With #Covid19 closing everything around us, we're all either in a lock down or panic mode. In the NY metro area, everything has been closed. My daughter is home from college for the rest of the semester and everyone is trying to figure out how long this will last. Lauren Thomas, writing about the industry at CNBC, had an article indicating that retail closures could top 15,000 this year. On top of everything that's happened in previous years, I'm sure this was not the year retailers wanted.
Here at the Lab, we've been talking about the importance of creating authentic, relevant and compelling brand experiences for quite some time. What will physical stores need to do post #COVID19 to bring shoppers back in? We're currently dealing with the global shutdown these days, with almost every country having some sort of shutdown in place. We're looking at the possibilities with members of our team and will talk about them in part two of this piece.
There was some looming good news for retailers. Most studies point to the fact that Gen Z loves to shop in store. According to a study by A.T. Kearny last fall, 81% if Gen Z like to buy in-store and 73% of Gen Z like to discover new products in store.
But, their newfound desire to come into stores creates challenges for many traditional retailers. They are brand promiscuous, shopping for good deals and good service. As my daughter wrote a few years back, they are also looking for experiences, both in terms of what they’re buying and how they’re buying. She concluded:
Gen Z has the world at their fingertips and won't hesitate to change shopping patterns if a brand does not support their interests. With a few Google searches, we can find out whether or not a brand uses child labor, their pollution levels, and anything else we might be interested in. Brands need to consider their brand morality and the unique experiences they offer if they want to keep us as consumers. How can their products create experiences that transform me and the world around me? Yes, Adidas is still selling me a shoe, but the experience they created around that shoe gives me a reason to buy them over other sneaker brands, even if they cost more.
Echoing her thoughts, a study by ubimo, they stated:
Gen Z still shops online, but they’re being increasingly driven to physical storefronts by their desire for personalization in shopping, preference for experiencing products, and an expectation that brands engage with them in a meaningful, authentic way. They also want to know what they’re buying before they shell out — just shy of two thirds of Gen Zers want to touch, feel, and experience products before making a purchase.
But #Covid19 is putting a huge hold on all of this optimism. As I write this, the market is down almost 2,000 points (it was down 2,700 at one point) and the CDC here in the States is recommending no crowds bigger than 50 people for at least the next two months. The vast majority of people are now working from home - my commute has been almost empty the last few days. Grocery stores have been cleaned out. Curfews have closed restaurants all around me and, if they're still open, they are for take out only. Hourly workers are not spending money as they're afraid they won't have an income for the next few weeks. That is likely to trigger a recession, even a brief one, which will further slow spending.
Check out part 2 to see what we and others are thinking we need to do when this is all over!