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What Could the Post-Pandemic Retail Industry Look Like?



It appears the retailers that survived COVID-19 have been deemed “essential”. The past year has reshaped the industry and these changes will carry over into the long-term future. Retailers must work harder and smarter to maintain consumer allegiance by addressing several shortcomings exposed during the pandemic.


It was a record year for many big-box retailers like Walmart, Target and Amazon, but approximately 50 national retailers filed bankruptcy in 2020, including J. Crew, J.C. Penney and many more. Retailers with already existing robust e-commerce capabilities outshined their competitors, and it was often this factor that made the difference between staying open or closing the doors.


Online Shopping: Digital Capabilities

While many shoppers prefer the experience of a brick-and-mortar store, the pandemic caused consumer behavior to shift to the digital sphere; nearly 50% of the retail spend was online in 2020, compared to around 30% in 2019.


This shift to online shopping doesn’t necessarily mean shoppers were happy to do it. According to a report from Contentsquare, only 15% of consumers surveyed were satisfied with their online shopping experience, attributing their unsatisfactory experience to site crashes, the ability to find their desired product, and delivery speed.


According to the 2021 Retail Industry Outlook by Deloitte, only three in ten executives rated themselves as having mature capabilities within digital. I expect that every retailer that can afford to will be investing in tech this year, creating a better online shopping experience for their customers.


Health & Safety: Contactless Shopping

As Spring approaches and COVID-19 regulations begin to loosen, customers will physically return to stores with the expectation of a safe shopping experience. For those shoppers comfortable enough to enter a store, they will expect hand sanitizer stations, social distancing, and one-way aisles.


For others, contactless shopping, including BOPIS (buy online pickup in store) will be expected at their favorite local shops. A study by Adobe Analytics found that BOPIS orders surged 208% in April 2020 from the year-ago period. This combines the e-commerce experience with in-person shopping; smaller retailers will need to have the ability to offer their inventory for sale online, and then deliver it curbside for the consumer.


Supply Chain: Manufacturing to Delivery

I know I’m not the only one that ordered something online in 2020 and saw that it was backordered – sometimes with a wait of several months. It became glaringly obvious retailers were not equipped to handle increased consumer demands. In their defense, no one could have predicted the needless purchases brought about by the toilet paper apocalypse.


According to the Deloitte 2021 Retail Industry Outlook, eight out of ten retailers expect moderate to major supply chain investment in 2021. It will also be important for retailers to diversify their supply chain network and introduce new vendors. The USPS was hammered with a historic volume of packages, and yet I never experienced a UPS or Fedex delivery being delayed by weeks. In order to maintain consumer satisfaction and trust, retailers will have to be willing to add new vendors to deliver a better overall experience.

Retailers can approach 2021 with two different methods: essential businesses that benefited from the change in consumer behavior will continue to drive revenue growth and seek out new revenue models. Specialty retailers that struggled during the pandemic will focus on cost-cutting to remain operational. The three opportunities mentioned above will be vital to the success of retailers that can afford it.


Justin Langlois, CCIM is a Commercial Real Estate Investment Advisor with Stirling Properties servicing Baton Rouge, Louisiana and surrounding markets. Please reach out to Justin to discuss your real estate investment strategies.

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