What Has This Pandemic Taught Us About Retail?
-Gerry Marrone, Chief Revenue Officer
A whole lot.
I live in New Jersey, about 35 miles outside of NYC. To say we are in the center of this in the USA would be an understatement. We have been on lockdown since March 21st, and I don’t expect things to change until the beginning of May. During this time there have been countless articles about the effects of COVID-19 on society —this will not be another one of those. Here are four things I think we should think about regarding retail merchandising.
What is Essential Versus Non-Essential?
Is this the conversation that we should have been having for the past several years—instead of talking about some type of retail Armageddon?
We have gotten close at times—qualifying retail as either “good retail” or “bad retail”—but we have never talked about how essential it is. There has been considerable talk about being over-stored—which I agree with—but, how many people feel like we have too many food stores now? Too many retail pharmacies? I would venture to say that no one is thinking about that, instead, they are thinking about which store might have milk today. I think people are far more concerned about how the retail merchandising is being done to keep the shelves full.
And how about the types of establishments that made the list… interesting isn’t it? Here in NJ, there is a posted document on the state webpage. Aside from the obvious, like grocery and drug stores are there any surprises? Imagine for a moment that you were on the Governor’s staff and asked to assemble a list, would it look like this:
- Grocery stores, farmer’s markets and farms that sell directly to customers, and other food stores
- Pharmacies and medical marijuana dispensaries
- Medical supply stores
- Gas stations
- Convenience stores
- Ancillary stores within healthcare facilities
- Hardware and home improvement stores
- Banks and other financial institutions
- Laundromats and dry-cleaning services
- Stores that principally sell supplies for children under five years
- Pet stores
- Liquor stores
- Car dealerships, but only for auto maintenance and repair, and auto mechanics
- Printing and office supply shops
- Mail and delivery stores
- Mobile phone retail and repair shops (added 3/24/20)
- Bicycle Shops, but only to provide service and repair (added 3/24/20)
- Livestock feed stores (added 3/24/20)
- Nurseries and garden centers (added 3/24/20)
- Farming equipment stores (added 3/24/20)
So, what makes all of these businesses essential versus the ones not on the list? In this case, I believe it is a combination of what we must have, layered against where we can practice the social distancing that is required—because I know plenty of people, some even in my own household, that think hair salons, nail salons and gyms are absolutely essential.
But what is the point?
Think about the human interaction of retail. The essential need for us to be in contact with others. Every business on the essential list requires human interaction similar to the non-essential list. However, the risk/reward is different—that seems to be where the line is drawn.
Which leads me to the next point.
Brick and Mortar Stores are Important
More important than they have ever been.
There has been overwhelming discourse over the past few years about a Retail Apocalypse. Massive store closures and contraction happening. Brick and mortar retail is dying. I could not disagree more strongly with this entire conversation—I purport that retail is changing. Change can be good or bad which we all know. However, this pandemic may have opened your eyes to a new kind of change—not discussed prior to this when mentioning store openings/closings.
How would you feel now, during these times if online sales made up the lion share of your purchases? According to the US Commerce Department—online sales were 16% of total retail sales. So, 84 cents of every dollar were spent in a store in 2019—but all indications say these numbers will continue to trend downward.
Has this pandemic changed your attitude about shopping online? Have you tried to buy things online that are either out of stock or can’t be delivered for a week or more now? I have. It is very frustrating. Still, too much of a hassle to get in your car, drive a mile or so to a store, select what you want and bring it home? I doubt it.
I believe that what we are experiencing now will have a significant attitudinal effect with respect to online shopping, primarily because I think it has helped make a case for my next point.
Online is NOT a Panacea
How has your customer experience been with online retail in the last couple of weeks or months? Everything in stock and ready to ship to you in two days? No?
Now imagine if online buying was your primary method instead of a secondary means of acquiring goods. For a lot of us, this wouldn’t be ideal or even feasible. Especially if it is anything like what we are currently experiencing.
There is and always will be a place for online shopping—that goes without saying. What I am proposing is that this pandemic may have changed your perspective on how much you can or should rely on this channel always being there for you—or it being your primary place to fill your needs.
We used a local grocery store order online – bring out to my car service for the first time. This is our neighborhood store where there is outstanding retail merchandising taking place in-store. However, the online experience could have been much better. We didn’t find out that one-third of our order while showing available online was not available at pick-up. Not exactly what I would have hoped for.
What a lot of this has illustrated for me is online, especially in the grocery business has a long way to go. Which leads me to my final point.
Retail Staff are Both Essential and Undervalued
No one ever really questions the value and importance of first responders and healthcare workers—they truly are heroes today and every day. Our current reality has simply amplified this 100 times over.
But how about the workers in the retail store?
Amazing. Fearless. Terrified. Desperate. Tireless. Exhausted. These words and many more could easily be attributed to first responders and healthcare workers, but today they also describe retail merchandising workers. These people are clearly essential, no? How would you be doing today if they chose to not show up? To shelter in place to protect themselves? Probably not so well.
What happens when this is over—because it will end—and we will return to whatever our new normal becomes. Do we just say thank you, pat them on the back and move on? I’ve read all the stories about the retailers giving their staff temporary wage adjustments—like $2/hour more for their effort, or a $500 bonus.
Is that enough?
Not by a longshot.
I think retail needs to take a deep breath when this is over—and then rethink the model. Retail is not dead. Good retail merchandising and good retail workers are paramount to the long-term success of this industry. We should be examining the business from the ground up—not top-down. Are these front-line warriors being treated the way they should be? Are there career opportunities for them? Can they earn a living wage and pursue the American dream?
So, when our government is putting together the inevitable bailouts that will be required let’s not forget about this group of selfless, dedicated, stressed-out workers who are risking their health every day to make sure you have the essentials you need to quarantine because they have chosen to be out there for you.
Gerry Marrone is the Chief Revenue Officer for the SPAR Group— a diversified international merchandising and marketing services company that provides retail merchandising and other marketing services to manufacturers, distributors and retailers worldwide, primarily in mass merchandise, office supply, grocery, drug, dollar, independent, convenience, home improvement, and electronics stores.