Across the country, thousands of stores are closing as a result of heavy digital competition and declines in foot traffic hastened by the COVID-19 health crisis. Still, some retail experts appear to be optimistic about brick-and-mortar’s recovery — which they say could happen as soon as this year.
According to a new study from the International Council of Shopping Centers, 60% of commercial real estate leaders and 55% of retailers predict a return to pre-pandemic levels by the end of the year. It attributed the expected improvement to the resilience of consumers — many of whom have been aided by federal stimulus payments — as well as their desire to visit stores when lockdowns are lifted and vaccines are more widely distributed. It also referenced the acceleration of contactless services that have led retailers to rethink their existing physical formats.
As the outbreak took hold in the United States, many companies were forced to undergo years’ worth of transformation in a matter of months. The ICSC survey found that two-thirds of retailers began offering in-store fulfillment options in response to the coronavirus, while nearly three-quarters (or 73%) of small businesses introduced click-and-collect services.
Notably, the organization discovered that a whopping 88% of shopping centers are being used to fulfill online orders, and almost all (or 99%) of retail respondents reported that their stores fulfilled online orders to some degree.
“Many [retailers] were able to pivot quickly and begin offering click-and-collect to consumers utilizing parking spaces and curbside pickup, which has helped them survive,” said ICSC spokesperson Stephanie Cegielski. “Omnichannel was becoming a necessity prior to the pandemic and is definitely something that consumers have come to rely on. Consumers are going to continue wanting the flexibility of either picking up at a store or having an item shipped, so retailers should be prepared for both.”
According to a recent report from Coresight Research, retailers could collectively announce as many as 10,000 store closures in 2021 — a 14% increase from 2020’s already devastating levels. However, experts suggest that this could be a result of store rationalization — that is, shedding underperforming outposts — rather than e-commerce’s cannibalization of brick and mortar.
What’s more, explained 5WPR president Dara Busch, some consumers are growing tired of turning to digital channels for their shopping needs. While they’re not expected to return to their pre-pandemic habits altogether, customers are anticipating a return to stores — so long as there are sufficient precautions in place to ensure safety.
“I think we’re getting into this period where have a bit of online shopping fatigue, and people are longing to go back out and spending a day at the shops,” Busch said. “Brick and mortar will have a comeback, but it’s got to be clean, efficient and well run. Customers will return with purpose; they might not be spending an hour in the shoe departments like they once did, but they could very well still visit stores to try on the shoe, buy it and get out.”
As for what that near-future brick-and-mortar experience will look like, retail consultancy A Line Partners founder and CEO Gabriella Santaniello suggested that experiential retail — which had largely been put on hold as COVID-19 continues to spread — will still have purpose but need to be reevaluated. While high-touch services might no longer resonate with today’s crowd, Santaniello said that there are some in-store experiences that just cannot be replicated online.
“There’s a belief that, after being on lockdown and wearing stretchy pants for a year, we’ll go into this roaring ’20s period, and shoppers will be back with a vengeance — that they’ll want to wear cocktail dresses and high heels as they attend fancy parties,” she told FN. “I think it’s going to take a little bit longer than people think to buy stuff, but they still want experiences — trunk shows, luncheons, meeting with a stylist. At the end of the day, people are just dying to go out, feel normal and have human contact.”