Lockdowns in many places have begun to open up or they will soon. Until this new Lockdown came into effect, Primark in London saw long lines of people waiting to get in and keeping their distance from one another at the same time. Once stores all over the world begin to open up after being closed for long periods, how will people experience this new world of High Street retail.
Changing consumer behavior
We have all become accustomed to being at home and shopping online as well as searching for, and finding other ways to entertain ourselves, like watching video games or playing for that Jackpot Casino Bonus. Things have not really returned to normal, notwithstanding the signs welcoming back their customers. The pandemic is still very much with us and may go on for some time.
Shopping in high street stores today means waiting in line to enter, temperature gauging, wearing of masks and using hand sanitizer. The stores need to undergo serious cleaning procedures prior to opening each day and changing rooms, if in use at all, need to be checked and cleaned between shoppers. The cash desks are heavily screened and any returned items need to be placed in quarantine before being returned to the shelves. Customers will need to adjust to the new norms if they want to go back to their favorite shops.
All these rather obvious and visible precautions are there to make everyone feel more safe and secure. Paco Underhill, an expert in consumer behavior in Envirosell, based in New York City, says “our radar for hygiene and our radar for safety are eminently more acute than they’ve ever been before. According to Underhill “any issues customers encounter with cleanliness, whether perceived or real, will have lasting effects on their loyalty”.
Retail stores have taken a serious battering over the last months with all the lockdowns including companies like Debenhams and JC Penny where bankruptcy is on the cards. According to the US Census Bureau Clothes stores in the United States showed a serious drop of 63% in May (from the previous year) and that followed a 90% drop from the previous month. Germany saw its retail close for only a 4-week period but they too reported lost sales worth 30bn euros.
As mentioned earlier, shoppers have now become accustomed to online shopping. Basically, ordering everything from groceries, to clothes and toys for the kids. Everything gets delivered to their homes. This is likely to continue even after the pandemic is behind us. Taking this into account, plus the new procedures necessary for high street shopping, it begs the question of how the high street will fare in this new shopping era? As people have switched to shopping from their living rooms it could well be that high street retail will need to change and this in turn will change the nature of our cities.
Are people returning to towns and cities?
During the lockdowns many places were like ghost towns. It will be interesting to see how many people will return to the high street once restrictions are lifted. We saw in England when non-essential stores opened up in June, that even though there were indeed lines of people outside John Lewis and Nike, sales were still down 59.2% from those for the same period in 2019, as reported by the retail analytics company, Springboard.
Another major factor of the decline is of course the complete loss of tourism. According to Underhill, the big stores like Selfridges, get around 50% to 60% of their sales from foreign credit cards. HSBC research reports that in Hong Kong it is mainland Chinese tourists who account for around two thirds of sales of luxury brands and they also account for a third of sales in European cities. It is still unclear whether once air travel restrictions are lifted, tourists will return to their previous shopping habits or will prefer holidays where they are doing outside activities which may be seen to be safer.
The fact that pubs and restaurants are still closed and the obvious problem of toilet facilities being unavailable also has an impact. Clare Bailey, a UK based independent retailer says “You can’t go out for a day shopping, because there’s no toilet, right? That’s a bit challenging”. She goes onto say, “You can’t sit with your friends and grab a pizza for lunch and chat and laugh as my teenage daughter would. And you can’t even try on clothes together because you can’t try on clothes at all. So, the shopping experience is very limited”. For those in the more high- risk groups, like pensioners who often met up with friends for lunch and shopping, this is unlikely to be a possibility until a vaccine is found.
People miss the shopping experience
Even though people are not returning to the high street in droves, there are people in the shops. Many consumers are still keen to have the old purchasing experience of browsing and hand on purchasing even though many are wary of the risk of public interactions.
Many experts say that we will likely see an initial rise in sales, as a result of people being unable to purchase for some time or those who chose not to have items delivered. Only after this initial period will we be able to ascertain whether high street retailers are able to compete with ordering online.
Paul Durkin, who is head of UK retail at Cushman and Wakefield says “The best shot of brick-and-mortar success are those that can offer products or experiences that can’t be found online”. He goes on to say “Particularly for higher value items, things where the touch or the feel of the product is really important. That will remain a really important role of the store going forward”.
An example of this can be seen with stores like Bergdorf Goodman. They are offering private shopping by appointment that includes same day delivery.
The big discount stores such as Primark and TK Maxx may have an advantage as they do not have any internet commerce. In order to gain the big discounts, consumers have to visit the stores. However, if the situation continues, and consumers do not return to the stores, many of the retail high street businesses are expected to close their doors.
Even some of the very successful companies like Zara are reducing the numbers of stores and are closing around 1200 stores in Europe and Asia. In the US, Nordstrom is shuttering 19 of their stores. A research retail firm, Coresight, is predicting in 2020 around 25,000 shop closures in the US. They say that garment and department stores are likely to be the worst hit.
A new vision
Could it be that people will return to the high street but, perhaps for different reasons. Maybe shopping will not be the focus of coming to the high street. Experts are suggesting that maybe these areas will become more important for communities as meeting places and a way to support local businesses and services. “It’s about looking creatively at the space and thinking, what does the community need? And what could we create that the community would use?” For instance, drop-in childcare has become a crucial service during the pandemic.
Farmers’ markets may be an option. According to Envirosell research “touchless payments, an outdoor environment and the assurance of a more traceable, local food supply, may appeal to many consumers’ priorities in 2020.” Perhaps open-air shopping, such as sidewalks and outside dining will ‘replace’ the high street shopping experience.
We are ultimately social beings and are looking for social experiences. It is not enough to order what we want online. The high street may look very different when we return but the desire for entertainment and community is what will ultimately draw people back.
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