Why Retail Stores Are More Important Than Ever
COVID-19 has accelerated many trends, one of which is the demise of poor performing retail chains. In recent recent news, brands such as Brooks Brothers and Pier 1 Imports have joined an extensive list of retailers filing for Chapter 11. For many retailers, even before the pandemic the size of their network was bloated and brought down the overall performance of the company despite the hope that better times were just around the corner. While COVID emphasized this fact, many retailers were also ill-prepared for the massive shift to online sales, which ultimately created a perfect storm.
While some pundits predict that COVID-19 will lead an to overall demise of physical stores, we believe that stores remain a vital element of a retailer’s marketing mix while also helping meet consumers social needs. There is no denying that retailers will have an uphill battle in trying to lure customers back to their physical stores, but here are four key reasons why retailers shouldn’t give up hope.
Factor One: People Desire to Shop
Our recent COVID-19 study identified that consumers wish to visit stores once they feel confident it’s safe. When asked to prioritize their activities post-pandemic, most noted shopping stores and visiting malls were their number one or two priority (eating at a restaurant ranked either close second or first depending on the age group). My recent visit to Ikea to purchase furniture for my daughter’s apartment reinforced this fact as I waited with hundreds of other customers as the retailers managed customer congestion and level of in-store distancing.
Factor Two: Stores Remain a Place to Buy
For all of the growth of online shopping and the many new options such as direct from retailer warehouses, BOPIS, or online-only retailers such as Amazon, consumers prefer to shop in physical stores for most items. A clear sign is that customers are willing to risk their health when visiting stores as part of the phasing-in process during the pandemic. Many of the items customers are looking to buy could be quickly and safely purchased online. However, online does not replace the social value and sense of discovery that customers find when shopping in physical venues.
Factor Three: Fits Our Need for Belonging
Shopping for the past decade has gone from a functional need to a form of recreation; social events were about being seen and participating in a shared activity helped support a person’s self-image. Once given the green light to shop, customers have flocked to high street stores and shopping malls to meet friends and share experiences that video calls have failed to replace.
Factor Four: Gets Us Out of the House
Humans are social creatures, and being cooped up in their homes for months on end has led to a pent-up demand to get outside and shop. Behavioral scientists have reinforced that as humans, we are driven more by the fear of missing out than the opportunity to gain something new. Being locked-up in our homes and not being able to shop beyond simple necessities has created a significant void in people’s lives. A vacuum that, once given the opportunity, can only be fulfilled by shopping in actual stores.
As the retail bankruptcies list continues to grow, the carnage is not over. Although the pandemic has disrupted everyone’s life and could force communities to reinstate lock-downs due to a second and third wave of the virus, one thing is clear: it has not killed our desire to shop in physical stores.