Retail's Silver Lining During 2020

It’s safe to say that 2020 has taken the country — and the entire world — by storm. We’re currently eight months into the COVID-19 global pandemic, and while a majority of people are yearning for a return to “normalcy,” there are many industries and businesses that simply will not, retail included.

Ongoing research surveys by TPN, the creative commerce agency, explored and compared shopping behaviors prior to COVID-19 and as states implemented stay-at-home restrictions. The study focused on the increase in online shopping and, more specifically, the usage of buy online, pick up in-store (BOPIS), which uncovered an important shift in motivation and experience:

• Pre-COVID BOPIS users were driven by value and convenience; 50 percent were attracted to no shipping costs or fees, while 21 percent noted that BOPIS allowed them to be smarter with their time. Those sentiments shifted drastically in April 2020, with 60 percent of BOPIS users noting that they were using the service to avoid long lines and crowds, and 52 percent noting that they were using the service to minimize time spent in-store.
• Before the pandemic, 35 percent of BOPIS users said the service helped them feel more in control and guarantee the items on their list would be in stock. Now, 42 percent of BOPIS users believe the service gives them less control, due to concerns their order won’t be fulfilled completely.
• Before the pandemic, only 4 percent of BOPIS users said they missed the experience of going into a store. That number jumped to 30 percent in the first months of the pandemic, when visiting a store became more of a challenge.
• The survey revealed that many shoppers will return to shopping in-store when it feels safe to do so, but despite their less-than-ideal experience, online shopping will remain an important part of their overall routine. BOPIS usage was set to rise pre-COVID as shoppers had indicated a desire to expand their usage beyond routine trips for high-value special occasions like back to school, hosting occasions and vacation preparations. That trend is likely to accelerate as adoption rates expanded over the past eight months. 

It’s clear the pandemic has created a seismic shift from in-store to online shopping, but 2020 has also served up significant shifts in lifestyles, social movements, communication methods and value systems. Retailers have met operational and logistical challenges while the shutdowns and resulting economic hardship has shuttered several mom-and-pop shops and forced major retail chains into bankruptcy. On the flipside, e-commerce has been thriving and new categories have been flying off the shelves. With such great divergence in business health and economic impact, we're truly living “the best of times and the worst of times.” Retailers must evolve and find those “silver linings” that have emerged in this environment and acknowledge that they may face unexpected competition. Here are some considerations for how to embrace both accelerated and newer trends as well as differentiate for a brighter retail future.

• Online shopping will evolve to accommodate the expanded usage, changing expectations and additional categories that people will shop for online. BOPIS should evolve from an add-on service to an enhanced experience that supports discovery. In-store shopping will also evolve from an experiential standpoint. The pandemic has created a disruption and an opportunity to reimagine physical retail spaces and also meet new needs created by lifestyle changes and the unfortunate business closures.
• We will start to see the emergence of even more purpose-driven retailers. Brands that rise to meet higher expectations, with authenticity and consistency, will find new avenues for consideration and loyalty, especially among younger shoppers.
• There will be different geographic opportunities. People are leaving their urban outposts or finding an upgraded home environment due to many drivers, including low-interest rates, which appear to be here through 2023. It will be important to identify how this impacts priority markets and store clustering along with store openings and closings.
• The importance of community and “local” will continue. Consumers will rally around their local stores to help keep them alive and reward those small businesses that are creative enough to stay afloat.
• Teleguidance and tech-oriented interaction will become paramount. Many more people have become comfortable with virtual interaction and seek personal device tools, which will open up opportunities within the shopping journey, especially as it relates to providing health guidance or education via QR codes during the shopping experience.

Within this dynamic environment, there’s room for innovation, creativity and a human touch that will go a long way to keep the industry at large alive and well.

Cheryl Policastro is the head of research and insights at TPN, a global creative commerce agency.