Soon, it’ll be easier to travel, move around our cities more easily, dine in restaurants, go out to bars, concerts, and movies, and of course, shop at local stores and malls with abandon. All this freedom and exuberance will result in a wave of spending like we saw during the Roaring Twenties, according to some industry experts.
A WWD article points out that during the pandemic there have been fewer places to spend money. So, people who were able to keep their jobs are now sitting on savings, have a pent-up desire to spend, and this translates to treating themselves to a little revenge spending, like what we saw in China in the spring/summer of last year as they emerged from lockdowns.
Still, I wouldn’t recommend retailers bet their 2021 revenues on hordes of revenge-spending shoppers showing up with cash in hand, dropping money on everything in sight this summer/fall. We do expect to see a «pandemic bounce» in traffic and retail sales. However, we also expect those sales to be tempered regionally and to level off quickly.
At the time of this writing, 18 states are fully open with no restrictions while the remainder has some mix of mask mandates and capacity limits. An uneven opening process managed by individual states and differing regional attitudes means retail sales results vary greatly state-by-state, depressing growth nationally.
Also impacting spending is the fact that unemployment is still twice what it was before the pandemic (6.2% vs 3.5%, respectively).
With vaccinations rolling out, more states easing or removing restrictions, and stimulus checks going out, April and May could be record months for retail sales growth. We see signs of this already. For example, in Texas, which is fully open with no restrictions, business executives responding to the Texas Retail Outlook Survey reported that the sales index, a key measure of state retail activity, rose from -0.1 in February to 19.6 in March, its highest level since last fall.
However, with COVID variants like B117 becoming increasingly prevalent in the UK and Germany tamping down sales for global retailers and an inevitable spread to the US, an extended return to normalcy is not guaranteed. As a result, retailers need to be prepared to take advantage of the bump in activity and spending. Here are our top recommendations for making the most of the pandemic bounce.
Optimize your digital-to-physical shopping journeys
Many consumers will love getting back into nearby physical stores. But after a year of pandemic shopping, many will find it a shock. Being back in crowded stores, surrounded by strangers, and dealing with wait times for a dressing room or at the register will leave many wondering what the attraction was in the first place.
In a Brandwatch query for March 2021, we found 64% of comments on mall traffic to have negative sentiment associated with them. Most focused on either anxiety or the inconvenience of physical shopping. So, as you prepare your stores to welcome back customers, don’t forget about those who may come one time only and then revert to digital-to-physical shopping behaviors. Ensuring they have a great curbside or buy online pick-up in-store experience will make it more likely they will come back again.
Collect customer information at every touchpoint
Customers have permanently adopted digital touchpoints as part of their shopping journey. This is great but how retailers find and target those customers is about to change dramatically. Recently announced privacy changes at Google and Apple that remove access to third-party cookies data means retailers will be more reliant on forming direct relationships with their customers. As store traffic picks ups, retailers should increase efforts around email and SMS data capture. This will enable them to stay in contact, invite them into loyalty programs, and mine the data to attract other customers with similar attributes.
Innovate the in-store experience
A year of dealing with the pandemic has altered shoppers’ perspectives on in-store shopping experiences. This is an ideal time to reimagine it – to innovate what it could be going forward. Retailers have a unique opportunity to take the best ideas from the pandemic like one-on-one appointments, curbside pickup, or virtual shopping and reimagine them for the post-pandemic world. Now is the time to play with ideas like weekly live broadcasts on a website or creating branded curbside experiences and set new consumer expectations. Even things as simple as pandemic-driven adoption and use of QR codes presents opportunities for interacting with customers in new ways.
Our best advice is to connect with customers, find out how they want to engage with you, and personalize the experience to meet those needs. The more retailers focus on these efforts, the better chance they have to keep customers through the fits and starts we’ll see over the coming months.
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