- Retailers across the US have come under intense pressure during the coronavirus pandemic.
- While some stores have stayed open and adjusted their shopping environments to be safer for consumers and workers, others have closed.
- Experts are now looking at how stores might change after we emerge from lockdown and what the shopping experience could look like in the future.
- Visit Business Insider’s homepage for more stories.
Retailers across the US are feeling the strain of the coronavirus pandemic, which is creating a surge in demand at some stores that remain open but has wholly dried up business for those that haven’t.
Experts, landlords, and retailers are now turning their thoughts to life after lockdown and how different the retail landscape could look in the future.
“We are working on how we come out of this, what are we going to look like, and how are we going to make it so our customers feel comfortable coming to our properties. That’s what our main concerns are right now,” Greg Maloney, who heads commercial real estate services company JLL Retail in the US, said in a recent conversation with Business Insider. JLL Retail offers property management and leasing services to landlords.
“9/11 changed our way of doing things…and I think this is going to change our way of doing things in a lot of ways,” he said.
Here’s how our shopping experience could change, according to retail experts:
SEE ALSO: ‘The big will get bigger’: UBS expects 100,000 stores to close across the US in the next 5 years — and Walmart, Costco, and Target could be among the last left standing
Permanent social distancing measures
Stores that are deemed essential and can stay open during the lockdown have already enforced new measures to make shoppers and employees feel safer. These include anything from social distancing markers and limits on the number of customers in-store at any one time to sneeze guards at the cash registers. And experts say that some of these measures will become a permanent fixture.
Greg Maloney of JLL Retail said he is already working with clients who have busy stores – such as Apple – to see how they can prepare for the future. It includes changing the store layout and limiting the number of customers.
Movie theaters are doing the same, he said, by looking at how they can space out seats or leave some empty to limit the number of people.
Hand sanitizing stations and free masks
While some retailers have started to supply workers with masks, Maloney said JLL is looking at how to take this a step further. It is considering whether malls and stores might also begin to provide free masks for customers and install hand sanitizing stations in public areas to prevent the spread of infection.
More communication about cleaning
Sanitation is a top priority for shoppers at the moment. Experts say that retailers will likely have to be more transparent about their cleaning practices and how their ventilation systems are arranged to show whether they are circulating the same air around the store.
Stores move to an appointment-only model
Appointment-only shopping services typify expensive boutiques or wedding dress stores but Kelly Stickel – founder and CEO of consultancy firm Remodista – said in the future we could see more stores adopting this model to limit the number of people in a store.
A less drastic measure would be to open the store every other day to make time for a deep clean, she said.
More contactless payments
Retailers are already advising customers to avoid germ-ridden cash and pay by card. Neil Saunders, managing director of GlobalData Retail, thinks we are only going to see more contactless payment options in stores along with “scan and shop” services to help customers avoid the registers altogether, he said.
Pick-up becomes the norm
Before the pandemic, some of the country’s biggest retailers were building out their buy online pick-up in-store services to make shopping more convenient. But in the past few weeks, grocery and big-box chains have been ramping up these services as customers avoid shopping in-store.
Saunders is expecting more stores to jump on the bandwagon and for collection points in-store to be given more prominence and space, he said.
Chengyi Lin, an affiliate professor of strategy at INSEAD business school, said we would see the same process applied to restaurants as well. Ordering online and dining in the restaurant could decrease the wait times outside and inside restaurants and provide a “smoother and safer dining experience for patrons,” he said. And ordering online and picking up at the restaurant or store could save time and reduce human interaction.
These services could also play an important role in contact tracing.
“Back-tracking digital transactions could help identify potential contacts should an individual be diagnosed positive,’ he said.
Leaning more on ecommerce
Social distancing is already encouraging consumers to shop online more, and experts say this will only continue.
Lin used China as an example of this.
“After China comes out of national confinement, many brick-and-mortar supermarkets continue to lose foot traffic, while their online channels continue to thrive.
“In the US, we may see a similar recovery pattern. We could expect to see a continued increase of ecommerce penetration for retailers. This increase could benefit both pure ecommerce players such as Amazon and traditional retailers who manage omnichannels. In-store foot traffic may have a slow recovery,” he said.
It hasn’t applied to all businesses, however. According to Lin, restaurants in China have seen a faster rebound.
“With continued physical distancing rules, such as one table one person, diners come back to enjoy the flavors they’ve missed,” he said. Still, he’s expecting takeout and food delivery demand to continue to rise.
More stores will close
As more consumers switch to ecommerce shopping, we are likely to see a contraction in the number of stores in the US.
This trend was already well underway before the pandemic started but is likely to accelerate over the next few years, experts say.
“I think some retailers will also use the crisis as an opportunity to assess what they want from their store portfolio and I expect some to shrink because demand has dropped off,” Saunders said.
In a recent UBS report, a group of analysts estimated that as many as 100,000 stores could close in the US in the next five years. In the report, UBS cited the immediate impact of the pandemic and the subsequent changing shopping habits it is likely to cause as crucial reasons for this.
Robots replace humans in stores
COVID-19 has become a testing ground for several new technologies such as delivery robots and drones in China, Lin said.
“In the case of prolonged confinement, or the “long-tail” scenario, these technologies could become very helpful,” he added, highlighting that drones could deliver medicines in cities and remote areas.
Robots could also become more critical in stores and used for tasks such as cleaning and stock checking. The benefits of this are twofold, Saunders said: It “both minimizes staff exposure and also helps reduce costs – which retailers will be desperate to do after this crisis.”
Virtual reality brings the store to our home
If store visits do drop, longterm retailers are going to have to come up with more creative ways to recreate the experience of shopping in-store online.
Artificial intelligence (AI) and virtual reality (VR) could play an important role here by offering services such as personalized recommendation, image-based search, and virtual personal stylists, Lin said.