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Leuthold Group chief investment strategist Jim Paulsen discusses consumer spending and markets amid the coronavirus pandemic.
Black Friday marks the start of the holiday shopping season – but this season is unlike any previous one.
COVID-19 has sent shockwaves around the world, particularly hitting the retail sector. The disease has disrupted the way consumers shop, changing the way workers serve customers, and in many cases, has kept buyers and employees from even entering stores.
Change can be difficult and frightening, especially for retail workers whose roles have been disrupted by the pandemic. As the retail industry adapts to a “new normal” two questions remain.
First, what does the future hold for us while we wait for a vaccine?
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And second, should retail workers be prepared for even more disruption as we move through the holiday season and 2021?
With nearly a decade of experience as an executive at Nordstrom and director of marketing for two online retailers, I predict the industry will experience a second wave of change after the pandemic that will have an additional impact on daily life. retail workers.
Customers wait in a socially remote queue on Wednesday, November 18, 2020, outside the Apple Store along the Chicago River in Chicago. The accelerated surge in coronavirus cases across the United States is causing an existential crisis for U.S. retailers and businesses
COVID-19 has reversed the interactive retail model. It could be argued that the role of a retail employee in today’s environment more closely resembles that of a security guard.
With nearly a decade of experience as an executive at Nordstrom and director of marketing for two online retailers, I anticipate the industry will experience a second wave of changes after the pandemic that will have an additional impact on daily life. retail workers.
Retail workers are now responsible for enforcing the wearing of masks; ensure that the cash desks are properly cleaned; conduct workforce counts to manage crowd control; and confirm that social distancing protocols are followed.
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All of these steps are needed as COVID-19 spikes are occurring across the country, with hospitalizations in the United States hitting record highs this month.
More and more stressors facing soil workers are now more numerous than ever. Rather than wondering how to give shoppers an engaging in-store experience, retail employees and managers are probably wondering how they can just keep their stores in business while keeping everyone safe.
These fears are magnified on a day like Black Friday.
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My best advice for retail workers right now is to focus on finding a way through this difficult time, which will indeed pass, even if the light at the end of the tunnel seems miles away.
The truth is, we are all in the same boat. It is this unity that will give us the strength to weather this crisis with strength and compassion.
There are more important implications, however. If I were a retail employee, in addition to fears for my health, I would worry about what my job might look like in the post-pandemic world and how best to prepare for an uncertain future.
The pandemic has accelerated trends that were already at play in the retail industry.
As COVID-19 continues to accelerate e-commerce adoption, it will be much more difficult for retailers to attract shoppers to physical stores.
One study found that six in ten people ‘discovered new ways to shop’ during lockdown times, and nearly half (45%) of customers shop more online than before the pandemic. For this reason, physical retailers will need to create more experience for buyers, and the stakes will be higher than ever.
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Here’s what this new reality could mean for retail workers:
More expertise needed
Rather than just directing shoppers through stores or pulling the right size out of the back room, retail employees will spend more time providing personalized advice and expert product knowledge to shoppers.
Apple’s in-store experience is a great early example of this type of model, where employees frequently provide product training and conduct technology learning sessions that buyers can participate in. To create this more insightful shopping experience, retailers from all walks of life will need to upgrade the skills of their staff through increased training and education sessions.
New store layouts
The retail footprint is shrinking and store sizes will likely continue to shrink. With improved supply chains and a greater emphasis on the shopping experience, it will be less critical for retailers to physically keep all inventory in store.
Customers are likely to frequent the physical locations to receive advice from floor staff and a tactile experience that they can’t get online – when their actual purchases can be shipped right to their homes.
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Post-pandemic stores could also look more like showrooms, rather than rooms filled with inventory. Floor workers may see their roles shift to organizing classes, leading demonstrations or supervising virtual tracks.
Longer employee tenure and higher salaries
With smaller stores and a shrinking retail footprint, retailers will likely be forced to downsize even further to accommodate this new, more experiential retail model.
Although the industry is known for its high staff turnover rate, that may have to change after the coronavirus. With the talent upgrade, retailers are likely to want to retain more skilled and knowledgeable workers by paying them higher wages, as the cost of recruiting and retraining new employees will continue to rise.
Many of us have wondered when life will return to normal. In this time of emotional and physical upheaval, the goal of retail workers should not be to go back to what was. Instead, learning to accept the uncertain and adapt to the changes that lie ahead is the only way forward in this time of great transformation.
Kathy Gersch is executive vice president of strategy execution and change management firm Kotter.
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