The Centers for Disease Control and Prevention (CDC) recently reported that roughly one in every six U.S. adults have been fully vaccinated for COVID-19. We can’t help but feel elated by this news. As the light at the end of the tunnel seemingly comes into focus, we have started to envision a post-pandemic retail landscape.
Tapping into our 30+ years of industry experience, here’s what we see on the horizon:
- The Rise of “One-Stop Shops:” Big box retailers – Walmart, Target, Best Buy, Home Depot, and Lowe’s – have experienced greater growth during the pandemic. Whether customers are shopping online or in physical stores, they have been relying on “everything stores” during the pandemic and will likely continue to do so in the future. Both Walmart and Target “have attributed their [recent] success to a diverse mix of merchandise.” (source: CNBC) With Target publishing its latest favorable eCommerce results earlier this month, the future of these brands looks bright.
- The Continuation of “Casual” Environments: Consumers continue to change how and where they are shopping for apparel. With many businesses and individuals planning to extend remote workdays, consumers continue to search for “Zoom-ready styles.” Some of the most popular average monthly searches right now are: “business casuals for women,” “business casuals for men,” “athleisure,” “casual outfits,” “business casual outfits,” “business casual jeans,” “cute casual outfits,” and many other similar terms. The president of Gap Inc.’s Athleta division noted: “Customer behavior continues to evolve every day, but I think [the consumer] has gotten used to wearing comfortable clothes.” (source: CNBC). Our society was already trending towards more casual attire pre-pandemic and we believe this will become the norm.
- Category Expansion: Specifically focusing on DTC brands, many have pivoted to not only increase their products, but promote new services entirely. What began for some as using extra fabric to create masks has opened the door to new opportunities…and customers. From Summersalt introducing loungewear, to Glossier capitalizing on the popularity of beauty and self-care, to Warby Parker’s try-at-home solutions, to Hint’s special offers for new customers, DTC brands are more innovative than ever. (source: A Better Lemonade Stand, CB Insights, Big Commerce)
- Location, Location, Location: While big box retailers continue to experience success, U.S. consumers also have a heightened focus on supporting small businesses. During the pandemic, consumers began shopping at stores or brands they may not have normally or splurging on something due to loyalty or accessibility. Since many storefronts are unfortunately vacant, there are new market opportunities. Location will play a big part in the success of retailers moving forward. (source: Nielsen)
- The Future of Startups and DTC: In China’s 33% of new “golden”* stores, 71% are new entrants, i.e. those that did not operate before COVID-19, and 26% of these new stores are top performers. Paris and London have experienced similar trends. Newer brands may take over existing physical store fronts based on the success they’ve experienced online worldwide and specifically, in the U.S. *“Golden stores are the concentration, or number of stores, that account for 89% of FMCG sales in China” (source: Nielsen)
- The Future of Brand Loyalty: From new customer values, considerations of ease and comfort levels, possible relocations, brands offering different products, and so many other factors, brand loyalty will be something to watch this year and beyond. The post-pandemic consumer is different, and we are excited to determine how and where buying power is used.
