Cancel (Bricks and Mortar) Culture

In the post-pandemic age, retail stores will continue to serve a purpose. That purpose may not be as robust or as prevalent a service as it was "B.C." (Before COVID) but it will survive. Experts and even retail CEO's realize that there was a shift already underway. Online shopping was slowly becoming more acceptable and accessible. The thought was it would cap out at 20- 25% of retail sales. The most valuable customers were proven to be those who shopped in both channels as they spent 2-2.5 times as much than if they shopped in only one channel.

For all of its properties and symptoms, COVID-19 has accelerated the pace at which retail is transforming. The showrooming that was being experimented with; the BOPIS technology that was being tested; the contactless payments systems and self check-out lines in the supermarkets that were available sporadically; and the auto-checkout technology that Amazon had been pioneering - all of this has now been given rocket fuel to roll out and fast. (Side note: Consumers are now used to getting products delivered to them within hours, so that disadvantage has now also disappeared for the online community). "Dark Stores" are even now becoming popular - which are not stores at all but localized distribution centers to speed up and lower the cost of that 'last mile' in the supply chain - delivering to your door. I also bet that drone companies are adding staff since drone deliveries may now be a necessity for retailers. Not to mention Fedex's national tv ad spot showing a robot delivering packages.

All of these advances were well underway and would have come to fruition eventually but it does feel like a real reckoning. There is now that burning platform that consultants always feel there needs to be to effect real transformational change. I have poo-pooed the rhetoric of the always impending disaster for bricks and mortar retailers for over 20 years. I was tired of hearing about it. What COVID-19 has done is ripped the bandage off the wound of an over-stored and over-malled country and in one fell swoop instantly started rationalizing the industry. It feels like only Neutron Jack could have cut as quickly and as deeply.

As epitomized by Simon and Brookfield's constant investments in major retailers whom they think have longevity and can continue to pay rent to themselves, Bricks and Mortar stores will still be a major part of the retail offering for one good reason: People still like to go out shopping. Not only is it a social activity, but we are hunters and gatherers by nature and we like the physical thrill of the hunt. No matter how shoppable the online store is, it will never replace the physical manifestation of merchandising and immediate gratification - not to mention staff interaction.

Whatever got you here may very well prevent you from getting there...

- Marshall Goldsmith

The store of the 'Next Normal' will look and feel different. It will approach merchandising in a more curated way within the physical space but create a much more expansive 'endless aisle' approach as it synthesizes the online world seamlessly into the physical store experience. It will become partly a distribution outlet and partly a place where a consumer can truly experience the brand through interactivity, technological advances (such as in the fitting rooms), and mass personalization (see Minority Report Gap store visit as an extreme example).

Like the real threat that "Cancel Culture" represents, we have always been too quick to dismiss Bricks and Mortar and while it makes some sense to kick them when they are down - this pandemic will not last forever and people were ordered to stay at home so no wonder there is a store crisis. Stores will continue to prevail as long as they adapt, listen and learn from the new consumer mindset, and embrace the fact that the online shopping experience must become a bigger part of their in-store experience than ever before and fast.

Lloyd A. Perlmutter is Founder/President of Veritas Advisory, LLC and has been leading and advising organizations for over 35 years. Call 248-794-9673 to have a meaningful and powerful conversation