March 25, 2021

4.5 min read

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With vaccines now being rolled out, retailers are anticipating the return to full in-store capacity. But not all consumers will be comfortable jumping back into a pre-pandemic retail environment—and online shopping is not enough to bridge the revenue gap. Retailers need to take the shopping experience to consumers, rather than wait for consumers to come to them.

The past year has seen the entire retail industry pivot to a largely digital model, with consumers en masse shifting to online shopping, home delivery, or curbside pickup. It’s not surprising that in-store sales dropped 14 percent in 2020, and analysts estimate it may be another five years before the numbers return to pre-pandemic levels (eMarketer).

E-commerce has mitigated the impact of that drop. But it can’t replace the revenue-generating potential of in-person shopping. At the same time, for all the enthusiasts who can’t wait to get back into stores, a January 2021 study from First Insight shows that, even after vaccinations, there are many cautious consumers who are reluctant to return to physical retail spaces.

Retailers need to be ready for this reality. They need to explore new engagement options. If they remain status quo and continue to operate business-as-usual, they’ll be leaving money on the table.That means they need to think beyond their store walls—and beyond their websites—to build a retail network that accommodates the comfort levels of all consumers. A network that reaches out to them instead of waiting for them to reappear in stores.

Consider the fashion industry as an example.

Hub, spoke, set: encouraging customers back into the fold

Fashion is among the industries hardest hit by the pandemic, as borne out by the long list of fashion brands that have filed for bankruptcy in the past year. For brands in this vertical, thinking about new approaches to retail has never been more important.

With fashion in mind, imagine a three-layered system—hub, spoke, and set—that enables retailers to meet their customers half-way. 

At the centre of the model is the hub: the full in-store offering—retail as we know it, albeit with temporary safety protocols such as lower customer capacities. Customers can browse, consult with sales staff, and try on clothes, just as they used to.

Extending out from the hub are spokes—various satellite events hosted at community centres, hotel venues, or via mobile formats. Here, consumers can wade into the shopping experience a little more gradually, leveraging large or outdoor spaces.

And rounding out the network is the set: a more intimate environment for focused activations or extended marketing events. Here, consumers can immerse themselves, but in a way that’s more tailored and limits participation to small, familiar groups.

Spoke: taking it into the community

Consider a series of seasonal fashion shows—one-day or weekend events in city parks or mall parking lots—with themes like Mother’s Day, Father’s Day, the weekend away, or back to work. Attendees, all safely distanced, watch comfortably as they peruse featured items on either a printed program or an online catalogue via the retailer’s app. With a quick tap, or by scanning a QR code, any item can be purchased and delivered—an ideal fusion of online and in-person shopping, and a great option for gifting. 

In a similar vein, imagine a day away at a downtown hotel: High-value customers have been invited to an exclusive wellness event sponsored by leading beauty brands. Guests take part in virtual makeup demonstrations, following along at their own stations as an esthetician provides instruction. And with the event streamed through Facebook or Instagram live, there’s also the option to tune in remotely, enabling everyone to take part, regardless of their crowd-comfort levels.

At the end of the event, participants, online and in person, can purchase kits containing all the makeup products used in the demonstration.

Sets: innovative and intimate ways to use newly available space

Picture an extensive storefront window where retailers like Hudson’s Bay Company have collaborated with brands to take in-store shopping outside. Every product displays a QR code, so that without ever having to step inside, shoppers can browse, purchase, and have it delivered wherever they like. It’s curbside pickup turned curbside shopping. No longer do windows just inspire; they now directly drive transactions.

At the same time, shoppers can also venture inside. Imagine a forced-flow “night out” celebration, where a staged journey offers curated outfits, then matching accessories, followed by a virtual makeup demo—all completed by a one-on-one meeting with the designer. The following week it’s a different designer, new activation. One multi-purpose space, with controlled crowds, and a choreographed experience—and the ability to change out the theme while limiting the required investment. 

Leveraging loyalty: using data to target the investment

Customer data can help retailers identify the markets where this level of investment offers the highest potential returns. With a clear understanding of the neighbourhoods with the greatest number of high-value customers, retailers can send them exclusive invitations to local events. Alternatively, the retailer can gamify the experience, encouraging participants to vote for where they want the next activation to appear. A little competition between neighbourhoods or regions could increase engagement, provide deeper customer insights, and serve as an acquisition strategy. Ultimately it ensures the investment is driven by consumer interest, so that a short-term lease generates a worthwhile return.

The opportunities are out there. But retailers must embrace the fact that new consumer needs and expectations call for a new approach to engaging them. This is a chance for these brands to strengthen their business model through greater flexibility and resilience.