Michael Brennan|March 19, 2021

Last week’s Profusion webinar – Buy before you Try – featuring Profusion CEO, Natalie Cramp, in conversation with Majestic Wine, L’Oreal and Red Ant Retail Solutions, highlighted a number of the retail challenges and opportunities to emerge from the last 12 months. 

Of course, what we’d all like to know is how consumers are going to behave post lockdown. Is the Bank of England right to highlight a potential boom in ‘revenge’ spending? Are we ready to go back into retail stores? Are we happy with our ecommerce experience? Which behaviour changes are likely to stay, and which will be dropped (asap)? 

The ideal, as in so many fields, is to take the best of both worlds (the physical and the virtual) into the retail future, improving our quality of life, our customer experiences, and our well-being.  

Already it is fascinating to see some of the bets being placed by our leading retailers, with Marks & Spencer planning the demolition of their flagship 90-year-old Marble Arch store – which once made more money per square foot than any other shop in the world – while John Lewis is well advanced with store closures and property repurposing, including its own flagship Oxford St store, along with a pivot toward a more local proposition. 

Slightly ironic that these and other redevelopment plans are focused on converting retail space into office space – at exactly the time that the future of the office is being challenged as never before. The future shape of our city centres will be hugely influenced by the shape of demand for office space. 

Interestingly here we are already seeing Ipswich using the 15 minute city concept as the springboard for a new vision for their City – focused on residential and leisure rather than office or retail space.  

The pandemic has been a boon for local high streets relative to City Centres, with surveys showing that remote working has driven increased local engagement, enhanced community dynamics and renewed interest in supporting local, independent, retailers. 

The growth of ecommerce through the pandemic was driven by necessity and has had a profound impact on the grocery market especially. These changes are unlikely to be dramatically reversed. There is little pleasure to be had in doing the weekly shop, many of us are only too happy to shop the essentials online and will continue to do so. 

For ‘non-essential’ (as we’ve come to know it) retail the picture will be a little different, there is far more potential for a positive, enjoyable, customer experience in discretionary areas of spend, with surveys showing that a return to physical clothes shopping is most eagerly anticipated by consumers. 

What is certain is that consumers have, amid the trauma and disruption of the pandemic, proven (to themselves) the benefits of changing behaviours and habits. No longer will businesses be able to rely on inertia to retain customers, we all know we can take our business elsewhere and we are willing to try new ways of doing things. Customer Experience has never been more critical to success. 

As such and as discussed in our webinar it will be fascinating to see the extent to which new ecommerce audiences bring their appetite for digital interactivity into physical retail stores. How can we best connect the virtual and the physical environment to deliver truly personal omnichannel retail propositions? 

Can we integrate this with the demand for safe shopping, encouraging people to book appointments and consultations in advance – for example completing a beauty diagnostic online and then visiting a store for advice and treatment? 

Have we now reached the stage where we can transparently recommend that customers check-in on arrival at a store? Have consumers now seen enough of the advantages of a personalised service experience to sacrifice the perceived advantages of anonymity and privacy? 

An interesting area of discussion in the webinar was the impact of new audiences on the digital service proposition. For example, the ecommerce audience is significantly older than it was prior to the pandemic, and older users have different preferences and priorities compared to younger consumers. 

In virtual service for example, plain text live chat is seen to be particularly effective for older audiences compared to the more sophisticated interfaces that younger audiences may prefer. 

Self service is another interesting area to consider. Amazon have opened their first self-service store in the UK. The Ealing store allows you to grab, go and pay later with no need for any human interaction. At the same time critics of the John Lewis’ turnaround plans lampooned their ambition as creating the ‘Argos of the middle classes’. 

The tension between a high-quality in-store service experience, for which John Lewis was once rightly lauded, and the demand for speed and convenience exemplified by Amazon Go, lies at the heart of the challenge facing retailers today. It is probably fair to say that most people want both at different times and in different categories – and retailers must cater to those diverse demands. 

The bigger and more important aspect of the Amazon Go innovation, along with the Amazon purchase of Whole Foods is how this signals a movement by ecommerce leaders into physical retail. For too long we have assumed a one-way journey – from stores to online, now we are seeing leading brands recognise the power (and market share) of physical retail. 

Niche retailers will find it easier to define a position in the new retail ecosystem while mass market brands will need to segment their audiences effectively and provide solutions for their distinct needs. In this respect John Lewis is going in the right direction by diversifying their offer – the question is whether they have called the end of the department store too soon? 

In the UK shopping has long been core to our leisure repertoires, that is unlikely to change any time soon, but retailers need to step-up their focus on Customer Experience, always asking how new initiatives provide value for time, go beyond what is available online, how we engage customers, how we connect their virtual and physical interactions, how we entertain, surprise and delight. 

With thousands of stores closing across the UK this is a watershed moment for retail. It is an opportunity to emerge stronger and fitter for the challenges ahead. That will take imagination and commitment. Starting with an acceptance that the world has changed – and so must we.  

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