There’s a Wider Gap Between Big Spenders and Penny Pinchers

Between a fluctuating unemployment rate, irregular spending patterns and a cultural shift from COVID-19, we’ve seen a much wider gap form between heavy spenders and those looking to save. This is largely attributed to the unexpected nature of COVID-19 and all the events that followed it, leading many consumers to reflect on their spending habits.

Prior to the pandemic, there was a larger pool of those looking to spend, but since, some have had to make adjustments. This wealth disparity has led to a need for further segmentation of retail audiences, forcing retailers to adapt accordingly.

Retail Supply Chain

From face masks to paper towels and disinfectant wipes – you can’t argue that we saw a massive surge in demand for certain products. With this, most only considered the impact this may have on the manufacturing side of things, but few looked at the logistics of it all.

Professional freight carriers had to rethink their supply chain to accommodate this almost-sudden rise in demand for just certain products. The process of coordinating with manufactures, to finding more efficient routes to match the rises in cost. Just as they did with the rise in the frozen supply chain, freight companies had to leverage new tech to project and plan given outcomes that yielded maximum results.

Huge Threats to Luxury Brands

With a sharp decrease in buying power among the average consumer, fewer people have the resources to splurge on the ‘unnecessary’. As a result, lower-tier luxury brands have made the switch to a more inclusive position to accommodate this dip in buying power, whereas top-tier luxury brands are doubling down. In time, this could mean gradual price increases to supplement the lack of volume in sales they’re seeing.

However, this could create a new opportunity for smaller brands to break into the low-tier luxury space. Only time will tell how the world adapts to the economical ramifications of COVID-19.

Brands Are Still Focusing on Customers Experience… From A Distance

For retail brands, the products they offer only make up so much of their true value. In fact, it’s a lot less than most people realize. People shop from retailers for the experience – and if they can’t capture that essence in person, brands have decided to shift to more socially distanced measures.

Live Video is allowing brands to take their customers ‘behind the scenes’ for a more intimate experience. Augmented Reality is allowing brands to improve engagement, taking customer loyalty to the next level. More emphasis on eCommerce to compensate for their lack of in-store foot traffic.

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Store closings and a change in spending behavior have forced many retailers to furlough employees or even permanently close their doors. These changes are causing substantial economic impacts on communities and individuals when just a few short months ago many of these areas were thriving. These hardships will be felt for some time to come and continue to impact the retail sector.

While the crisis has substantially impacted in-person shopping, retailers have looked for creative ways to maintain a safe approach to providing goods and services to their customers. Many big and small retailers set up delivery options as well as curbside pick-up. Consumer behavior has also shifted to online avenues. Brands with an online presence are seeing a way to survive and even thrive during these uncertain times. Retailers that were positioned well before the pandemic are likely to be stronger after the pandemic. Those who were teetering prior to are likely feeling the devastation. The retail landscape could see a real shift between the winners and losers.

As retailers look for ways to adapt to the post COVID world, focusing on meshing your online and offline efforts will be key to survival. For the consumer, having your online offers match what is being sold in your offline store will be crucial. For the retailer, planning and executing inventory from distributors will be the challenge. Those companies that can find that balance will have a leg up in the post COVID landscape.

Safety, trust, and convenience will be areas that can not be overlooked. While many people are seeing the gradual opening up of business and retail stores as light at the end of the tunnel there are still many people who will still be apprehensive about venturing out. The safety of your employees and customers will need to continue to be a top priority. While people want to get out and shop and have social interaction, what that looks like instore has likely changed forever. Social distancing and limiting the number of people that can be in the store are likely here to stay.

As part of the safety and trust factor, how customers and employees interact with one another has seen a shift during the pandemic. Dividers or shields have been implemented at many retailers to keep employees and shoppers at a distance. This practice is likely to continue and evolve even more as retailers open back up. Contactless pay options have been around for a few years, however, brands will likely continue to evolve this technology and need to incorporate apps to their in-store experience.

While recent years have seen store pick up options accelerate and more and more companies providing this option, post-COVID 19 is only going to drive this retail option. The definition of shopping and going to a store is seeing a shift. No longer are stores going to be seen as a place to shop, it will be seen as a place to retrieve your products. Companies positioned to provide curbside pick up will likely see the benefits in revenue.

As measures are continued to be lifted, luring customers back will be of top priority for retailers. Safety and convenience will be key factors in getting people back in your store. However, another aspect that should be overlooked is discounts and incentives such as buy one get one free to drive customers to your brand. The quarantine and the stay at home orders have impacted many people financially. People are hesitant to spend money on non-essential items. Retailers could benefit from a creative strategy for sales and discounts to entice customers.

Communication is key, whether it is reaching your past customer or attracting new customers. Update your websites if you have one, send out emails, advertise through social media, tv, radio, newspaper, or any other avenue to make sure your message is out there and let people know you are open and ready for business. Also, be sure to tell your customers you are following all the local and state guidelines to open and that you are also taking the precautions needed to ensure everyone is safe and prevent further spread of the virus.

Many retailers will be looking for that one thing that puts them ahead of the rest as things begin to open back up. Providing extraordinary customer service could be a secret weapon. Bridging the gap between just an ordinary experience to an extraordinary shopping experience could be the piece of the puzzle that entices a past customer to return or creates the exact experience that the new customer was looking for. Creating that culture from within your organizations and then transferring that to the customer experience will create a winning customer experience.

With the shift to online shopping during the recent months and with things beginning to return to a new “normal” the retail landscape has been forever changed and how companies respond to this change will be crucial in coming out of this pandemic. Make sure as a retail company you are adapting and changing to meet the ever-changing needs of the consumer.

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