The great American closing was straightforward. Stores, restaurants, and the bulk of the economy switched to sleep mode; waking up will be a different matter. The shape of this phase of post-Covid retail is now unfolding. Other countries are well into the reopening and offer us models to consider. Additionally, innovators, driven by opportunity and a problem-solving culture have been rushing potential solutions to market. And finally, for VR, an existing technology that has been awaiting wide-spread adoption, the moment may have arrived.
Twelve Weeks Since China’s Retail Reopening
China was first with the virus, the shutdown and now the economic recuperation. The China model of a regional reopening scheme based on health data can be a model for a retail re-emergence in the West. Having said that, the virus is a tricky customer, and parts of northeast China are again in lockdown.
Shanghai was resuming economic activity just as the United States was shutting down. BOF reported, “As shops shut their doors across Europe and the United States, in China the sharp drop in new coronavirus cases has encouraged consumers to venture back into malls and restaurants — for the most part quite gingerly but occasionally in throngs.” I Zoomed (on background) with an executive for a global luxury brand based in Shanghai about the recovery there. She said that by early April around 70 percent of Shanghai retail, restaurant, and luxury businesses had reopened. The extreme efficiency of e-commerce in China made getting people back into stores challenging.
While the desire to resume a normal life appears universal, we know things won’t be the same; creative technologists are racing to get solutions to market.
Brands and malls held marketing events deploying KOL’s (key opinion leaders) in physical retail spaces, holding live events, and encouraging people to go O2O (online to offline). In her opinion, everything is pretty much back to normal. Every individual must wear a mask and all transactions are touchless, but people are out and shopping with social distancing relaxing in malls and restaurants. By her estimate, foot traffic is down in stores by around 50 percent, but basket size is up; sales are only slightly off target. She is looking to June for a full recovery.
In Beijing, pop-up collaborations seem to be a draw for consumers. Jing Daily reported: “SKP Beijing is hosting pop-up stores that will bring in brands that are extremely rare in mainland China as well as limited-edition collaborations that will only be available at the physical stores. It’s no wonder malls are seeing long lines outside their stores for many of these reopenings.”
Germany Carefully Enters Phase 2
Germany has successfully battled the virus and began opening small retail stores on April 20. All stores regardless of size opened on May 11. I had an exchange with a retail executive based in Dusseldorf (also on background) to gauge his reaction. He has not been in a store for nonessentials since the shutdown began. He estimates that e-commerce has likely doubled during the retail shutdown. He stressed that Germany has had a robust shopping culture, but one that is more “High Street” with fewer malls and retail-infused lifestyle centers that one finds in the U.S. and many Asian countries. While the stores may be open, he said that Germans were still “skittish” about shopping at the moment. He believes that in June attitudes could shift.
The Lonestar State
Stateside, retail is resurfacing in a few states. In Texas, retailers and malls with 25 percent capacity limitations opened on May 1. I looked at news footage of customers lining up (no social distancing) to enter the NorthPark Mall, a privately owned, popular mall in Dallas. I emailed Jorie Wages, a millennial and small business owner in Dallas for her perspective. She said that malls are not her preferred shopping venue; she favors small, local retail. She has been buying summer clothes for her children online but is looking forward to shopping in-store. She noted that in shopping online for her child “normally we would try on five bathing suits, three would be cute and I’d buy at least two plus maybe a top or shorts. With the retail to go, they just got my one purchase which was due to necessity. She added, “I haven’t rushed out to get myself anything because I really don’t need it now, but I’d be comfortable going into a store to shop.”
Observations from the Road
I took an essential road trip this past weekend across a few state lines and was hoping for a glimpse of a retail awakening — but in New York, New Jersey, Pennsylvania, and Ohio nonessential retailers remained closed. My retail observations were primarily limited to counting the Amazon and Walmart trucks barreling down Interstate 80. I stepped into a Walmart in Ohio and if that episode hints at the post-Covid customer experience, it is indistinguishable from any other trip to a Walmart I have had in my life (full disclosure, I’m a New Yorker and there are no Walmarts in the city). The only differences I noted were bare shelves where cleaning products should be, and a few people wearing masks, mostly pulled down around their necks. The motivation behind this lax approach to social distancing and mask-norms mimics observations of a similar mood in Shanghai after a few months of restrictions. BOF reported “In cities like Shanghai, which recorded a relatively low number of cases of Covid-19 (with hundreds, rather than thousands of infections and only a handful of fatalities), people feel ready to get out of their house and resume their life again.
While the desire to resume a normal life appears universal, we know things won’t be the same, at least until we have this under control, and a vaccine is widely available. Until then, businesses and retailers are well-advised to blend health and safety efforts into both immediate and short-term planning. Creative technologists are racing to get solutions to market.
- IBM directed its 2020 Call for Code Challenge to focus on solutions for the Covid-19 crisis. Of the top three winning solutions, one is designed to serve a pressing need for retail. Fast Company highlighted the app SafeQueue, “Instead of waiting in the long lines that stretch around your local grocery store during the pandemic—and hoping that the somewhat arbitrary six-foot rule for social distancing protects you from the customer coughing behind you—it may soon be easier to wait in a virtual line. A new app, SafeQueue is designed to allow stores to manage the flow of customers digitally, so that customers can wait inside their cars or in a nearby park until it’s time to shop”.
- For stores reopening, a capacity control system, PeopleCount, has been designed by Philips. Both Footlocker and H&M are deploying the system. FC reports, “The system has a few key parts: a camera that tallies how many people enter and screens near the entrances that display real-time messaging such as capacity, number of people inside, and wait time. (The screen can also display promotional messaging—these are businesses, after all.) The displays can make audio announcements or use a traffic light-style system to communicate with customers. Once the screen indicates the store is at capacity, shoppers will have to wait in a line outside until somebody leaves and it’s safe to enter. The system can also connect to automatic doors, so they only open when there’s space for more people to go inside, without needing an employee to monitor the situation… Of course, people counters aren’t new, but sharing that information publicly in order to direct consumer behavior is.”
- Thermal checks and imaging have been widely implemented in China and the country is placing temperature taking infrared cameras in public places. The UK’s Sky News reported on the development in China of glasses fitted with infrared and a camera which claim to be able to measure people’s temperature. In the U.S., Soter Technologies is selling a hybrid metal detector/health screener called SymptomSense. The company claims it monitors temperature, respiration rate, heart rate, and blood oxygen levels. These innovations may keep us alive, but will they kill the joy of shopping in a physical store?
Will We Ever Get Used to It?
In the near future, we may acclimate to essential health and safety measures, or they may become overbearing. If we don’t want our temperatures and oxygen levels checked in exchange for a shopping fix, the much-hyped, but never-fully-optimized-for-retail technology of VR may find a useful place in our marketing. Virtual reality headsets have finally found a place in many U.S. households. The introduction of the Oculus Quest (fitted with less cumbersome goggles and a wireless interface), stay-at-home measures, bored teenagers, and the release of a wildly popular VR game titled Half-Life: Alyx created a surge in demand. Just like toilet paper, and Clorox wipes, the Oculus Quest has sold out from coast to coast.
For me, if a retailer I used to frequent in-store takes the VR cue and designs and religiously updates a robust VR store experience, I can imagine taking a customized shopping journey, browsing the latest items, trying them on using my pre-scanned body image in 3D, and clicking. It could be an optimal omni retail experience, blending in-store and online. If my pulse starts rising during the process, it is just a dopamine reaction to shopping again, and that little health detail will remain my secret.