Remote work is the new normal. But some say employees will eventually head back to the office. Or is it all about hybrid work, as associates prefer to work a few days at home and a few days at the office?
Those trying to understand “the future of work” and what it means for retail surely are frustrated by the mixed messages circulating at present.
The good news? Don’t fret the headlines.
What retailers do know:
- Remote and hybrid work schedules changed shopping patterns and preferences during and after the pandemic, and that means shopping going forward won’t duplicate pre-pandemic patterns and preferences.
- BOPIS, drive-through, app use and delivery grew during the pandemic and are still options many shoppers prefer.
- Customer wants and needs are constantly evolving, often before any headlines or surveys define that evolution.
So how should retailers react to the mixed messages from customers, surveys and headlines?
Office work patterns are widely variable
While pinning down recent trends as a “done deal” and strategizing accordingly isn’t wise, particularly when there are significant differences based on geography and demographics, it is fair to say that fewer workers will be doing the 9 to 5 shift, Monday through Friday, in the office going forward.
One survey noted that “a staggering 98% of workers expressed the desire to work remotely, at least part of the time,” so some sort of hybrid arrangement is favored by, at the very least, a significant majority of workers who have options.
But viewing this as a general trend to lead your strategic store planning is a mistake. It can inform your thinking as one of a variety of variables, but the real “new normal” is maintaining agile thinking about what your customers want right now based on store-level data and then following their ongoing evolution.
Big picture localization & personalization
An urban store inside a big city has always been different from one in the exurbs in terms of demographics, foot traffic patterns and product preferences. But there are new variables now that include post-pandemic preference shifts.
The challenge for national retailers is analyzing new data on a granular, store-by-store level. What percentage of your customers appear to be operating on a new schedule, one not organized by a 9 to 5 rhythm? What are their shopping patterns and what are they buying? And not buying? And how does that vary store to store?
There will be regional and demographic patterns, but they likely will be nuanced. Suburbs outside of San Francisco, New York City, Seattle and Houston won’t match Atlanta, Phoenix and Las Vegas. Remote and hybrid workers will be spending less near office-dense neighborhoods, but the workers returning to the office also will be different than in 2019.
For example, might former remote workers returning to the office choose delivery or BOPIS even when they are at work? A sandwich delivered to the desk at work is not much different than one at home, and picking up groceries curbside can happen on the way from a work office or home office.
Demand is changing, so meet it
Many workers returning to the office will take advantage of a new flexibility that breaks with the transit schedules of the 9 to 5 shift. They may go to the office for 10 a.m. and 3 p.m. meetings with clients but also opt to work from a nearby coffee shop for a long lunch and some extra caffeine. They might arrive late and stay late. Or arrive early and return home after lunch.
Meanwhile, hybrid and remote work means more shopping close to home, but flexible schedules also mean daytime errand runs will often not occur with consistent schedules. A worker who finishes a major project at 11 a.m. may decide to browse at a new shopping development in her neighborhood before opting for a casual lunch followed by a grocery run or maybe a workout and then return home to tie up loose ends at work and reply to emails before ordering dinner.
Targeted promotions also will be effective, from “Welcome back!” offers to office workers to “Supporting your hybrid workers” including a variety of retailers, from clothes to (home) office supplies to quick-and-easy meals. This is a great opportunity for multi-brand collaborations and outreach to office real estate managers.
Shoppers and their trip missions will be more diverse throughout the day. Meeting their needs with products, staffing, enhanced omnichannel experiences and quick checkout will be different than four years ago.
Shopping centers evolve, improve customer experience
Retailers who are investing in upgraded suburban and urban mixed-use developments and smaller footprints are creating intrigued and often delighted customers.
- Rents are lower
- Physical stores bolster last-mile logistics for e-commerce
- New store openings are outpacing store closings
- 85% of 2023 openings favor open-air formats
Further, innovative retailers can use stores to develop new revenue streams, such as retail media networks (RMNs), which target consumers closer to the point of purchase, at whatever day and time they shop. McKinsey & Company recently reported that “73 percent of advertisers anticipate spending more on RMNs in the next 12 months, with RMNs capturing an estimated 10 to 15 percent of total media spend.”
Of course, these RMNs serve brands inside stores as they connect with customers who are different than they were in 2019. Understanding these changes is about not just collecting data but also strategically interpreting it and configuring the branded environment to optimize all customer touchpoints.
“The future of work” is a continual evolution that can take turns based on a wide variety of factors, both predictable and unpredictable, economic and social. And “the future of retail” is the same, intertwined with a complexity of variables but ultimately seeking innovative solutions that serve customers where they are now.