Elements to consider when thinking about the physical Store post Covid-19

Each time when the government were due to make a speech about the lockdown situation, I was glued to the TV, looking for potential answers about the future. What it means for me as an individual, companies and the society. As a consumer, it was inevitable not to think about what might happen to the bricks and mortar stores once the lockdown eases and what will happen to the role of high streets.

The debate about the role of high street stores is not a new thing. There has been a massive decline of store openings vs closure over the last decade. PWC estimated that in early part of 2019, there were 1234 more store closures than opening in British high street [1]. The numbers of closure are expected climb after the Covid-19 lockdown.

One of the biggest challenge that many physical stores will face post lockdown will be around how to balance the cash flow against profitability, safety needs and operating costs while serving probably only half of the number of regular customers that it needs to keep themselves afloat.

There is no panacea as each problem is different and each business is unique. For now, let’s take a step back, understand the what are the driving changes in the bricks and mortar landscape.

Changes in the store visits behaviours

1. Consumer Shift towards a Transactional mind-set

   It may sound like an exaggeration to say we are preparing for a war, but it feels like it. During the lockdown, only key stores such as supermarkets, pharmacies and takeaway stores were allowed to remain open (in UK, even fast food chains like McDonalds and KFC were also shut). Applying “Maslow’s Hierarchy of Needs” [2] we have literally fallen back to the bases of the pyramid towards satisfying The ‘Physiological needs’. In another words, in the last few weeks, we were focused on our survival needs. This forces us to re-evaluate our behaviours, needs and priorities.

2. Prioritise the Health and Safety of Staff and Customers

   For many, a visit to the stores now automatically means shielding themselves with a mask, gloves and being vigilant about keeping 2 meters of social distancing between themselves and others. We even get upset when that space is invaded. Retailers help this by limiting the numbers of people inside the store and allowing only one person to shop for the entire family. All of our previous expectations ie. Social elements and seamless experiences for visiting a store are now thrown out of the window, people are now willing to accept changes to ensure they are protected and safe. And indeed, are likely only to visit stores where they do feel safe.

3. Engaging in the different part of the Customer Journey

   Below uses a simple 3 points customer journey map to illustrate the way consumers are engaging with stores 

4. Customer Engagement Journey Map : Time of Engagement vs Location of the Store

   If we plot the location of engagement against time spent, it can be seen that prior to Covid-19, most of the customer engagement was spent inside the store. The focus was around a seamless experience by removing queues, fast payment, etc. or enriching the experience through virtual reality, digitalisation of product information and personalised service. In the post Covid-19 days, customers are now willing to accept one-in-one-out type of queuing system meaning spending more time outside the store. Although it depends on the store type as some tasks can’t get shorten inside the store but in certain stores, i.e. supermarkets, customers are bringing a list, visiting less but stocking up more. It isn’t that customers are not engaging with the retailers but they are just now engaged in a different location. 

5. Consumer’s ROI of Time vs Motivation

   With all the changes, customers will become more selective on which retailer they want to spent their time with. They will be asking themselves, which stores to visit and how much time is considered reasonable to spend in the store? For none essential retailers e.g. a fast fashion apparel retailer, how to motivate customers to go into their store? A friend of mine recently wanted to buy some items for her garden. Unable to find it online, she decided to visit a DIY store. Having to drive to the store, then queue, she managed to get into the store only to find 3 out of 5 items. She invested over 1.5 hour of her time and felt her investment was not rewarded. She got angry and vowed to never go back to any stores in the near future. Imagine, this is just one store, what if a customer needs to go to multiple stores?

Consumer Shift towards a Transactional mind-set

It may sound like an exaggeration to say we are preparing for a war, but it feels like it. During the lockdown, only key stores such as supermarkets, pharmacies and takeaway stores were allowed to remain open (in UK, even fast food chains like McDonalds and KFC were also shut). Applying “Maslow’s Hierarchy of Needs” [2] we have literally fallen back to the bases of the pyramid towards satisfying The ‘Physiological needs’. In another words, in the last few weeks, we were focused on our survival needs. This forces us to re-evaluate our behaviours, needs and priorities.

Prioritise the Health and Safety of Staff and Customers

For many, a visit to the stores now automatically means shielding themselves with a mask, gloves and being vigilant about keeping 2 meters of social distancing between themselves and others. We even get upset when that space is invaded. Retailers help this by limiting the numbers of people inside the store and allowing only one person to shop for the entire family. All of our previous expectations ie. Social elements and seamless experiences for visiting a store are now thrown out of the window, people are now willing to accept changes to ensure they are protected and safe. And indeed, are likely only to visit stores where they do feel safe.

Engaging in the different part of the Customer Journey

Below uses a simple 3 points customer journey map to illustrate the way consumers are engaging with stores 

Customer Engagement Journey Map : Time of Engagement vs Location of the Store

If we plot the location of engagement against time spent, it can be seen that prior to Covid-19, most of the customer engagement was spent inside the store. The focus was around a seamless experience by removing queues, fast payment, etc. or enriching the experience through virtual reality, digitalisation of product information and personalised service. In the post Covid-19 days, customers are now willing to accept one-in-one-out type of queuing system meaning spending more time outside the store. Although it depends on the store type as some tasks can’t get shorten inside the store but in certain stores, i.e. supermarkets, customers are bringing a list, visiting less but stocking up more. It isn’t that customers are not engaging with the retailers but they are just now engaged in a different location. 

Consumer’s ROI of Time vs Motivation

With all the changes, customers will become more selective on which retailer they want to spent their time with. They will be asking themselves, which stores to visit and how much time is considered reasonable to spend in the store? For none essential retailers e.g. a fast fashion apparel retailer, how to motivate customers to go into their store? A friend of mine recently wanted to buy some items for her garden. Unable to find it online, she decided to visit a DIY store. Having to drive to the store, then queue, she managed to get into the store only to find 3 out of 5 items. She invested over 1.5 hour of her time and felt her investment was not rewarded. She got angry and vowed to never go back to any stores in the near future. Imagine, this is just one store, what if a customer needs to go to multiple stores?

How reframe the challenge and find opportunities?

1. Comfort and Security is the Key to Connect with Customers

   Without doubt, stores must have a clear Covid-19 counter measures to help drive customers back to the store. Customer wants assurance and is looking for signs of effort. It can be as simple as looking at limiting number, provide transparency through one-way flow and distance marking on the floor. In Austria, supermarkets are requesting all visitors and staffs to wear a mask but also providing them to visitors [3]. Another potential measure could provide customers with information to help make decision and monitor their own safety such as having visibility of the number of people in store and aisles in real time.

2. Focus on the Uniqueness of the Physical Experience

   During the lockdown, I had a chance to visit a virtual museum. The concept was simple, a replication of the museum experience but online. Just a few minute into our tour, I got bored and couldn’t engage anymore. Fuelled with small technical glitches, I just gave up in no time.

   My lack of enthusiasm reminded me of an Art Critics course that I had completed many years ago. I remembered my professor emphasised that you can read all the online websites and books about a piece of artwork but you can never compare the experience of seeing it physically with your own eyes. Your critical perception is heavily influenced by the sound, smell, the space, the size you are in. It is only through physical inspection you will be able to pick up the texture of the brush strokes or feel the materials of the artwork. The above reasons are also what makes the physical stores unique. The touch of the material, the weight of the objects, the scent and the emotion the space creates are all the elements that affects the customer experience. To motivate people back into the store, we need to rethink carefully about the elements that makes each environment unique.

3. Time well spent

   With consumer motivation low on visiting stores, it means retailers needs to make sure each minute the customer spent inside store is worthy of the customers’ time. For example, stores could consider using technologies to ensure stock availability before entering the queue to avoid disappointment. Furthermore, with many stores having less footfalls, retailer must find higher conversion rate through personalised, value-added services. The business model may differ but luxury brand is no stranger to working with lower footfall rate but highly personalised services. For example, Burberry uses technology such as magic mirror, tablets to help improve the personalisation services. Worthy to consider how they are utilising their spaces and resources.

4. Refocusing the Customer Journey

   The engagement location for customers is now shifting towards the before entering the store. Queues might become a norm. It means stores may need to manage ‘time’ differently than before while resources outside the store may now be required. For example, Livraria Lello is a bookshop in Porto. It is said to be one of the most beautiful bookstores in the world with J.K Rowling taking inspiration from it for Harry Potter. To limit the amount of tourists visiting, the bookshop uses a ticketing system to enter the store.

5. Escapism in the local

   With many countries around the world closing their boarders plus mandating a 14 day quarantine for visitors, it is no wonder the airline and holiday industry is one of the hardest hit industries during this crisis. Scepticism is also high for using public transportation which means consumers would be now be looking to engage and spent time locally to make up for that memorable experience that they can’t seek elsewhere. There is more of a need now than ever before for bricks and mortar stores to build a deeper connection with their customers.

Comfort and Security is the Key to Connect with Customers

Without doubt, stores must have a clear Covid-19 counter measures to help drive customers back to the store. Customer wants assurance and is looking for signs of effort. It can be as simple as looking at limiting number, provide transparency through one-way flow and distance marking on the floor. In Austria, supermarkets are requesting all visitors and staffs to wear a mask but also providing them to visitors [3]. Another potential measure could provide customers with information to help make decision and monitor their own safety such as having visibility of the number of people in store and aisles in real time.

Focus on the Uniqueness of the Physical Experience

During the lockdown, I had a chance to visit a virtual museum. The concept was simple, a replication of the museum experience but online. Just a few minute into our tour, I got bored and couldn’t engage anymore. Fuelled with small technical glitches, I just gave up in no time.

My lack of enthusiasm reminded me of an Art Critics course that I had completed many years ago. I remembered my professor emphasised that you can read all the online websites and books about a piece of artwork but you can never compare the experience of seeing it physically with your own eyes. Your critical perception is heavily influenced by the sound, smell, the space, the size you are in. It is only through physical inspection you will be able to pick up the texture of the brush strokes or feel the materials of the artwork. The above reasons are also what makes the physical stores unique. The touch of the material, the weight of the objects, the scent and the emotion the space creates are all the elements that affects the customer experience. To motivate people back into the store, we need to rethink carefully about the elements that makes each environment unique.

Time well spent

With consumer motivation low on visiting stores, it means retailers needs to make sure each minute the customer spent inside store is worthy of the customers’ time. For example, stores could consider using technologies to ensure stock availability before entering the queue to avoid disappointment. Furthermore, with many stores having less footfalls, retailer must find higher conversion rate through personalised, value-added services. The business model may differ but luxury brand is no stranger to working with lower footfall rate but highly personalised services. For example, Burberry uses technology such as magic mirror, tablets to help improve the personalisation services. Worthy to consider how they are utilising their spaces and resources.

Refocusing the Customer Journey

The engagement location for customers is now shifting towards the before entering the store. Queues might become a norm. It means stores may need to manage ‘time’ differently than before while resources outside the store may now be required. For example, Livraria Lello is a bookshop in Porto. It is said to be one of the most beautiful bookstores in the world with J.K Rowling taking inspiration from it for Harry Potter. To limit the amount of tourists visiting, the bookshop uses a ticketing system to enter the store.

Escapism in the local

With many countries around the world closing their boarders plus mandating a 14 day quarantine for visitors, it is no wonder the airline and holiday industry is one of the hardest hit industries during this crisis. Scepticism is also high for using public transportation which means consumers would be now be looking to engage and spent time locally to make up for that memorable experience that they can’t seek elsewhere. There is more of a need now than ever before for bricks and mortar stores to build a deeper connection with their customers.

Look Wider and deeper

With so much volatility in the market right now, physical stores need to look broader and deeper for that opportunity. To move forward retailers will need to rearrange their spaces and re-align their resources to help connect, build trust and motivate the customers to visit the stores again. This shift may re-define the definition of the modern customer needs, focus on meeting the basic requirements will be fundamental to the customer journey and motivation to visit stores.

[1] https://www.pwc.co.uk/industries/retail-consumer/insights/store-openings-and-closures.html

[2] https://en.wikipedia.org/wiki/Maslow%27s_hierarchy_of_needs

[3] https://www.bbc.co.uk/news/world-europe-52143873