Reinventing Retail Will Mean Embracing New Formats

social distancing

Reinventing retail in the wake of COVID-19 may mean reinventing retail formats. As the discussion turns to reopening, non-essential locations — malls included — will need to consider old issues like total footprint and new ones like shopper distancing.

“As retailers and brands grapple with big questions related to reopening stores, it’s clear from our findings that consumers have varying degrees of comfort within different store environments and formats,” said Greg Petro, CEO of retail testing company First Insight. “As retail visits expand past essential retail like grocery and drug stores, other retailers, and malls in particular, need to be thinking of ways to inspire a sense of safety for consumers, and it will need to go beyond offering gloves and masks at the door. It’s also likely that retailers will see more men in-store than women, and they should consider adjusting inventory to target these shoppers.”

Inventory adjustments will only be part of the post-COVID retail order. Just this week Walmart made several moves to address this by altering store hours, beginning temperature checks for employees, limiting the number of people inside stores and encouraging all customers to wear face masks. It also introduced one-way aisle traffic to help enforce social distancing regulations.

“We’ll continue to put signage inside our stores to remind customers of the need to maintain social distancing — especially in lines,” the retailer said in a press release. “And once customers check out, they will be directed to exit through a different door than they entered, which should help lessen the instances of people closely passing each other.”

Some retail experts have suggested that these social distancing moves will lead to new formatting and embracing some concepts that were considered experimental before the coronavirus crisis, such as pop-up stores. Any adjustment that will reduce customer interaction and promote safe distancing should be considered to accommodate what will certainly be a skittish population. The exclusive PYMNTS COVID-19 tracker project shows that most consumers will consider the crisis to be an issue through the summer and fall, and most say a vaccine is the main factor that will encourage them to return to their previous shopping habits.

CIO magazine is even recommending that retailers reconsider the Amazon model of cashierless stores or a “just walk out” payment model.

“The COVID-19 pandemic has drastically shortened the timeframe for retailers to confront their ongoing challenges and the uncertainties of future threats,” it says. “Retailers should explore the back-end systems and integration frameworks needed as well as the execution-ready solutions available to build the foundations for a “cashier-less” or “friction-less” experience. The sooner they adopt alternative shopping options such as JWO (just walk out), the better prepared they’ll be to meet consumer expectations of this new era.”

McKinsey’s most recent survey of retail executives shows that more than half of the respondents expect to reopen with reduced hours and fewer employees.

“Looking at the long-term changes retailers expect to make, many executives say they are reevaluating their footprints,” it said. “Approximately one-third of respondents report that they are considering not reopening underperforming stores, and a similar share say that they might pause plans to open new stores. While the surveyed retail executives in most segments do not foresee long-term changes to store formats, about three-quarters of apparel executives say they plan to improve online integration at their stores.”