How the Pandemic Has Reshaped Retail: A Conversation with Bloomberg, CNBC, CNN and Retail Dive
Retail sales are down more than 20% from January, more than 41 million Americans have been furloughed or laid off — many in the retail space — and some predict up to 25,000 retail closures this year. The pandemic has led to a surge in e-commerce, delivery and curbside pickups, forcing many brands to redesign their customer experience and operations. Meanwhile, Amazon and Walmart have only become stronger.
We recently sat down (virtually) with four reporters who follow this space closely to hear their takes on how the industry has responded to these changes. Jordyn Holman of Bloomberg, CNBC’s Lauren Thomas, Chauncey Alcorn of CNN and Retail Dive’s Daphne Howland talked about their own buying habits during the pandemic, challenges the industry is grappling with and where they see it headed next. Here are a few highlights from our conversation, edited for length and clarity.
Pre-COVID industry trends are accelerating at lightning speed
Changes that were already happening in the industry — consolidation of smaller brands, heavier reliance on e-commerce, growing attention toward supply chain practices and workers’ rights — have shifted into overdrive during the pandemic. It’s still unclear, though, what consumer behaviors will stick around for the long haul. Amazon had its biggest sales quarter ever, but whether customers will keep ordering online when the option to buy in-person comes back remains to be seen.
If they do, Lauren said, “that could be powerful for Amazon,” but quipped, “we won’t have as much to cover as retail reporters.”
It’s time to ask which jobs are really essential, and why
Our conversation focused heavily on the designation of many retail workers as “essential,” even as small businesses closed and many stores that remained open were in a stronger position going into the pandemic. Jordyn noted that many small business owners wondered why they couldn’t sell t-shirts, for example, while consumers could still buy them at Walmart. Daphne highlighted the trend of small stores adding “essential” goods to their shelves so they could stay open, which in some cases added more confusion to what we think of as essential and why.
“It’s like an asteroid hitting the earth and killing the dinosaurs,” said Chauncey. “Some evolved, and those that weren’t equipped died out.”
“It’s like an asteroid hitting the earth and killing the dinosaurs. Some evolved, and those that weren’t equipped died out.”
The pandemic doesn’t spell the end for brick and mortar
For years, Jordyn pointed out, the retail industry has been on a mission to close down stores that weren’t up to snuff: “Everyone’s slimming down.” The pandemic is an opportunity for leaders to take a step back and determine which stores it really needs. There’s also a new strategy emerging: open a few flagship stores plus a handful of smaller ones targeted to specific communities. Nike plans to open hundreds of smaller stores around the country even as it manages declining sales. The benefit of that approach, Jordyn says, is “much less inventory that’s catered to that community.”
Retail companies have a potential PR problem on the horizon
As they navigate the next phase of the pandemic, big businesses have a lot to consider around how much they are paying employees, what to do when someone gets sick – and how to convey that information to consumers. E-commerce supply chains, Daphne noted, present unique challenges for companies because workers are hidden from consumer view. “I think it’s a real problem for e-commerce generally,” she said. “That could affect how people view buying through that channel.” Anecdotal data from our event attendees backs that perception: 42% said they view Amazon more negatively now than they did at the beginning of the pandemic, though 35% say they’re shopping there more now than they did a few months ago.
Data can help tell a strong retail story
Our panelists highlighted their interest in data on foot traffic in stores to help illustrate where the industry is headed. As case loads rise and fall in different parts of the country, they’re interested in foot traffic differences and whether store closures are happening more in one area than another.
Many thanks to Jordyn, Lauren, Chauncey and Daphne for the engaging conversation. Happy shopping!