3 Ways the Pandemic Will Change U.S. Retail Forever
Main Street is struggling in the midst of the pandemic, with many retailers wondering about the long-term impact of coronavirus on the retail and e-commerce industry. Indeed, there are growing signs that the pandemic could impose permanent lasting change on retailers, with the after-effects of the coronavirus changing how consumers shop and likely requiring merchants to innovate to keep pace.
Here are three ways the coronavirus will change American retailing forever.
1. Fewer stores, more E-commerce
A recent study shows that 60% consumers have purchased more goods since the shutdown began and some 39% of respondents also reported that they had been encouraged to purchase products online that they had not considered before, such as pet food, alcohol and shoes.
Online grocery is also now 10% of the total, up from 7% in the space of just a few weeks. Mintel expects the market to grow by a third this year. Experts also expect a chain of business failures among larger retailers, and an escalation in the decline of Main Street after the pandemic.
The changing nature of retail and change in consumer purchasing behavior is leading to many retailers using the Covid-19 crisis as an opportunity to re-evaluate e-commerce operations and pivot quickly to remain competitive, and this will lead to fewer stores and more e-commerce.
2. Rapid Technology Adoption
The crisis is forcing retailers to act much more quickly than they normally would.
As the world moves digital, entering into technology partnerships will become increasingly common. A quick glance at Shopify's recent sales surge shows some merchants are quickly adapting operations to survive the coronavirus. Other retailers are opening up multiple channels online using Amazon Marketplace and eBay.
The shutdown is pushing consumers online and this creates a huge opportunity for smaller players. Experts suggest that in this era of rapid change, agile technology stacks will be vital for merchants to react quickly to the coronavirus challenge.
3. BOPIS Will Accelerate
With more stores and restaurants beginning to reopen and needing social distancing and safety measures in place, expect a major uptick in new zero contact buy-online-pickup-in-store (BOPIS) systems which allows guests to order their item online before collecting it safely from outside or via car delivery.
Retailers exploring the BOPIS model need to ensure they have in place the underlying technologies that enable a smooth transaction. This includes integrating BOPIS early in the checkout cycle as part of the range of buying options as well as the ability to implement accurate/real-time inventory management — it’s vital to have an accurate picture of which stores have what inventory so that shoppers can select the most convenient location and not be disappointed when they arrive at the location to pick up their product.
Even with BOPIS increasing over recent years, the necessity of using it now is likely to cause permanent adoption to spike. According to Target CEO Brian Cornell, when a customer orders online and uses BOPIS, about 90% of the cost goes away. So there are some hefty benefits for stores to keep the adoption of these services high — even when normality returns.
Derek O’Carroll is CEO of Brightpearl, a retail operations platform for retailers and wholesalers with a clear mission to automate the back office so merchants can spend their time and money growing the business.