THE FUTURE OF RETAIL | Corona
The following is a brief recap of a panel on the Future of Supermarkets on a post-COVID world and How to face the new challenges in retail. The panel was organized by Instaleap with the comments of Ex-Chairman of Walmart, Eduardo Castro-Wright; VP of Sales LATAM for P&G, Alberto Moriana; and CEO of Tottus, Johann Ramberg.
People behaved in the same way throughout the world responding to government declarations. Sales of first necessity products peaked right after 3 main moments.
Declaration of a national Emergency state
Declaration of Lockdown or Stay-At-Home orders
Extension of Lockdown or Stay-At-Home orders
Trends as people get used to a confined society:
One-Stop-Shop: reducing the exposure to the virus. Product availability becomes a big driver in the decision-making matrix. This could lead to an online inventory of available stock
Click+Collect: (Curbside Pick Up)People are looking for this method of Online Buying and Pick up to reduce contamination. Delivery and Pick Up methods are also growing and there will be a priority in the usable sq footage for these areas. Vending machines will also be implemented.
Visual Communication is key: cleaning protocols are being implemented everywhere but making sure they are visible and perceptible will gain the trust of consumers in the store. This means cleaning during open hours so customers see that the store is being cleaned. Having a clean smell will target the subconscious of customers making them feel comfortable.
Layout and Customer Flow: It’s about a balance of making customers feel secure and comfortable. Disrupting the store’s layout will make people feel uncomfortable. Layout design will move towards wider hallways and circulation, one-way aisles, clearer colors/communication, less assortment offer, and product quantity on the shelves.
Decision-Making Matrix: The decision-making matrix that used to happen on-site will start way before the customer gets to the store. Customers will decide what they want/need with an online menu/portfolio of products. It will become less experiential (walking around) and more transactional, people want to spend less time on the stores. Stores will move towards becoming distribution centers, meaning emotional connections with experiences will be transferred into different touchpoints.
Fear management will be crucial to make people feel safe. Customers will make decisions on which store to visit depending on the perception of security and cleanliness. This will be a priority and take over importance on discounts and quality of products.
Robotics and automatization of both BOH and front-facing areas will develop further. The less human contact is expected, customers will feel safer to go to the store.
Measures that are staying after the coronavirus break bituation:
Online shopping and E-commerce will continue to grow. Will not replace IRL shopping (yet) but it will remain. A category like DPH [Drugstore/Perfumes/Hygiene] used to be 30% online in China before the pandemic, grew to 50% online during the lockdown and is coming back to ~40% after lockdown. Meaning some customers will continue to buy online but doesn’t mean ALL of them are.
Communication matters: brands need to re-focus their communication strategies to be empathic and develop jointly with situations.
A contactless check out is imperative. Physical (not visual) barriers in the POS is also crucial to make both customers and staff feel safe. Developments in this part of the service most likely will not scale back. This will reduce the amount of checkout staff, thus reducing jobs in this area.
Local purchases will replace large market areas (hypermarkets & huge malls) The displacement purchase will lose against the local purchase. These big shopping centers will be dismembered in smaller elements relying on existing infrastructure to create a “smaller one-stop-shop” while covering a wider area of influence making each shopping trip shorter and safer. (This might mean trucks and mobile experiences might be the safest way to go for retail. Outdoor experiences will also be better handled by the public. NYC is closing streets for its residents to walk freely. Lituania is closing streets for restaurants to serve outdoors instead of in confined areas.)
Health-Related Services. Retail might encounter a common ground with medical services by providing health-related
Takeaways from retail comeback after Lockdown measures get lifted:
China opened its territories (Except for one province) in March. By May, retail has recovered almost fully and it is previewed to be the same as before by June.
Juliana Marroquin [May 8, 2020]
