Renewing Focus on Long-Term Planning
By Miller Zell
- Renewing Focus on Long-Term Planning
The COVID-19 pandemic forced many retailers to accelerate the adoption of their future plans, particularly digital innovations that reduced person-to-person contact. Kicking the can down the road was no longer an option during an international crisis.
Yet long-term plans transforming into immediate needs left behind a void in the playbook. What replaces those once-future plans? How do retailers, banks, QSRs and other purveyors of public spaces strategize for the coming months and years when what previously seemed a future or gradual implementation became the present reality?
In other words, how do retailers now plan for that faithful day when the masks come off and the crowds (maybe?) return?
That parenthetical “maybe” is a critical variable. While long-term planning in retail has always been an inexact science, uncertainty now owns a primary position in the equation like never before.
Circumstances have drastically changed, and it won’t be 2019 again even when the fear of COVID-19 substantially recedes. Consumers are different and businesses will need to respond.
According to McKinsey, more than 75 percent of consumers have experimented with a different shopping behavior during the crisis, including trying new brands and places to shop. In a survey of global consumers, EY found that while 40 percent of people are eager to get back to normal, 50 percent of consumers still expect their lives to change significantly in the long term.
Meanwhile, Cambridge Retail Advisors’ survey of U.S. retail and restaurant executives found that 83 percent believed “retail and dining will be changed forever.”
As reported in the Wall Street Journal, “Weekly [retail] foot traffic from July until the second week of September is down by an average of 14% compared with the same period a year ago, according to mobile-device location data from foot-traffic analytics firm Placer.ai.”
It’s fair to assume that foot traffic will increase when people become more confident about their health and safety, though how quickly and to what degree is the multi-billion dollar question. According to IAB analysis, “25 percent to 33 percent of all consumers intend to reduce major out-of-home activities when the coronavirus crisis ends.”
Yet sentiments can evolve quickly and substantially.
This means the primary focus, in the end, remains what it’s always been — the customer. Only that customer now will be different than expected and businesses must reset their long-term plans and expectations accordingly.
The first step should be obvious at this point: health and hygiene. Customers and associates must feel your space is going above and beyond to maintain a safe environment. Every future initiative, from wayfaring to checkout to app development, should touch this base when under review.
Once people feel safe again, they will go out. But who are they now? How have they evolved? How might their experiencing of your brand and your stores be different than it was before? How can you design spaces to meet their new wants and needs?
Before the pandemic, savvy retailers were eager to create engaging, even customized shopper experiences because they needed to provide reasons for customers to visit stores instead of buying online. The pandemic, however, emphasized the need for widespread adoption of convenience-first shopping initiatives, whether that’s ordering/delivery via apps or BOPIS or contactless checkout. Even when shoppers went to stores, trip missions had changed and they wanted a seamless in-store experience.
While it’s unlikely that there will be a massive retreat from newly adopted e-commerce use, it’s also likely that many people will want to venture forth and again experience shopping in stores. There could be a new appreciation for it that retailers will want to tap into — a “welcome back” vibe that if correctly played to could build brand loyalty.
Which is why the cornerstone of future plans should be research, data collection and strategic thinking about who the customers of 2021 and beyond will be.
For example, Generation Z is entering adulthood and it will be the best educated and most diverse generation yet. It’s 86 million strong, overtaking Millennials as the largest generation in the U.S. In 2018, it influenced $600 billion of family spending, according to USA Today and Engagement Labs. It also is the first generation to grow up in an entirely digital era, not to mention that many of its members are entering the workforce in a time of dramatic uncertainty.
What we do know about Generation Z is that it cares about sustainability and business ethics and, before the pandemic, it liked to shop in stores, despite its digital upbringing. Understanding this generation’s post-pandemic evolution will be critical for future plans.
Of course, a lot of future plans hinge on how the economy reacts, post-pandemic.
While there’s been a lot of worrisome news, there also are spots of good news. Yes, a lot of retailers and restaurants closed locations, but according to analysis by Coresight Research, 3,344 new store openings have been announced so far this year. Expectations for holiday spending are pretty solid.
Retailers and other purveyors of public spaces need to plan for multiple possible future scenarios, incorporating lessons learned during the pandemic — supply chain anyone? — and projecting forward to a new normal that eventually will come.
While unprecedented times create uncertainty and justifiable anxiety, the foundational demand for retailers, banks and QSRs remains the same as always. Buttressed by strategic thinking and precise, efficient in-store execution, they must meet customers where they are with the best possible experience in order to outperform their competition and built brand loyalty.
End-to-end branded environment services under one roof to craft the optimal customer experience wherever people gather, shop or learn.