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Change is nothing new for retail, but over the last several weeks, it has come even more rapidly and taken the form of staff reductions, closures, quick transitions to curbside pickup, and more, all because of the COVID-19 outbreak. 2020 has brought us situations that neither consumers nor brands have ever seen, with the only close comparison being the 2008 financial crisis. Retailers have had to fly with their eyes closed and pivot quickly to serve customers. Unfortunately, there isn’t a guide on best practices as no one knows what will work and what the near-future holds.
“Retailers will need to make operational changes to ease shoppers’ lingering concerns linked to the crisis,” Ann Gersna from ICF Next said. “Retailers will most likely continue to be judged on their cleanliness; safety equipment; method of sanitizing and stocking; communications regarding safety measures; and new technologies like contactless payments, curbside payments, or BOPIS (buy online, pick up in-store) options that don’t involve direct interaction with a store worker.”
For some retailers, there have been permanent closures. According to an article on MoneyWise, brands such as Pier 1 Imports are closing half of its 900+ stores and filing for Chapter 11 bankruptcy protection. Additionally, GameStop is closing stores that have multiple locations close to one another. There aren’t only stores closing but also changing the way they interact with the consumer.
"The biggest shift Jebbit is witnessing in our clients' response to COVID-19 is the move away from transactional messages to focus on experiences that engage and provide genuine value to the consumer said Pam Erlichman, CMO of Jebbit. Experiences such as personality quizzes, trivia, knowledge tests, and voting are all great examples of fun ways to stay top of mind while also capturing an important data point or two in order to be more relevant to their needs."
Stores that have had to close temporarily or changing the way they interact with consumers, are rethinking plans and still have a great deal of uncertainty around what their next move may be – from marketing, to reopen and, most importantly, keeping customers and employees safe.
“I think it’s important for retailers to do everything they can to ensure both their employees and their customers feel safe in the store,” Clay Walton-House said, managing director of integrated loyalty solutions at PK. “While everyone is eager to open their doors and give their employees a chance to get back to work, I think brands are being very thoughtful and deliberate with their plans, balancing business needs with the advice they are getting from experts.”
Stores that are reopening need to worry about restrictions, which are different for each state and the logistics of having various limits on customer numbers and new safety guidelines are obstacles that brands will need to get used to until life gets back to normal. CNBC released an article that breaks down the restrictions per state, seen here. However, many states have yet to announce plans for reopening as the Coronavirus is still prevalent in communities nationwide.
One state that drew criticism for its reopening plan was Georgia, where Governor Brian Kemp allowed businesses to reopen April 24, including gyms, hair salons, and bowling alleys where social distancing measures would be tough to uphold.
“There's still a lot up in the air that could further change the trajectory of 2020, but what's certain is that brands will continue needing to differentiate and their loyalty programs will play a huge role in that,” Tom Caporaso, CEO at Clarus Commerce, said. “In the near term, transactional benefits like free shipping and discounts, especially instant ones, will help draw in consumers, but experiential benefits will help bring back and retain existing members over the long run as physical stores start to reopen.”
Even with reopening plans being unknown, multiple stores and malls have announced or had plans about opening leaked. Macy’s had a memo leak that they were going to reopen 68 stores Monday, May 4, while Simon Property Group, the biggest mall operator in the United States, is planning to reopen 49 malls in 10 states where stay-at-home orders are expected to be eased.
"Until a COVID-19 vaccine is available, most consumers will likely continue to practice social distancing and continue to rely on online channels to transact even after stores re-open,” loyalty experts from Comarch said. “The two biggest challenges will be to give consumers the confidence that the retail stores are taking all possible measures to keep their staff and customers safe and to rebuild loyalty despite new brand preferences. For retailers with loyalty programs, they will need to generate new ways to reward their members for both transactional as well as non-transactional actions and pave quicker paths to move from one tier to another. This is especially key to re-engage existing customers."
The amount brands can respond to this pandemic is heavily dependent on the way customers stay loyal to those same brands, as Walton-House from PK says.
“Customer loyalty has played a large role in helping retailers keep the lights on during the pandemic,” he said. “Customers who have established relationships and habits with their favorite brands naturally gravitate to them first when they shop – and brands, in turn, have used loyalty to differentiate the customer experience and provide increased communications to reassure and engage their members.”
With so much unknown, different guidelines in place for different businesses, and various restrictions from state to state, it will be interesting to see how retailers best manage reopening to ensure businesses stay open, but also meet customer expectations, keep strong connections with customers, and overall, ensure safety for guests and employees.
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