There is no doubt that 2020 is the year which accelerated the high street retail business' thoughts around their brick-and-mortar stores position in the commerce chain.
According to world-renowned management consultancy McKinsey & Co's predictions, an 8-13% decline in offline retail sales is in store for Europe in 2021, while the US can expect to see a drop of 22-27% versus 2019 levels.
Before Covid-19 became part of our lives, some businesses had already begun using their stores for click-and-collect, as fulfilment centres or re-imaging the way consumers interact with the store in person and making it more of an experiential journey, but for many, their brick-and-mortar stores were still the main source of revenue and the core of their businesses. To this end, many businesses were caught viewing their stores as a separate revenue stream to their e-commerce activities.
Instead of viewing their stores' position simply as, 'how much product is sold inside the store', many retailers are now beginning to consider what other roles brick-and-mortar stores can play, and how this can be translated into an effective ROI.
Could this be simply extensions of their fulfilment centre offering to enhance the speed of delivery in the way Amazon may be viewing it, with their current focus on acquiring shopping malls and failed brick-and-mortar retail stores? Other US retail giants Kohl's, Target & Best Buy certainly appear to agree as they also look to streamline the last mile for their online consumers by using their brick-and-mortar stores to deliver. With delivery costs squeezing margins for retailers, it certainly appears a logical way to reduce these costs and improve bottom line.
Others are considering the idea of stores as a more fluid concept and utilising pop-up stores to keep up with the demand for rapid change from consumers. One mall in Shanghai for instance reportedly rotates the stores every 3 months as a way to keep consumers interest and to keep up with changing demands.
Alongside this, consumers appetite for something 'different' also plays it's part. For example, many consumers are no longer satisfied in going out and having a nice meal. Instead seeking an experience such as dining in the dark, a circus performance around whilst diners eat and so on. Retailers are also looking at ways to make the in-store visit more of an experience.
One thing is for certain, 2020 is the year where remaining retailers accelerated their consideration for the place of brick-and-mortar alongside the growing importance of there online sales presence. The landscape has changed forever, and it will be exciting to see how different businesses utilise brick-and-mortar in the future.