Retailers must adapt to a new breed of “citizen shoppers” who desire the flexibility of omnichannel shopping, but also expect retailers to stand for something.
During its June 9 virtual “State of Retail & the Consumer” event, the National Retail Federation (NRF) hosted a panel of C-level retail executives and a panel of expert consultants to discuss current consumer expectations and how the COVID-19 pandemic has changed the retail environment. Both panels agreed that a strong omnichannel offering and a brand identity aligned with shopper beliefs and values are vitally important to retail success, now and moving forward.
Jean-André Rougeot, president and CEO, Sephora Americas, said while forced U.S. store closures for the first seven months of the pandemic negatively impacted sales, a concurrent explosion in its e-commerce business helped make up for it.
“We did close to $3 billion in online sales in North America during 2020,” said Rougeot. “The big surprise for us has been as stores are reopening, online sales remain extremely high. We also have had a significant pickup in-store sales; for several weeks they were higher than in 2019. Store traffic is still below 2019 levels, especially in urban areas.”
Vivak Sankaran, president and CEO, Albertsons Companies, said consumer product preferences are not the same as they were pre-pandemic.
“I’m not sure how much of this is due to the pandemic and how much is due to the fact consumers are generally healthy now, but there is increased focus on quality of product,” said Sankaran. “Fresher produce, better wines and cuts of meat. Now they’ve had the convenience of online shopping and enjoyed the experience, they are coming back to the store expecting omnichannel.”
Javier Quiñones, president and chief sustainability officer, Ikea U.S., said consumer preferences have shifted a few times during the course of the pandemic.
“At the start of the pandemic, shopping was needs-driven,” said Quinones. “Customers were working from home and adapting to a new situation. Their homes were not adapted. In the second phase, home projects that had been delayed, like painting and even remodeling, started happening. That morphed into consumers shopping to fill emotional needs, as consumers who couldn’t go out or interact as they used to tried connecting in a different way. For example, I tried being a chef – with no success.”
All three retail executives agreed that it is crucial for retailers to make public efforts to work toward racial and social justice, as well as environmental sustainability. Rougeot, who said Sephora recently ran its first U.S. accelerator for Black-owned brands, described the company’s efforts to combat unconscious bias in its stores.
“We want everyone to feel welcome in our stores, regardless of individual skin tone, race, or sexual orientation,” he stated. “It’s a big mountain to climb, but makes us more successful. We need to talk to the diverse set of U.S. consumers and reflect that wealth of differences.”
During the consultant panel discussion, Rachel Bonsignore, VP of market research firm GfK, said retailers need to meet consumer desire for them to take a stand on social and environmental issues, but be prepared for a complex situation.
“Customers want brands to take a stand and speak up, but there is not unanimity in their view on issues,” said Bonsignore. “Taking a stand can be complicated and challenging.”
“You can’t be one size fits all,” agreed Karen Benway, consumer market leader, east region, Ernst & Young LLP. Regardless of stance on issues, Benway said all retailers should ensure they accomplish one key task.
“Enrich your customers’ lives and demonstrate how you are doing that,” she recommended.