7,643 stores have already shuttered their doors in 2020, with projections nearing 25,000 by year’s end due to COVID-19 fallout. Businesses are facing one of the most depressed retail environments in recent history. As a result, brands are left with a paradox: Make up for tremendous brick-and-mortar losses while simultaneously maintaining brand equity on a shrunken budget.
Store closure data showcases the retail winners and losers. Those suffering are legacy retailers that rely on in-store activity, many of whom were struggling pre-pandemic.
Conversely, D2C brands and true omnichannel players are surviving, in part thanks to early investment in ecommerce. Digitally mature brands across categories have tempered their losses.
As ecommerce dominates COVID-recovery, brands are left considering: How long will society remain upended? Are these new consumer behaviors permanent?
Even as some retail spending rebounds, those reticent to adopt ecommerce should use 2020 and 2021 to develop a meaningful ecommerce strategy. Here are some key points to consider as you plan:
Amplify your digital storefronts. Physical stores inherently drive top-of-mind presence. The closure of physical storefronts should directly translate to the amplification of digital ones.As points of sale proliferate, don’t limit commerce to .com, but address how you can take “headless commerce” from buzzword to reality in areas like social commerce. The multiplication of commerce touchpoints is critical, as is considering more diverse purchase and payment models like rental, subscription, and layaway.
Unlock future growth with reinvestment Reinvest rent, taxes, and SG&A savings from store closures to the digital experience and sharpen the in-store experiences for remaining physical locations.
D2C brands should identify and rectify weaknesses in their tech stack with a hyper-focus on digital scalability. With niche retail experiences such as pop-ups and events temporarily removed, finding alternate ways to scale offline is paramount to longevity.
Omnichannel retailers should focus on decreasing friction for their vendors to create, optimize, and syndicate content on their properties — creating opportunities to bring brand voices online.
Review your supply chain and distribution. With volume transitioning to ecommerce, look for ways to mitigate against repacking by building processes around single item pick and pack, ecommerce pack/bundle sizes, and online friendly packaging.
Litho in-store packaging is a non-factor for the online consumer, and long-term cost savings can come in the form of easy-to-open, brown-box, online packaging. Further, thoroughly analyze any geographical voids created by store closures, and ensure you have the warehouse footprint to service the geographies that relied most on physical presence. In the short term, 3PL and 4PL logistics models can help bridge the gap while longer term solutions are built out.
Prioritize your efforts. There’s no shortage of actions to take as you grow in your digital journey, but in this particularly volatile climate, it’s important to set ambitions on a clear timeline. An overly ambitious plan or one only focused on the here and now will ultimately fail in the long run.
COVID-19 wasn’t a change agent, but an accelerant of digital adoption. This pandemic serves as a catalyst for evolving the already non-linear and complex consumer journey. Ecommerce will continue to grow and shape the way consumers are inspired, and the way they purchase.