Throughout the pandemic, millions of shoppers – including the older Baby Boomers – discovered the benefits of online shopping. Then, as brick-n-mortar retailers scrambled to survive, the increased availability of delivery, curbside pickup, BOPIS (Buy Online, Pickup In Store) and BORIS (Buy Online, Return In Store) was well received by a broad swath of consumers.
We see that this has brought heightened awareness of two different retail strategies: Convenience Retailing versus Destination Retailing.
And here's the deal: retailers now must choose either one or the other of those two strategies. You cannot have one foot on the dock and one foot in the boat. You DO have to decide!
Why? Because no matter which you choose, it will – and must -– drive many of your other decisions:
What is demanded of Convenience Retailers?
It's more than "location, location, location!" Indeed, given all the work-from-home changes, including disruptions to commuting patterns, there is a considerable shift in what constitutes a "convenient location."
Convenience Retailers have a demanding set of priorities for success, as they are in that lower-margin-higher-volume game.
What is the other choice? To focus on being more of a Destination Retailer.
What is the focus of Destination Retailers?
Discretionary items for those with discretionary income and discretionary time. As such, stores of Destination Retailers tend to feature:
There has been much disruption in retailing in recent years. In many communities – and especially in major cities – the "center of gravity" of shopping districts has shifted to neighborhoods and suburbs.
Plus, the rapid expansion of technology use by retailers has affected the dynamics of the customer relationship, and the customer's perception of "convenience."
So, clarifying and prioritizing how your stores should be perceived is critical. And it has important impacts on all of your business decisions.
As we approach April of 2021, the question for retailers is "Now what?" Having survived 2020, in many cases on guts and guile, we must now focus on how best to survive 2021 and beyond.
As having one foot on the dock and one foot in the boat, the future of retailers in that Red Zone is not a pretty picture.
Granted, there is much talk about the expectation that "convenience" will become a major factor for shoppers going forward. And we don't disagree.
Here's the deal: We see that this has brought heightened awareness of two different retail strategies: Convenience Retailing versus Destination Retailing.
Yes, we know. Owning a retail business these days is one flexibility test after another. And there are no one-size-fits-all solutions.
In the United States, one of the most widespread impacts of the virus is uncertainty. With no end in sight. It is the virus that is in charge. As the president of Alaska Airlines noted, "We don't know what the future looks like."*
But the fact remains, whomever is selling to the ultimate consumer has leverage. Might that be you?
The season of ghosts and goblins and things that go bump in the night is upon us. While Halloween comes and goes, there may be another very unhappy monster haunting retailers this Holiday season. And it is spooky!
What is this monster? It is an unintended consequence of the good faith efforts of many retailers to provide "excellent customer service." Customer expectations have been raised to heights that may not be fulfilled this year. A grim reality is setting in.
We were struck by these comments from folks for whom "back-to-school" is more than a season. Look what a state superintendent of public instruction* had to say about the upcoming school year.
Lots of retailers can identify with those comments, don't you agree?
Or, these observations about the disruptions and uncertainties of the pandemic:
As we reflect on this year and the multiple and still-ongoing effects of the pandemic, we are inspired once again by the resilience and perseverance of independent retailers.
Then we saw a comment about dealing with adversity that seems particularly relevant to retailers.
Remember Cher, the entertainer? (And conservationist and philanthropist.) She was asked by Christine Amanpour about how she dealt with adversity and setbacks (like bankruptcy) throughout her career.
About a year ago, as the pandemics were beginning to hit their stride, we introduced a framework for retailers to "rethink your merchandise mix."
As depicted in the chart above, we cautioned that once the lockdown was over, as customers resumed shopping, retailers should be prepared for (1) reduced sales totals overall; (2) significantly re-balanced merchandise mixes, initially dominated by "basics/never-outs."
Further, we anticipated that the merchandise mix would continue to change as we re-emerge from the effects of the pandemics. And we urged retailers to take this overall construct and adapt it to their own situation; to develop their own customized strategic response.*
Now, one year later, here's how this can become "news you can use" to quickly produce your Big Picture buying plan. Especially in the spring of 2021, some practical answers to "What to buy?" , "How much?" and "When?" are likely to be very welcome.
Still less than $1 a day! 👀