As communities around the world emerge from their pandemic-induced cocoons, a number of trends are starting to emerge that will shape the retail landscape in the months and years to come.
he pace of change in the industry is unrelenting and progressive Irish retailers are continually realigning their business models to meet evolving consumer demands and preferences. How Irish retailers adapt to the following five trends will determine their long-term sustainability.
Localism in action:
The increase in remote working practices has resulted in increased footfall in regional cities and suburbs. We are all more aware that local shopping is an intrinsic part of sustaining local community. Retail stores are essential to the revitalization of urban sites, helping to stimulate local economies and social inclusion. A balanced and progressive trade strategy must be at the heart of any regional revitalization program. This strategy should support local retailers while ensuring that national footfall brands are encouraged to maintain a regional footprint.
Phygital is here to stay:
Many retailers now recognize that their online platform is the “gateway” to their store. Greater cohesion between the network of physical stores and the online platform is now imperative. The physical store will need to evolve to be both a showcase for the brand and an efficient micro-fulfillment hub, facilitating improved click-and-collect offers, faster home delivery, and profitable product returns. The regional / “local” store has a key role to play in this regard.
The skills required in the retail environment are changing rapidly.
Retailers need to actively invest in staff development in areas such as data analytics, online execution and supply chain management to reflect this evolving market. Creating a structured development path for employees will ensure retention of the best people. Investing in people and technology is imperative to ensure top-notch customer service.
Specialty stores :
In a world of unprecedented choice, consumers are now returning to specialty stores for expert, quality advice across a variety of categories.
The consumer wants to have fun but is also aware of the ethics of production, provenance and transparency of the supply chain. Retailers able to provide bespoke and personalized products and services will create brand ambassadors and, most importantly, loyal customers willing to pay more regularly. In a competitive market, standing out, not integrating, will promote longevity.
Rethinking the city-center approach:
As “localism” flourishes, the future of the downtown store is now in question. Psychologists tell us that we are, at the base, “social beings”. We will again be packing venues to support our favorite sports teams or listen to our favorite bands, when we could easily do the same from the comfort of our couch. Why? Because we value and appreciate the human interaction and the overall experience that these events offer.
A trip to the city center will continue to provide an escape from our busy lives and an experience that online shopping cannot duplicate: see, smell, try and test products, touch them, speak with knowledgeable sales staff. , interact with other people in the store. Retailers will need to reconsider the direction and reconfigure their downtown stores. They will become showcases for their brand – with less stock but a more interactive proposition, focused on advice and entertainment for the customer. Many commentators have said Covid-19 will spell the end of brick and mortar retail. Post-containment sales data from Ireland and around the world suggests it was a premature obituary.
While Covid-19 has certainly accelerated the digital transformation of the industry, physical stores remain an integral part of its continued success. Covid-19 lockdowns have deprived companies around the world of social interaction, while revealing how physical retail can meet this basic need.
This new awakening is something retail businesses must react to now; stores are a social space that can energize and revitalize society. By supporting local retailers in the coming months, we will strengthen the foundations of vibrant local communities. May this be our response and our legacy to Covid-19.
Owen Clifford is the Retail Sector Manager at Bank of IIreland