10 June 2020

Waterstones is planning to ask customers who've handled books to put them on trolleys for removal and isolation. Clothing stores expect to keep changing rooms closed to minimise contact with garments. As our economy attempts to renew itself in the wake of COVID-19, the retail sector faces particular challenges.
Rethinking retail - woman shopping wearing a mask

Our colleague Kirsten Cowan, an expert in consumer attitudes and how brands are perceived, explains that building a deeper relationship with customers will be key to survival.

The British Retail Consortium has estimated that non-food retailers have lost £1.8 billion in sales during lockdown. The trade body says that many of its members still face a fight for survival as restrictions ease. The sector was already struggling with the shift to online purchases, a trend that has accelerated.

There have also been reports from other countries that when shops reopen customer numbers are well below normal but each shopper spends more, so while there are challenges for retail there are also opportunities.

A key question being asked is if COVID-19 sounds the death knell for physical retail. I don't think it does. Consumers have an inherent need to touch and evaluate objects before making a purchase. While online retail could find ways to address these needs through technical innovation, the simple truth is that consumers like the experience of shopping; they look forward to buying makeup and clothing, for example.

While retailers are starting to alter their layouts and physical space to enable social distancing, shopping, for many, will always be therapeutic and a source of social interaction.

So besides physical layout, what should retailers do to bring back customers they've lost during lockdown? Consumers who have the financial means will do what they can to support the retail chains they feel connected to, from buying online to connecting with these brands on social media.

Integrating your online shop, your social media channels, and building a community through these channels can result in a high level of engagement.

For some consumers, the fact they cannot shop as 'normal' opens up opportunities for delivering to them, even running errands if they are local, to help build a relationship. Businesses will need to more tightly align the channels they use. What we call an 'omni-channel environment' is going to matter hugely because customers are not just local; they are global. Integrating your online shop, your social media channels, and building a community through these channels can result in a high level of engagement with customers that excites them. Retailers should recognise the opportunity that this could bring, expanding beyond virtual tastings to cooking demos, styling how-to videos, DIY projects, and more. I fully expect the next five years will see a much more connected and innovative retail environment.

One lockdown legacy already appears to be that we have become used to deliveries. But it's not all plain sailing. Take Amazon, for example. If this global phenomenon isn't careful, consumers will regard it as a business to transact with rather than a friend. Consumers are not motivated by variety alone. Amazon does offer convenience but this can be easily emulated by others. For instance, Marks & Spencer now offers items sold in store through Deliveroo. What we will see emerge from this pandemic is retailers who will innovate to develop new channels, and provide more variety and assortment to address consumer needs. The retailers that do this the most authentically and responsibly will have the strongest competitive advantage because they develop real connections with consumers.

The final thought I'd pose is around the kind of consumerism that we will see in the months and years ahead. There's a huge opportunity for innovative, small businesses to thrive. On social medial we see strong support for buying local even after lockdown fully ends, and of course we don't really know when that will be, so support for buying local could become embedded.

It's a long road ahead for retailers and challenging to predict. As consumers, what we can do is support our innovative local businesses to ensure that retailers are more sustainable in the long run.

Kirsten Cowan

Kirsten Cowan is Lecturer in Marketing at the University of Edinburgh Business School

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