The Post Covid19 World: Customer Expectations in Retail

The coronavirus has taken many lives and wrecked many a business. Let’s look at the impact on retail, specifically how the virus and the lockdowns has affected customer expectations.

The coronavirus has taken many lives and wrecked many a business. Let’s look at the impact on retail, specifically how the virus and the lockdowns has affected customer expectations.

I think it is safe to say that the customer expectations on retailers have shifted massively in the past few months. The customers have realized the benefits of actual omni-channel sales in a socially distanced world and the retailers that have only made a token effort will soon find that the customers are no longer going to accept a subpar experience.

Lockdown and social distancing’s impact on retail

So, when in lockdown, you cannot go to your local fashion retailer and buy a t-shirt or a pair of socks, do what do you do? Order online.

Even if you aren’t in lockdown anymore you may want to socially distance and browsing for a pair of socks in a crowded store doesn’t seem all that appealing so you order online, and at most, pick up your new socks curbside by the store.

Even when the world has emerged fully from lockdowns, the customers will be used to ordering online, and expecting a seamless ordering experience across sales channels. This is especially true for customers who have previously avoided ordering online, such as older (at risk) customers.

Changing customer expectations

Great retailers have weathered the storm of Covid19 and have adapted to the new age of real omni-channel sales. I personally thought customers would not be expecting a proper omni experience for at least a few years but this spring has shown me that we are in the omni-world already. No excuses, customers will not accept it for much longer

Seamless omni

So what do I mean by real/seamless omni(-channel), really?

Integrate online and offline inventory, make it available to purchase in either channel. Use stores to fulfill online orders, and either ship from the store or let customers click and collect.

Curbside pickup will be more popular where applicable and reasonable. City center shops have less scope for curbside pickup than big box retail locations with ample parking. I see curbside pickup being a big thing for electronics, furniture and to some extent groceries.

Seamless omni means that any type of order, be it online-to-home, online-to-click & collect or shop-to-home-via-online, is a first class experience. This is a challenge for most retailers, especially those with older IT infrastructure and a long brick-and-mortar retail history.

A real omni experience requires breaking up long established silos within organizations and aligning incentives so it is of mutual benefit for staff and managers within both channels to sell items thorough and cross either channel. This change of mindset requires strong leadership within the management team.

If you are lagging behind, do not wait.

There are many retailers lagging behind in their digital transformations combined with facing real cash flow challenges in the short term. I only have one advice; adapt as quickly as possible. Do not wait. The customers will surely not adapt their expectations to your timetable.

It will be expensive and complicated for many of the older brands to change and a lot will go out of business due to the shift in shopping patterns and expectations. This is not all bad as new competitors will rise and have a chance to meet customer expectations in a world where rents in attractive locations could be significantly cheaper.

As a side note, be sure to negotiate turnover rent, and consider how online returns in store, Click & Collect and other initiatives affect the rent calculation.

Mediocre stores in mediocre locations = big risks

There are a lot of mediocre stores in mediocre locations. Take the opportunity to reevaluate the store portfolio. Lots of malls and high streets across the world will not recover from Covid19 and most larger brands will have a significant number of stores that are no longer be profitable.

Act early to, at least, reduce rents in these locations and cut costs but the best course of action is likely to unprofitable close stores. It sucks, for the communities and for the staff, but for many retailers it will be the difference between survival and going out of business.

Don’t waste the crisis

Above all, don’t waste this crisis. Take the opportunity to adapt to the customer expectations, align internally around a true omni-channel strategy. Close unprofitable stores and streamline operations to meet the customer’s expectations.

The virus has caused untold damage but it has and will continue to focus minds on the future and the future is already here, years earlier than expected.


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