Canadian Music Trade - August/September 2020 | Page 9

By Bob Phibbs
From The Floor
3 Ways the Coronavirus Pandemic
Will Change Retail Forever
Part 1
Everyone is looking for the
long-term effects of how the
pandemic will change retail
forever – especially in brickand-mortar
stores.
Not that many weeks ago, retailers were
anxious to just0get on0with0opening0their
stores. But now that they are all open, they
know that unlocking the doors was the
easy part. Though many reported success
during the pandemic – notably0hardware
stores,0pet stores,0and bike stores – most
retailers were deemed non-essential and
forced to close for weeks or months.
Here are three retail trends that will
impact retailers as a result of the pandemic
closures, and the news is grim, but come
back for part two for some hope and
optimism.
1.0 Malls Are in Trouble
The glut of money used to open malls at
every offramp was never based on demand
but because of the availability of cheap
Wall Street money. But mall traffic has
been declining for years because fewer
shoppers want to go to a cookie-cutter
mall with the exact same stores that are
now in trouble – jewelry stores like Kay
and Zales, fashion stores like GAP and
Victoria’s Secret, department stores like
Macy’s and JCP, and even restaurants such
as CPK and PF Chang’s.
Rents are bound to fall and the whole
“beige-ing” of the mall has now put them
in jeopardy. The same 3 x 4-ft. window
signs touting the same stale coupons,
the same0friends and family0promotions,
and the same exact colour story as every
other store is also why traffic has fallen.
Many retailers did not pay rent to mall
operators during the past few months and
store closures are looming by the0tens of
thousands. On top of that, shoppers are
carrying every mall on their smartphones
and have the ability to find anything at
most any price point.
2.0 More People Are Working from
Home
Stats around Zoom0show0more than 300
million0daily0meeting participants spent 2
trillion meeting minutes – most of those
from home – and that was just for April
2020. With fewer people driving around,
taking public transportation, and going
to downtown locations, there will be less
activity in many downtowns and on main
streets. With fewer meetings and trips,
demand for apparel will fall but the home
goods market is expected to remain strong.
3.0 Digital Has Its Limits
Bloomberg carried the headline:0“Americans
Return to Car Dealers, Thwarting
Expected Shift Online.”0While initially
online car purchases surged, shoppers are
returning to showrooms as the economy
reopens. The same pattern is unfolding
in food, with Americans going back to
neighborhood grocers and restaurants after
dabbling online.
What to Make of This Coronavirus
Retail0News?
As much as the digital-nativists proclaim online
is a0done deal0and no one will return to
stores, in July alone, many apparel stores also
reported0solid sales performances, including:
• American Eagle Outfitters reported
that sales productivity was at
95% at its reopened stores.
• Burlington Stores reported sales
were0ahead0of last year’s levels at
its reopened stores.
• Even Gap Inc. reported that reopened
stores in North America
generated sales at nearly 70% of
their performance a year ago, on
average across its banners.
So is the worst over? No, the pandemic will
change retail forever.
In part two next issue, however, we’ll
look at three things that have to happen for
retail to regain its strength:
1.0 Keeping associates without skills
needs to end
2.0 Merchant mentality needs to
return
3.0 Digital innovation must be
embraced0
This article was originally published
on retail expert Bob Phibbs’ The Retail
Doctor Blog, which features a host of
free retail-focused and business-building
content. Access the blog along with more
information on The Retail Doctor’s sales
training, consulting, and more at
www.retaildoc.com.
CANADIAN MUSIC TRADE 9