Brick and mortar retail always feels like it’s going away, but never actually does. You can blame the many ways the market changes for that feeling; tech, policy, regulation, and fastest of all, shifting customer expectations. People are always on the move, looking for the next big thing. Trying to keep pace can be dizzying.
And you can forget the retail apocalypse, Covid was the closest thing we’ve seen to the real deal, right behind global warming. But here’s the weird part: you would think that prospects for physical stores look bleaker than usual post-lockdown, right?
Nope. Oddly enough, the virus seems to have had the opposite effect on surviving brands. Physical stores are rebounding strong – incredibly strong.
Some brands chose 2020 to build out entirely new stores. At first glance, a poor choice. But the reality is, foot traffic has returned almost to pre-covid levels. That influx back to stores has spurred companies to follow the trend, resulting in “the most robust leasing activity in the past five years” according to Craig Robins, founder and developer of Miami’s Design District.
What about essential services that never closed, like groceries? Most grabbed serious profits, per Brookings’ Nov. 2020 report. The top grocery retailers, including Kroger, Walmart, Whole Foods, and Costco, all posted profit increases in the billions during the pandemic. And in the ironic twist of perhaps the decade, Amazon has announced that they have new footprints for 30,000 sq. ft. department stores in the works.
Brick-and-mortar retail can rest a little easier…but not for long
Despite their newfound signs of life, B&M stores still face a challenging future. They must always be improving their customer experiences, while rethinking how they can stay relevant and profitable in an Amazon-dominated era – all while handling the concerns of the pandemic. Challenges never seem to go out of stock.
But with or without challenges, people aren’t ready to ditch physical retail for several reasons:
- Anxiety, Burnout & Depression: Given recent events, it’s unsurprising that most people seem to be suffering various combinations and severities of a vicious mental health trifecta; anxiety, burnout, and depression. Customers and companies alike are anxious to get back to normal, but unsure of the future. Meanwhile, those of us who’ve been able to work from home may be dealing with burnout from sustained online interactions. Depression and feelings of loneliness and mental isolation (atop physical isolation) abound. In the face of overwhelming mental distress, even the modest act of re-engaging with familiar brands has been a great source of relief for many.
- Experiences: Certain experiences still don’t have digital equivalents, like touch and feel (AR and VR only substitute visuals and audio, not tactile feelings and smells), convenience (same-day consumption of certain items), exploration (thrift shopping, for example), and personal advice (knowledgeable, experienced associates aren’t easy to replace with chatbots) – all things we took for granted before lockdowns.
- Vaccinations: Increasing vaccination rates have boosted consumer confidence. Over 171 million Americans are fully vaccinated, and over 200 million have their first dose. But it pays to remember, the Delta variant can get even the vaccinated sick and/or contagious. Businesses are understandably timid about reinstating mask requirements, but it should never be off the table.
Lately, change is only accelerating
If four waves of Covid weren’t enough to put the final nail in the coffin, then there’s no reason to think brick and mortar retail will ever die out as an industry. But it will always feel the acute need to evolve as technology changes the way customers interface with brands.
Individual companies, on the other hand, are much more vulnerable. Even well-resourced companies can get caught off-guard during major shifts. The list of retailers that went bankrupt or closed during 2020 is proof of that.
The key is recognizing that consumers’ preferences, expectations, and daily challenges change at an increasingly rapid pace. Customers’ willingness to experiment and adapt is something that brands need to echo to avoid that final nail.
But this is where large, established companies have a real problem. While they have an abundance of will and resources, they lack the speed to make strategic decisions before the market can shift again. It takes market research firms an average of 4-8 weeks to produce results. It may not sound long, but that turnaround from data to actionable insight is, for retail, too slow.
So, what’s retail’s ultimate solution to keeping up with the speed of change?
Brick and mortar retail is on the right track to a solution. As reports from 2021 will show you, retail’s top expected trend was AI integration, and for good reason. AI’s speed and adaptability are practically tailor-made to handle changing markets.
But AI isn’t magic – it needs the right training data, and for that, the people behind it need to have the right ideas first. Furthermore, not every AI can establish a top-down, company-wide strategic framework designed to cope with rapid market changes. But that framework is exactly what top executives need to easily make strategic decisions that will steer the whole company in the right direction.
Consider this; an AI trained to have empathetic conversations with an entire universe of customers at once, designed to pinpoint exactly what experiences make you worth shopping with, and why they choose one company over another. In other words, a high level of both actionable intelligence and scalability that’s as fast as the market itself.
I’m Worthix’s Head of Content, editor and producer of the Voices of CX Blog and Podcast and backup watercooler comedian (see Peter Sooter). I’m a Film Major who enjoys good writing (books, too), martial arts and competitive games, virtual or not.