Retailers are rapidly adapting to pandemic-related shifts in consumer behavior.
As the COVID-19 crisis drags on, its impact on how customers shop becomes more pronounced. With the utility of physical stores limited by legal restrictions, social distancing, and consumer reluctance to visit, retailers are turning to digital technologies and strategies to weather the pandemic. Here are three notable trends.
3,2,1 – no contact
Contactless shopping, where customers complete entire purchases while avoiding contact with human associates or physical hardware, was already on the rise prior to the COVID-19 outbreak. However, since the start of the pandemic in mid-March, a slew of casual dining, grocery and convenience retailers have introduced contactless delivery services.
These enable customers to place and pay for their delivery order online and then receive electronic notification when it is dropped off at their door or lobby by the driver. Major third-party delivery platforms are also offering contactless delivery.
And more retailers have also started offering in-store contactless shopping since the pandemic began, to help customers socially distance and generally feel at ease while visiting a brick-and-mortar store. Contactless shopping also helps eliminate the time customers spend in queues, a valuable benefit as many states and localities are placing strict limits on store hours and how many people can be in a store at one time.
Grocers and restaurants blend
The grocery and fast casual verticals have been merging in recent years, with many supermarkets offering full prepared meals and restaurants selling meal kits and packaged food items. But this trend has dramatically escalated as COVID-19 restrictions have limited or eliminated dine-in service and smaller grocery chains are watching larger supermarket conglomerates, as well as major players in the discount, warehouse club and e-commerce spaces, steal their market share.
A number of fast casual chains are now selling ingredients from their supply chains as on-demand grocery items. Denny’s, McDonald’s Australia, Subway, and Panera are all recapturing some of the dine-in sales lost to COVID-19 restrictions and avoiding wasted inventory with this strategy.
Meanwhile, regional grocers Hy-Vee and H-E-B have both introduced on-demand pickup and delivery of fast-casual prepared meals. Although H-E-B is currently offering ready-made meals from restaurant partners as a way to provide COVID-19 relief to the restaurants, the retailer could continue the program at profit when the pandemic ends.
As the COVID-19 pandemic continues, you could argue that brick-and-mortar retail is essentially being split into two broad verticals – the open and the closed. This will likely lead to more non-intuitive, but smart, omnichannel partnerships like the one recently launched by Hy-Vee and Designer Brands Inc., parent of DSW Designer Shoe Warehouse and other banners.
Designer Brands is teaming up with Hy-Vee, which operates over 265 grocery stores across eight Midwestern states, in a multi-stage pilot that starts with making DSW product available on Hy-Vee’s website. DSW and Hy-Vee are also developing buy-online-pick-up in-store (BOPIS) capabilities which will roll out in several DSW in-store shops in Hy-Vee locations.
In addition, the companies will launch a pilot of top-selling family footwear displayed in a pallet format in more than 120 Hy-Vee stores. The partnership is moving forward as Designer Brands’ nearly 1,000 locations remain closed indefinitely due to the pandemic.