As the global efforts to "flatten the curve" of the coronavirus pandemic continue, there is another curve that is being flattened. That would be the seasonality of retail sales. And this may prove to be what really defines the New Normal for retailers. The customary peaks of retail spending have been flattened.
Meanwhile, on a daily level, few people are on the same schedules and routines as before the pandemics arrived. This has contributed to the sense of unease, of uncertainty, the "Every day is a Wednesday" feeling. What has this meant for retailers? As year-end approaches, what had been a sprint to the finish has become more of a marathon. And in this marathon, in 2020, many participants are walking rather than running.
Yes, this New Normal will be defined by a new pace, a new sense of timing, new routines, new Retail Rhythms. The whole notion of what constitutes "retail time" and retail seasons has changed. We don't know yet what it will all mean. But we do know there is no going back to how things used to be, no turning back of the clock. Emerging from 2020 into these new Retail Rhythms will be exceedingly challenging for retailers. But as always, the greatest asset available is "lead time." That's why we're calling your attention to it now. Amidst this flattening of seasons, how will you define your new Retail Rhythms?
A few years ago we were on a PBS news show about retailing's ups and downs. Several months later, one of us ran into a teacher of one of our kids. That person excitedly mentioned having seen us on TV, saying "I didn't know you knew so much about retailing." (Yep, known just as someone's parent, right?) But then this very well-educated person said the key thing: "I never knew there was so much to be known about retailing!" Well, that incident happened a few years ago when retailing was perhaps more understandable, even more predictable. Alas, those days are history! Today, nothing in retailing is quite as understandable or as predictable as before. Or as manageable!
So, say you have re-opened your stores. Then what? Did the customers come back? Or, were many of those who did show up just there to say "Hello!" And "We missed you!", but not to buy? Sigh. We are not surprised. And here's why.
What's the #1 thing that the retail industry needs now more than anything else? More towns. That's right, more towns and villages. Look, towns tend to be more residential, even slower and more relaxed.
Even the word conjures up warmth.
And towns, and the people who love towns, are a mecca for the vibrancy of retailing. Think about it: the retail industry needs more towns!
And it's already trending in that direction. Macys, Whole Foods, Nordstrom Rack, and Walmart have announced rolling out small formats, seeking locations closer to residential areas. They recognize that's where their customers are and will prefer to be.
Conversely, there are way too many cities.
Many Americans who can afford to save money – thanks to reduced spending on eating out, vacations, and consumer goods – are playing it safe and hoarding their cash, according to recent research by Gallup/Franklin Templeton.* And those who currently are saving at least a little money largely plan to keep saving rather than spending in the near term.
For retailers, the uncertainties caused by the impacts of the Covid-19 pandemic are unrelenting.
So, what should we do with this additional "found time," waiting for the customers? That's a question we CAN answer!
As you are sorting out how best to reopen, we encourage you to be bold about embracing technology. Not just a POS system upgrade with better e-commerce capability. There's much more that warrants your attention.
There's a whole alphabet of resources out there, already being embraced by many: ML (machine learning); AI (artificial intelligence); AR (augmented reality), QR (Quick Response matrix barcodes). All enabling chatbots, robots, digital displays and much else to become "smarter" and more applicable.
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