'New' Capabilities for Post Pandemic Retail

Earlier this year, American Dream (the mall) opened its doors on its newest phase to become the largest Mall in America with 350 stores and 3,000,000 square feet in East Rutherford, New Jersey. This project, 20 years in the making, was set to become the ‘new model’ for experiential retail in America. A shopping mall anchored with an aquarium, miniature golf courses, and a Legoland as developers look to deliver on a more immersive and entertaining retail destination for families and tourists. Truly a Dream of what developers hope will be the new shopping reality.

Then along came a pandemic, thank you COVID-19.

With many malls in America closed for a second month, or operating under strict limited occupancy rules, the new reality of retail is drastically different than what the developers had hoped for in the American Dream or what you will find in any business case study in the history of retail. We have malls with locked doors, stores with 25% occupancy thresholds, and all of Spring’s inventories weighing on the balance sheet. Change has never been more imperative.

The last two months have given us the chance to hit the proverbial reset button on our ways of working and our ways of thinking. There has never been a better time, or a better reason, to break free from the gravitational pull of how we used to operate as retailers.

Adapting to community rules on store operations will allow us to reopen our doors and provide some temporary relief. We still need fundamental changes in our industry to survive our current reality and to prevent a repeat of the economic impact that will come with the next pandemic, or natural disaster, or economic recession. The good news is that we can start the journey without venturing too far out on the cutting edge as technology has far outpaced our industries’ ability to keep up.

Let’s start from the outside in. Not because it is more important, but rather because we exist to serve an audience, and failure to align to how they consume will lead to a far more dire existential crisis. 

 New Capabilities in Customer Engagement:

Serve customers in their moment of need – With communities ordering the closure of ‘non-essential’ stores, more than 50% of spring inventories are sitting in stores that cannot open (or are just in the process of reopening) to customers. Many of these stores, and their inventories, could have been spared lost sales if they had a simple Buy Online Pick Up in Store (BOPIS) capability prior to the shutdown. Retailers like REI, Ulta, Home Depot, and Dick’s Sporting Goods were able to quickly adapt BOPIS capabilities allowing customers to pick up merchandise ‘Curb Side’ in a matter of weeks. The process is simple, order online and then text a local number from the parking lot with your order number when you arrive. With many consumers in the high-risk group, this new capability is beneficial for customers shying away from human contact but also for the time strapped parent not wanting to drag kids into crowded stores.

Putting Inventory to Work – Curb side pick-up is a great way to keep stores working if you have access to a curb, but not having access doesn’t have to mean staying closed. We can take a page from great retailers like Tesco who created ‘dark stores’ where the store is closed to the public while employees are inside to pick and ship orders direct to consumer. The only difference is that a store could only be temporarily closed, and the number of orders sent to that location can be restricted to the capacity of the pickers following appropriate social distancing rules. Not only will we be able to keep our salaried store management employees engaged, but we can relieve the glut of inventory clogging the stores as we begin to see markets slowly open up. Post pandemic, having this Ship from Store capability will not only help us save the sale and delight the customer, it will reduce mark downs caused by seasonality and consumption trends across geographies.

Instant Gratification - Prior to the pandemic, many retailers evaluated the idea of Same Day / Next Day Delivery to stay competitive with Amazon’s Prime Now and two-day shipping. Sadly, this new capability didn’t measure up in the old normal, however, in our new normal there is an entire segment of customers who will avoid coming into stores for the foreseeable future. For these customers, their only option is buying online to have merchandise delivered. By connecting to a delivery broker like GoFleetly, all retailers can leverage a single interface to manage Same Day Delivery providers like Post Mates, Instacart, and Deliv in their area to optimize and deliver local orders quickly.

Shop, Scan and Go – It could take months or even years for customers to feel comfortable with having others touch their merchandise. Online is easier because we have used poly bags for as long as I can remember. In store, Kroger developed a handheld that customers can pick up as they enter the store to scan as they shop and pay on the way out. They have even added the functionality to their mobile app giving customers the freedom and independence of a completely self-contained self-service. My 75-year-old father can bring his own reusable bag and phone to complete his shopping with zero physical interactions while practicing safe social distancing.

These are just a few of the existing capabilities that we can harness to improve customer experience and meet our customers’ needs in this new normal.

But we can’t stop at the point of service. We must rethink our ways of working while preserving collaborative back office processes and the creativity of our people. This new normal has given us an opportunity to rethink how we develop new ideas and bring new concepts to market. After all, the products we create and the services we provide are why we are in business in the first place.

New Capabilities in the HQ:

Communication & Collaboration – Many retailers have added video conferencing to the toolbox of merchants and designers allowing these talented associates to work together from home in light of the ‘Stay at Home’ orders. There are additional tools on the market that can further enhance the effectiveness of teams without coming into the office. We can leverage technologies like Mural to share concepts across distributed teams. The best part about Mural is that when concepts are voted on, the participants won’t be influenced by how everyone else is voting.

Product Development – Gone are the days of frequent sourcing trips to Asia. Soon to follow will be the long wait for samples to be shipped around the world. Industry leaders like Gerber Technologies are committed to incorporating 3D Design and Tech Design into the pattern creation tools we already use to develop new products. Virtually sample your new design before placing your order for manufacturing. Tug on the garment and see how the material will react. Make a change to the 3D design that also updates the 2D cut pattern before it is fed into the manufacturing process. We can increase our speed to market while reducing our carbon footprint, not to mention cutting down on the potential to spread viruses.

Protecting our Employees – Our employees are the creative engine that drives our strategic competitive advantage. From designers to warehouse associates, they are essential. We need to adopt new policies and technologies to protect them. For instance, when Bird Flu emerged the airports in Asia installed cameras to measure basal body temperatures so they could quickly identify travelers who could potentially be sick. We could use similar technology to protect our workers and get those the help needed to return to work faster. There are also mobile applications that leverage location tracking to determine if too many associates are working in an area violating social distancing rules, or if they have come in proximity to someone who has been infected, thus providing an easy way to document contact tracing if needed.

Change is never easy, but in the retail industry we have been given the gift of time to think over the last two months. Will we use it to evolve or will we just try to survive today and pray that the worst is behind us?