temporary disruption from becoming a permanent end.
When we talked to more than 400 retailers about how they adapted to the coronavirus pandemic and the regulations that followed, we found a group of people who were both flexible in their strategies and optimistic for the future. Our Reopening of Retail Report, released in June 2020, found that 80.5 percent of retailers believe sales will be no worse than slightly lower than usual for the first 90 days of reopening, while 22 percent expect higher-than-average sales in the first 90 days.
How do retailers expect that optimism will translate into revenue, though? Which changes from the pandemic do they think will help them, which changes will they scrap, and which of their new processes and policies will be codified into permanent practices? Let’s take a closer look at what our research discovered.
How Retailers Responded to COVID-19 Restrictions
Of all the changes retailers made, total store closure topped our findings at 51 percent. A little more than half of our survey population reported closing their stores entirely for at least a period of time. This should come as no surprise, given the prevalence of shelter-in-place orders at the height of the pandemic. While some retailers managed to stay open due to their status as essential businesses, most spent at least some of the time with their doors firmly shut.
No retailers plan to close stores permanently if they can help it, though, which makes the other changes on this list more relevant for the future. The second most common change, partial store closure with limited customer admittance, came in a distant second at 31 percent, while 26 percent of stores reduced their hours to save money.
Limited numbers also unfortunately affected employees, with 31 percent of retail store owners reporting they had been forced to lay off or furlough workers between March and June. Because of the limited in-store engagement opportunities, the same percentage also chose this opportunity to invest more in their online stores and websites.
Those online investments also translated to nontraditional sales opportunities. In our study, 21 percent of survey participants reported offering curbside pickup to help customers shop without going inside.
Surprisingly, only 19 percent of store owners reported changing their cleaning and sanitary procedures in light of the pandemic. This could be because most stores were closed, or perhaps store owners believed their existing cleaning procedures were sufficient. Whatever the case, customers and employees will remain health-conscious for months, if not years, so stores should communicate their cleaning policies clearly and often.
Near the bottom of our list, some stores offered delivery, either by sending out internal workers (17 percent) or outsourced labor (14 percent). There is some crossover here, with many stores using both.
Retail owners responded in different ways, but as the dust settles, only a few best practices will determine which brands sink and which swim.
Which COVID-19 Changes Will Remain?
Instead of examining every expectation, let’s look at the most popular responses and the most interesting disparities.
After the reopening, 36 percent of stores expect to stay open during normal hours but limit the number of employees present per shift. This measure topped all others on our list. Some stores may do this for health reasons, but many will limit employees more due to financial concerns and potentially lower customer traffic. In our survey, 31 percent expect to limit the number of customers allowed inside at one time.
Where 31 percent already chose to invest more in their online stores and websites, that number dips to 24 percent when discussing future expectations. As customers return, many stores may find it uneconomical to maintain both online and in-store presences.
The same applies to delivery and curbside pickup, with just 17 percent expecting to offer curbside pickup during reopening and 14 percent planning on outsourced delivery. Stores should watch their industries carefully to determine whether customers’ expectations shift regarding convenience.
Interestingly, while only 19 percent of store owners reported more robust cleaning procedures, 24 percent expect to implement more cleaning after reopening. This mostly covers stores that couldn't stay open during the shutdown but plan to change their policies once they return.
Taking a general look at our findings, retailers recognize that the world to which they return will be substantially different from the one they left. As stores feel out customer expectations, more will try out new offerings to improve their experiences, like curbside pickup or one-way shopping paths. As usual, the in-store experience will be the strongest predictor of which stores succeed. Read the full report to learn more about our findings on the reopening of retail.
Bobby Marhamat is the CEO of Raydiant Screen Signage, a digital signage provider that helps businesses turn their TVs into interactive signs that drive sales, improve the in-store experience, and reinforce brand messaging.
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Bobby Marhamat is the CEO of Raydiant Screen Signage, a digital signage provider that helps businesses turn their TVs into interactive signs that drive sales, improve the in-store experience, and reinforce brand messaging. Prior to joining Raydiant, Bobby served as the COO of Revel Systems where he worked on the front lines with over 25,000 brick and mortar retailers. Bobby has held leadership positions including CEO, CRO, and VP of Sales at companies such as Highfive, Limos.com, EVO2, Verizon Wireless, LookSmart, ServerPlex Networks, and Sprint/Nextel. When Bobby's not spending his time thinking about the future of brick and mortar retail, you can find him traveling, reading, or tending to his vegetable garden.