With the majority of the country open for business amid rising numbers of Coronavirus cases, conversation has turned to how to provide customers with safe shopping environments that are also convenient. A recent survey from Coresight Research showed that two-thirds of consumers plan to continue avoiding public places after restrictions end, with shopping centers top on the list of places they won’t go. This has impacted how stores view everything from online versus in-store shopping to trying products and is even testing the utility and necessity of stores themselves.
Consumers are also more willing to try new shopping models than they have been before. A recent study by McKinsey forecast that organizations that can quickly reimagine their omnichannel approach to create a distinctive customer experience will recover faster from the pandemic. The study also found that digital-first and omnichannel retailers have been able to pivot more easily than those that prioritized physical stores and face-to-face engagement.
Below I offer some ways retailers are exploring new technologies, innovating and working to meet consumers at the intersection of safety and convenience.
As gathering in large groups limits large-scale fashion shows or showroom appointments, completely digital virtual showrooms are gaining popularity. These enable buyers to recreate the buying experience through an online space that showcases products using high-resolution imagery and an interactive user interface. Buyers can review new collections, explore the selection and complete purchases right on the same platform anytime and from anywhere.
Virtual showrooms are also being embraced by consumers, with a few clothing brands such as Uniqlo, Lacoste and American Apparel opening virtual showrooms and fitting rooms to allow customers to try on their outfits in virtual spaces.
Kristin Savilia, CEO at wholesale platform and leading virtual showroom provider Joor whose clients include Neiman Marcus, Kate Spade and Balenciaga, believes that virtual options are “not a bad thing for an industry that has historically traveled an excessive amount, overproduced samples and generally needs to be more sustainable in its practices.”
Expansion of Curbside Pickup
Curbside pickup was a bridge for many retailers that were dark during the pandemic and whose customers were not allowed in-store. Now, with shoppers accustomed to curbside pickup as a safer, no-contact option, the trend is likely here to stay. According to Naveen Jaggi, the president of commercial real estate services firm JLL’s Retail Advisory team, consumers will likely be more hesitant to get back to stores, since they’ve adjusted to being home for so long. And retailers have rallied to meet these expectations with most stores now offering curb-side pickup indefinitely.
Walmart in particular recently expanded curbside pickup beyond grocery so that customers can now pick up from other departments, and can do so curbside. They have merged their grocery and store apps to enable customers to shop in both places at once, and seamlessly. Target also has experienced growth in both online sales and in demand for its curbside pickup service called Drive Up during the pandemic, expanding now into grocery.
Walmart is going a step further, enabling customers to reserve a no-contact pickup or express delivery time to have items delivered in less than two hours. Walmart has expanded the service to nearly 1,000 stores, and had plans to offer it in 2,000 stores by the end of June.
Our recent survey found that many consumers are not comfortable going back into fitting rooms. About 49% of millennial consumers said they would not feel safe trying on clothes in dressing rooms, even after the pandemic subsides. And that percentage was much higher for baby boomers, at 71%.
Retailers had been toying with the idea of virtual fitting rooms for years before the pandemic, but the concept had been slow to scale. Due to COVID-19, this could be changing. As an example, a recent CNBC piece showcased a start-up that has developed 3D technology to scan a consumer’s body in under a minute and tell them what size they are for different clothes at different retailers. The company, FIT:Match, has teamed with Brookfield, which owns malls such as Brookfield Place, with the first open slated for Oakbrook Center in Chicago in mid-August, followed by Glendale Galleria in Los Angeles and Stonebriar Centre in Dallas in mid-September.
Chief Executive Haniff Brown told CNBC, “How do you make apparel shopping profitable? You limit returns, and you increase conversion rates. You don’t have to spend as much money on marketing for a person when you know them already.”
Store-Based Fulfillment/Last-Mile Delivery
Delivering products to consumers faster, safer and conveniently has been pressing retailers to expand into strategies that had already been gaining traction prior to the pandemic.
With store closures and bankruptcies mounting even before the pandemic, empty stores and shopping centers had increasingly been converted into warehouse and e-commerce distribution centers. In 2019, according to a study by the global industrial real estate firm CBRE, big-box stores closer to population centers than they are to warehouse districts were the primary candidates for these conversions, and major retailers were choosing to transform underperforming retail properties into e-commerce-driven logistics spaces.
Also, stores like Walmart, Target and Kohl’s had been converting themselves into mini distribution hubs to shorten the last mile to customers, allowing shoppers more options in receiving and returning their items. Brian Cornell, CEO of Target, described the transformation as “placing our stores at the center of a modern network design to deliver an unmatched combination of convenient fulfillment options.”
According to this article in Retail Touchpoints, many retailers are now considering rolling out in-store fulfillment programs, such as ship-from-store and dark stores to serve consumers’ needs safely and conveniently amid the restrictions imposed by COVID-19. According to the piece, dark stores are particularly well-suited to operating under the current conditions as last-mile fulfillment centers, shortening delivery windows. Retailers are also considering opening “mini warehouses” that are a fraction of a typical facility’s size — compact enough to squeeze into tight urban industrial buildings or even to fit in the back of brick-and mortar retail stores. They’re strategically located in major metropolitan areas around the country where demand is high, positioning goods closer to customers to shorten last-mile delivery times.
I have been seeing the term “next normal” recently. As we look ahead as an industry, I think that this is a better description of where we are headed than the “new normal,” although one could even argue that there won’t be much about it that will look or feel “normal” for some time to come. The pandemic has forced the hand of our industry toward innovation, and we are building the foundation for the “next normal” right now. We aren’t there yet, but we will be. The price of entry will be retailers’ and brands’ ability to meet customer expectations, and this requires embracing new technology and smart strategies that enable customer understanding and deliver both safety and convenience.