For many brick-and-mortar retailers, the pandemic has only exacerbated already-present issues., Some major brands have shuttered locations, and others have even filed for bankruptcy.
“It's fair to say that right now is the most difficult brick-and-mortar retail environment in our lifetime,” says Britten Wolf, owner of BVW Jewelers.
“Retailers are playing a cat-and-mouse game with an invisible enemy they can't control," Wolf continues. "And all of this is happening at a time when retailers were already facing unprecedented competition from online juggernauts.”
For brick-and-mortar establishments that managed to preserve some sales volume by offering pickup and delivery options for their products, the outlook is slightly better. But many retailers face a steep climb back to pre-pandemic sales levels.
Taking Steps Toward Recovery
The major concern for retailers is that foot traffic is likely to take some time to return to pre-pandemic numbers.
“If we continue to see outbreaks and rising case counts like those occurring in some parts of the U.S., retailers will continue to suffer,” says Wolf. “Merchants can expect to operate on diminished capacity until there's more clarity on the pandemic’s path. Many consumers have also taken a financial hit and aren't likely to resume pre-pandemic spending anytime soon.”
Bryan Sebring, owner of Sebring Design Build, agrees. His company offers remodeling services and has a physical showroom.
“The next few months are likely to be an unpleasant rollercoaster for in-person retailers,” he says. “There's no way to tell which regions will remain safe for businesses to operate, and for how long. All any retail business can do is try to stay safe, so they can stay open.”
While the coronavirus can’t be predicted or controlled, brick-and-mortar business owners can take solid steps towards business recovery.
1. Reshape the in-store experience.
To compete with online retailers, brick-and-mortar establishments should capitalize on their greatest advantage: the physical in-store experience. Feeling, touching, smelling and tasting is something that ecommerce can’t provide.
Autumn Grant, owner and founder of The Kind Poppy, took advantage of this concept when she reshaped her in-store experience over the last few months. The Kind Poppy focused on online sales during the closure, reopening their brick-and mortar shop in August with a whole new emphasis on customer experience.
“With every purchase, we give a free sample of a new or seasonal item like bar soap, miniature bath bombs or shower steamers,” says Grant, whose company specializes in all-natural bath and beauty products. She believes that this tactic gives shoppers the promotional free items they’ve become accustomed to when shopping online, with the added benefit of making the experience immediate and visceral.
Other retailers are finding success by looking at the differences between digital and in-store experiences through the lens of the sales funnel, not just as sales channels. The tactile in-store experience can enable digital sales by treating retail locations as showrooms, offering visitors a chance to see the product in person during the purchase decision process. This approach can ultimately create return customers for apparel companies, for example, allowing the customers to first try on what size clothing fits in-store, then encouraging them to periodically buying more in the same size across digital channels. To enable this approach, consider deploying a rewards program or email campaigns to keep customers aware of new product releases.
2. Create real time, in-person events to draw crowds.
The Kind Poppy has also encouraged foot traffic by hosting classes and events. “We offered a socially-distanced yoga class in our courtyard, held a DIY Bath Bomb making night and a class on making clay earrings,” says Grant. “We sell a limited amount of tickets, due to COVID, and encourage patrons to shop during the classes. We’ve been innovative and have converted those ideas into sales.”
To compete with online retailers, brick-and-mortar establishments should capitalize on their greatest advantage: the physical in-store experience.
Grant has also seen an increase in business by holding pop-up shops. “We find local vendors that set up at craft fairs and markets for the pop-up shops,” she says. “They’re eager to participate, as most events have been canceled for the remainder of the year. They share the pop-up information with their customers and followers. Then we gain new followers. These cross-promotional events are a win-win.”
Events and entertainment are an important part of drawing customers to local brick-and-mortar retail, notes Ana-Marie Codina Barlick, CEO of Codina Partners, a real estate development firm that oversees Downtown Doral, a town center with many brick-and-mortar shops. “In late March, we kicked off an initiative featuring outdoor musical performances by local musicians.”
3. Rethink forecasting and managing of inventory levels.
Many brick-and-mortar stores are managing inventory much differently this year, in particular for the holiday season.
“We’re only buying a minimum of seasonal products this year,” says Grant. “We’re fortunate that most of our wholesale vendors have offered net terms of 30, 60 and 90. If you can take advantage of these sorts of terms or negotiate them, it will help you more effectively manage your inventory forecast,” she says.
Many retailers have pared down to their core sizing based on historic sales and most are counting on their online sales as a way to move excessive inventory, according to Michael Satterfield, owner of RBRWholesale.com. His company supplies independent retailers with brands such as Original Cowgirl. They are also currently setting up a brick-and-mortar destination retail space.
“Retailers have also shifted to buying smaller packs of limited stock and supplementing the bulk of their inventory with items that can be replenished quickly or drop-shipped to a customer if they need a different size or color,” he says. “These are all viable options to consider."
4. Examine your marketing strategy.
Business consultant Michael Sipe suggests ensuring that it’s as easy as possible for people to do business with you while acknowledging and accommodating the fear prevalent in the market regarding visiting physical locations and handling merchandise that others have touched.
“Feeling safe is the emotion driving people’s behavior,” he says. “The challenge of making people feel safe is now critical to business survival. Consequently, marketing, presentation, packaging, delivery and service all must be re-imagined in the context of enhancing employee and customer perception of safety.”
When it comes to safety, perception is important, notes OP Almarez, CEO and founder of Allied Restoration. His company assists businesses with disaster restoration, including COVID-19 re-openings.
“Consumers are looking for responsible retailers with visible safety measures, such as enhanced cleaning, the use of barriers and masks,” says Almarez. “It isn’t just about saying you’re keeping your store clean. It’s vital to show that you’re keeping your store clean. For instance, having employees actively cleaning and sanitizing signals to customers that your establishment is a safe place to shop.”
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