We conclude our three part exploration into our future relationship with retail and how do we navigate this “new Normal”.
Stores And Malls Will Need To Rethink Existing Spaces
Before the pandemic the US had the most retail square footage per capita in the world, but now with more people shopping online, retailers don’t need such an abundance of store space. Walmart have created automated fulfilment centers in some of their larger outlets, while in the UK both John Lewis and Marks and Spencer announced plans to downsize their flagship Oxford Street stores and convert entire floors into office space. It’s likely that other large retailers will follow suit, either entering partnerships to share space with other brands or local businesses, selling off space, or finding other uses for it, concentrating on tech-enabled service and online ordering, rather than having huge amounts of stock on site.
As stores like Macy’s and Sephora steer away from new mall openings and test stand-alone stores instead it seems like malls will also have to find new purpose.1 Their future again is likely to be mixed use, with office space, gyms, warehouse space, entertainment venues and more. Who knows, in the future maybe that ugly out-of-town mall will devote some of its space to becoming a market garden.
Local Produce, Digital Fashion and Re-use Goes Mainstream
It’s not just local neighbourhoods that will see an increased focus but local products too, driven by ethical and environmental considerations but also perhaps by practicality. After years of globalization, the world has been experiencing a supply chain crisis caused by an endless list of problems: Covid, trade tensions between the US and China, the Suez Canal blockage, rising shipping costs, a shortage of truck drivers, and in the UK’s case, Brexit.
Some may scoff but digital fashion is another growing area, giving brands an opportunity to interact with customers at home who can show off their items online. Balenciaga have created digital fashion for Fortnite.2 Farfetch are gifting influencers in digital garments from pre-order collections, saving on shipping costs and gauging interest before investing in stock.3
The impact of consumption on the environment is increasingly on consumers’ minds, and It’s likely that resale options will move further into the spotlight. IKEA are already offering a buy-back service, finding new owners for resale goods in their ‘bargain corner’, while the original owner gets an agreed value loaded to a card they can spend in the store.4 FarFetch and Zelando have also added pre-owned sections to their online businesses.
Conclusion: New Opportunities For Retail In A Time Of Change
All the above paints a complex picture. Change is happening in every aspect of the retail landscape. Consumers and retailers will need to get adjust to the ‘new normal’: where online shopping is an efficient way of meeting needs, but physical shopping is a treat, where we shop locally but the big platforms become bigger, where retailers need to build their operations on agile technology platforms that connect every aspect of their business from inventory to marketing.
It’s been a strange and worrying time, but now more than ever there is a chance to make changes that not only keep online and physical retailers afloat, and consumers supplied but that create a low-carbon future that protects the planet. Yesterday and today has brought much turmoil, but there’s no reason we can’t be optimistic about tomorrow.
- Labour To Scrap Business Rates and Replace With A Fairer System, Labour, https://labour.org.uk/press/labour-to-scrap-business-rates-and-replace-with-fairer-system/
- High Digital Fashion Drops Into Fortnite With Balenciaga, Epic Games, https://www.epicgames.com/fortnite/en-US/news/high-digital-fashion-drops-into-fortnite-with-balenciaga
- Vogue Business, Influencers Are Wearing Digital Versions of Physical Clothes Now, https://www.voguebusiness.com/technology/influencers-are-wearing-digital-versions-of-physical-clothes-now
- A Circular Economy Starts With A BILLY Bookcase…Or INGO Table, Or NORRARYD Chair, Ikea, https://www.ikea.com/gb/en/this-is-ikea/sustainable-everyday/buy-back-and-resell-service-pubcc071810