Retailing post-COVID-19 will be transformed

by Dave Nemeth. Trends and buying patterns are dictated by consumer attitudes. These attitudes change continually, and for several reasons, with the economy and large-scale disruptions being two of the main driving forces behind this change. The COVID-19 pandemic arrived quickly and seemingly from nowhere. In the blink of an eye we were social distancing and, shortly after that, we found ourselves in a complete lockdown, with only essential services allowed to continue operating.

The effect has already been catastrophic within the retail sector, with those that were already battling to keep their doors open now facing the stark reality that they may not reopen at all when things return to the ‘New Normal’. The effect of this global disruption will change the course of business forever, hence the term New Normal. Anyone who expects things to be the same as they were pre-COVID-19 is in for a rude awakening.

I have been closely following the sentiment of individuals and businesses, both locally and internationally, since the inception of the virus and believe that the changes in consumer behaviour will prove to be quite drastic.

Disloyalty

Those retailers who  thought they could get away with price hikes during the build-up to lockdown, will not be forgotten. Consumers may currently continue buying from you due to a lack of choice, but when freedom of movement returns, your behaviour will be remembered. Consumers see these price hikes as a direct personal attack and are starting to view the brands concerned as unethical and unempathetic. It will be exceptionally hard to correct the wrongs which are being perpetrated over this period and the backlash will continue for months after lockdown ceases.

Similarly, those who are doing incredible things such as rewarding all staff, maintaining fair pricing, taking measures to protect frontline staff and doing all in their power to support the consumer, will be remembered. The behaviour of brands will continue to be evaluated by the public and this goes for their online presence as well. Those which continue to only push products, will be seen as not being in touch with the human psyche. Storytelling and goodwill are certain to be rewarded.

Downsizing

Online buying has increased over the past few weeks and people who never considered this method of purchasing are suddenly becoming au fait with it and feeling more comfortable shopping this way. People will not flood the malls and retail stores as they had previously done because crowds are no longer appealing to the majority. It makes no sense in having huge retail stores if the foot-count is down, especially in the clothing, electronics, furniture and specialised retail sectors. Experiential spaces are the future for brick and mortar stores, enticing consumers by offering them a completely different experience to that which they will find online.

Reducing the size of stores will alleviate high rentals being demanded by landlords and will also require less staff and stock holding in individual stores. There will be a greater focus on hygiene in retail outlets due to cleanliness and sanitisation being embedded firmly in our brains and will subconsciously remain forever.

Collaboration models

New business models between landlord and retailers are imminent due to the strain most are currently facing. Expect to see basic levies and percentage of sales becoming the new norm within the next few years. Malls will have to become more human-centred and fight hard to get customers to fill them. If they don’t get the feet and the tenants don’t get the sales, it will be a lose-lose situation, unlike the current model that only favours the landlord. Smaller stores will initially have a tough time negotiating these changes but, as pressure is put on by the  larger retailers, the new model will become standard practice.

Restaurant overhaul

Sadly. many restaurants will not survive this period of zero trade. Those that do, will be looking at creative methods of bringing in additional revenue. Some of these changes could include for example, a differentiated takeaway selection; healthy weekly meals that can be purchased via subscription; and they could possibly even include school lunches. The layout of many restaurants will also have to change as people will start wanting more space between themselves and fellow diners. Those which have kiddies’ play areas will not just have to have the staff who look after the children, but also those who are continually sanitising the playground equipment.

Increased digital investment

Most large-scale retailers have invested heavily online over recent years with some really seeing the return on their investment. Smaller operators will be looking for affordable solutions in improving their online presence as well as promoting online shopping of their products. Courier companies will have to adapt and formulate viable and affordable solutions for these smaller companies. The way in which  brands communicate online, regardless of size will also change drastically. Those which  connect with potential consumers in an emotional way will gain a genuine following and will reap the awards. It is time to realise, more than ever that a one size fits all approach simply won’t work. Appealing to different demographics and LSM’s will be a real challenge.

The bottom line is that when the lockdown is over it is not business as usual. The New Normal requires an innovative approach, an in-depth unpacking of: Who you are, What you are, and Why customers should spend their hard-earned cash with your brand. Consumers want to see what brands are doing and not merely hear about them through digital communication and advertising.

Columnist, Dave Nemeth is Retailing Africa’s retail analyst; and a trend forecaster and business consultant at Trend Forward. He describes himself as a design thinker, innovator, business re-designer, trend analyst, keynote speaker and writer. 

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