Strategy Sessions: Retail Shifts in the Pandemic Economy and Beyond
By: Vanessa McGrady
The COVID-19 pandemic upended nearly every business and institution, perhaps most dramatically the retail industry. Gone are the days of an impromptu stop into a crowded shop to purchase a new, eye-catching shirt—at least for now.
Research from business consulting firm McKinsey & Company shows that consumer behavior has shifted in several ways, especially when it comes to brand loyalty.
“The crisis has prompted a surge of new activities, with an astonishing 75 percent of U.S. consumers trying a new shopping behavior in response to economic pressures, store closings and changing priorities," the company's report states.
It adds that:
- Thirty-six percent of consumers are more open to trying a new product
- Seventy-three percent will stay open to trying new brands
- Gen Z and high earners are the most likely demographic groups to switch brands
- Large trusted brands are seeing 50 percent growth
- Private labels (manufactured by other companies but sold under a brand name) have outpaced the retail market, and 80 percent of consumers say they will continue to use these brands after the pandemic
So while those early spring weeks were about navigating a new normal, today's businesses need to figure out how to stay relevant and thrive.
Building Resiliency Into Your Business
Chicago-based retail veteran Tina Zysk is the founder of Grace + Ivory, a virtual wedding gown boutique that offers brides a modern, efficient way to try and buy their customizable, made-to-order dresses. Fortunately, the ability to sell online was built into the brand's DNA, and only required some shifting to become pandemic-proof.
“I founded Grace + Ivory with intent that we would provide a different online shopping experience for brides," Zysk says. “We built out our try-at-home program last year, and fully released it at the beginning of this year, before COVID. It turned out to be something that was beneficial for brides shopping during the pandemic."
There were, of course, pivot points and postponements of weddings (though those eloping still wanted dresses just not immediately). The pop-up shop events—responsible for closing many of the sales as brides could see and feel the dresses up close—were scaled way back. The try-at-home feature was originally free, but now there's a small fee that can be applied to the purchase.
Customers also needed to adjust, Zysk says. Shopping for a wedding dress is traditionally a celebratory occasion that often includes relatives, friends and lots of champagne in the showroom. But whether they wanted to or not, brides-to-be have had to move the try-on party to their own homes—where everyone is safer, she notes. And for millennial women and Gen Z digital natives, the new way to shop might be just fine.
Zysk says she she's seen a generational digital pivot, with boomers and Gen-X shopping for their millennial daughters.
Zysk, who's run many brick-and-mortar retail operations and has also worked as a pricing analyst, says there are certain strategies all retailers—regardless of what they're selling— should be adapting to keep afloat and stand out from the competition.
1. Prioritize sensitivity to COVID fears.
The retailers that will do well to earn customer trust are ones that are clearly playing it safe and approaching their strategies from the method of reducing risk. “Trust and that emotional pull are hard to quantify," Zysk says. So that means making visible efforts to keep customers safely distanced, masked and having processes in place to minimize the passing of germs, such as cashless transactions and curbside pickup.
2. Shift your marketing and platform to digital.
Zysk suggests taking time to understand who your customers are now and what they need. How has the situation impacted their access to your products and how can you make it easier for them to get it?
Even if it feels time-consuming to upgrade your website to an e-commerce site and to invest in social media and other marketing methods, it will be worth it in the long run if you're connecting with the right customers in the right way. “Of course, not every option will work for every business, but figure out two or three options that work for your product and focusing on those," Zysk recommends.
3. Ramp up training for a better customer and employee experience.
Some employees, unfortunately, may no longer be needed on a sales floor for a business that moves exclusively to online sales. But perhaps you can train them in another process, such as packing and shipping orders. Not only does this help keep employees working for you, but it also contributes to their professional development. “It's going to be an initial push to invest and train your employees to make that shift," she Zysk.
Another especially important aspect of training, now more than ever before, is de-escalation and creating processes around customers who might refuse to wear a mask or follow new protocols. “It's making sure that people feel heard, and that the customer experience is adjusted as we are all going through a hard time right now," Zysk says.
Finally, Zysk adds, it's sometimes hard to remember that we're all in this together, and that supporting socially conscious businesses actually have a ripple effect when their profits fund charities. “Grace + Ivory is a social enterprise, and so a portion of every bridal purchase or dress purchase goes to programs helping women and girls," she says.
One thing that hasn't changed in Zysk's universe is that people still want to get married. “COVID hasn't stopped love, that's for sure."
Vanessa McGrady is an award-winning journalist, social media strategist and communications professional. But wait, there’s more! She’s also been a playwright, actor, producer and voice-over artist. She can sing “Home on the Range” in Yiddish, which is apropos of nothing.
She is the author of Rock Needs River, a memoir.