Retail is having a Darwin moment. Businesses that can adapt to the realities of COVID-19 are doing so quickly while those that can’t are dying out—which probably needed to happen. The result will be a healthier Main Street that can better compete with online natives and offers better services for consumers.
Even before the pandemic, retail was evolving fast, and the old guard was struggling to keep up. Over the past two years, giants such as Walmart, Amazon, and Target consistently rolled out shorter delivery times, bigger inventories, and lower prices, while D2C brands such as Warby Parker and Everlane built modern physical interiors that made older stores look unappealing. Meanwhile, restaurants were being pressured by DoorDash and Uber Eats to find new ways to serve customers.
As a facilities management leader, I have seen the pandemic increase these pressures and force malls, retailers, and restaurants to evolve in ways they needed to to survive for the long haul. That’s meant providing better online services along with curbside pickup, patio dining, and cleaner interiors—things customers would appreciate in any environment. In short, the pandemic is cleaning out the old stock and forcing everyone else to transform in ways that will endure long after the crisis has passed.
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Malls, for instance, were already in decline as mainstays such as JCPenney, Lord & Taylor, and Brooks Brothers struggled to attract a younger clientele and fell into bankruptcy. The pandemic has opened the door for more modern brands such as Bonobos and AllBirds to take advantage of cheaper leases and move into those spaces. Some malls are even working with Amazon to install high-tech grocery stores and distribution centers, turning what was once a threat to physical retail into a partner in its survival.
For sure, some retailers have been hit hard, with at least 26 brands going under this year. But many are combining online and offline in creative ways, such as virtual fitting rooms and augmented reality apps that let you try before you buy. Touchless checkout is becoming more widespread. Even luxury brands such as Jimmy Choo have pivoted to offer video consulting and high-end delivery. Grocery giant Kroger is launching a huge online marketplace that will sell 50,000 products, including many new to Kroger, such as toys and housewares. These changes are positive and will help retailers compete better for years to come.
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Restaurants have also upped their game with outdoor dining, more ways to order online, and new partnerships. Chipotle teamed up with Uber Eats and grew its digital sales 103% in March. Jack in the Box is going “all in” on the cloud to build new online services and adapt its menus based on social sentiment. Taco Bell launched a new mobile app and a “double drive-through” model to serve people faster. And sales from “ghost kitchens,” which provide a low-cost model for restaurants to prepare food for delivery, are projected to climb 25% each year for the next 5 years. These are long-term improvements.
The pandemic has also forced brands to up their game in cleanliness and hygiene. Stores and restaurants have never been as clean as they are now as businesses look to reassure customers that they’re safe places to visit. Even air quality is improving, because businesses are upgrading their HVAC systems to ensure proper filtration against the virus. These changes make for cleaner, brighter, more appealing interiors.
City centers are also transforming. Sky-high rents in New York City have made longtime chains leave town, forcing down prices and making way for newer brands. This urban face-lift has been a long time coming and should revitalize areas such as Fifth Avenue and Soho.
This is a dynamic time in which brick-and-mortar businesses are pivoting like mad to ensure customers have convenient ways to shop and eat and to provide safe and attractive interiors. The upshot will be a healthier retail market in the long term with better options for us all.
Tom Buiocchi is CEO of ServiceChannel, a cloud-based facilities management platform.
