Barbra Kahn on Retail Remix
Share on linkedin
Share on twitter
Share on facebook
Share on reddit

Episode 19

COVID-19 vs. The Great Recession: Assessing The Retail Impact

Featuring: Barbara Kahn, Wharton School at the University of Pennsylvania

Barbara Kahn is the Patty and Jay H. Baker Professor of Marketing for the Wharton School at the University of Pennsylvania. Over the course of her career, Barbara has kept a close watch on the evolution of retail and key economic and social trends that are impacting it. In recent weeks, she has assessed the impact of COVID-19 in an effort to determine its impact in comparison to the Great Recession and the latest Retail Apocalypse. During this episode, Barbara and host Alicia Esposito dig into the macro and micro trends, including:

  • The acceleration of disruption;
  • The tension among department store retailers;
  • The future of luxury; and
  • Accelerated adoption of sustainability strategies.

RELATED LINKS

Did the customers expectation on
efficiency of purchasing those who never
shopped online have experienced it for
the first time those who did shop online
are shopping online more people are
saying precoded to post covert purchase
behavior they expect to see at least a
10% increase in e-commerce that does not
mean that everybody’s gonna buy online
and that’s the only way to sell but I do
think that it sets up a customer
expectation that has changed on
efficiency you’re listening to retail
remix you’re inside access to candid
conversations with the people shaping
retails future here’s your host Alisha
Esposito hey welcome to another week of
the pod for this week’s episode I
actually had a chance to sit down with
Barbara econ who is a professor of
marketing at the Wharton School at the
University of Pennsylvania so needless
to say she has a lot of experience not
just studying the industry but also
teaching the ins and outs of the
industry to others hoping to join it so
I wanted to get her take on not just
what’s happening now in the current
climate but how it really compares to
some of the other critical moments that
the industry has had to face and respond
to take for example the Great Recession
of 2008 and most recently the retail
apocalypse and she had a lot of great
perspectives as far as how Kovan 19 has
served as a accelerator for certain
trends and how brands and different
categories will have to adapt and
respond in light of the new developments
and new consumer trends and behaviors
and what trends may have to be fast
tracked as a result we talk about
everything from experience to store
structure to even sustainability so it’s
a very very detailed conversation for a
quick chat a lot of different layers so
regardless of what category you’re in
I’m positive that Barbara will have some
great insights
[Music]
Barbara thank you so much for taking the
time out to join me today looking
forward to talking all things retail and
honestly the new realities of Cova
Driscoll you really appreciate it yeah
it’s my pleasure to be here
so before we dig into the nitty-gritty
of what’s happening in our industry
let’s start with the basics a little bit
about you why don’t you share a little
bit about your role and the work you do
okay well I’m a marketing professor at
the Wharton School and I’ve been a
marketing professor for years and years
and years starting I think it was in
2011 I also ran a retail Center at the
Wharton School called the Baker
retailing Center and during those years
that I was running that Center from 2011
to 2017 was actually a very tumultuous
year a year set of years in retailing
and it culminated in the year when I
stepped down 2017 that was dubbed the
year of the retail apocalypse and so
Casa was running that retail center I
had a front seat view to everything that
was going on in transforming retail and
so when I sit down in 2017 for the next
six months or so I wrote a book which I
called the shopping revolution about
some of the really massive changes that
were going on in retail and so in 2018
2019
I was following everything I was going
on in retail and I was in a great
position to also begin to observe how
COBIT has changed retail from the
position of having been viewing retail
pretty closely for the last 10 years or
so yeah so you have definitely have a
lot of contacts not just folks like
myself who cover the space you know do
their research interview experts you you
really your days were spent and have
been spent really understanding the
dynamics the disruptions that are
shaping the industry and you see it from
several sides now so with the retail
apocalypse and now kovin 19 which a lot
of folks are referring to as a great
accelerator so although you know a lot
of the trends may not be a hundred
percent new its accelerating the
shift say to digital shifting
expectations or heightening expectations
and a lot of ways would love your take
on that use of the word accelerator is
that kind of in line with your
observations and your research are there
any interesting comparisons maybe
between you know what you’ve witnessed
in your past research to what’s
happening today
I actually think accelerator is a great
word to explain some of the processes
that have happening specifically with
regard to retail but these trends have
also happened in lots of other areas
like education travel hospitality so
you’re seeing a lot of parallel if even
in healthcare but yes for sure I think
accelerators the right word if I go back
to what I was looking at from 2017 2018
2019 you know before the famous 2020
year that we’re now in we were seeing
these trends what people were calling at
the time omni-channel retailing and they
were describing that as the seamless
integration between online and offline
retail where the data were being seen
from one point of view the point of view
of the customer and the retailer should
basically be agnostic to whether people
were buying online or offline it was
just one retail experience that trend
was happening for sure before coke had
happened and then when Koba did happen
and a lot of physical retail was shut
down the retailers who did not have that
integration between their online and
offline worlds were really at a definite
loss when the only selling that could be
done for a long time was online so that
was one trend that was definitely
accelerated the other kind of trend that
you’ll see as the stores open up is one
of the things I was noticing 2017 2018
2019
where the physical stores that people
were choosing to go into would be stores
in which they thought the customer
experience would be beneficial if it was
easier to buy online why would they go
into the store there had to be a reason
to go into the store so maybe it was to
touch and feel the product maybe it was
for the social interaction maybe it was
for entertainment reasons but there
to be a reason over and above the
convenience of buying online as the
stores are opening up now in coated now
there’s even a higher hurdle to get
people to come into the store because
now there are a lot of safety and trust
issues that are going on and there are a
lot of rules that people have to follow
before they’re allowed to go into the
store for some of these stores you have
to wait online before you’re gonna be
allowed into the store because there’s
only a certain number of people that
will be allowed in the store at one time
all of these put a higher hurdle on the
in-store customer experience to be
something that customers trust and find
value in before they’re gonna venture
into those stores so those just as an
example are two trends that I saw
happening before Kovan that coded
nineteen accelerated yeah and I think
those are great examples especially
around the obstacles to creating that
great customer experience I mean just
based on some of the other conversations
I’ve been having around what makes a
great customer experience right at a
fundamental level and you know a few
people have said it’s all about
identifying possible hurdles or bumps in
the experience and trying to smooth them
out whether that’s through you know the
power of human touch or through
technology or services so the fact that
this current situation is increasing the
size of those hurdles I think is
testament to the work that retailers
need to do and also maybe even widens
the gap between the haves and the
have-nots right like the retailers that
have always been doing it well and have
been able to pivot and adapt seamlessly
versus those that have always been a few
steps of head and in turn are are
struggling even more now because of that
acceleration so I love I love your take
around the longevity of retailers that
are gonna be able to come out of this
situation less affected or or even
successfully right because of their
ability to pivot do you think that the
ones that will come out on top sodas
we are gonna be the ones that already
have that strong omni-channel foundation
in place or do you think that we’re
going to see a few stories come out of
this of you know retailers that maybe
had their struggles and worked really
hard to write the ship so to speak so
you mentioned in your question there
were several different points so let me
parse it out and answer some of those
questions and pieces before I get to the
final big point of your question which
is will the haves make it and have-nots
not but before you got there you were
talking about what does customer
experience mean and you mentioned taking
away the bumps so the hurdles in the
customer experience and the way I think
of the customer experience is a little
broader than that so let me just look at
that first idea first great with in my
book the shopping revolution I have this
matrix I call the con matrix or
successful and exactly what its causes
and they just for successful retailers
or something like that and basically the
idea is when thinking about customer
experiences I think it’s broader than
just taking away the bumps I think
there’s actually two dimensions to it
that one dimension is give me a reason
to go into the store so make it worth my
while like make it more fun or more
social or more pleasurable so that’s a
positive give me a positive benefit for
going into the store what you are
referring to as well is the other side
of it which is take away the pain and I
call that frictionless so either make it
a positive experience or make it
frictionless so if you removed all the
pain points and I actually think that
you’re seeing retailers do one or the
other sometimes both but they have to be
the best at something to get people to
come into the store and so what Amazon
has been famous about on their online
experience but even in their physical
stores is just removing all the friction
all the pain points if you’ve ever been
in an Amazon go
you know you log in through your app you
walk into the store you just walk around
you take whatever you want and then you
just walk out there’s no pain points
there’s no standing in line to pay
there’s nothing that’s going on you want
in the information you can look it up
your phone it’s as easy as possible you
can run into an Amazon ghost or during
lunch and within 5 minutes get your food
and be out of there
that removes all the hurdles and all the
bumps in the experience and it makes it
a desirable store to go into on the
other hand the customer experience of
something like it before Kovan in Italy
or Sephora those were havens those were
playgrounds that people like to go into
those stores and be there because it was
fun you could experiment you could try
so both of those were reasons that
people had for going into the store and
increasing the customer experience so to
the first part of your question I think
the big takeaway just to make it simple
if you want to get people to come into
the store make it easier than anything
else or make it more fun or something
that they trust more than anything else
so backs point one number one then point
number two would be is there going to be
a difference between the haves and the
have-nots and yes we have seen going
back to your original question that
notion of an accelerator during the
really restricted part of retailing when
only essential retailing was allowed to
be open clearly the fact that Walmart
and Amazon offered opportunities of
essential retail or Target for that
matter and everybody else was closed
accelerated their advantage so it’s hard
to imagine a world going forward where
Amazon Walmart and Target where they
used to have incredible advantages don’t
in fact have even more advantages in the
future and I’ll add Costco to that group
so if you’re gonna talk about the real
haves so I would isolate those four as
the real has Amazon Walmart Target in
Costco and yes I think that they’re
gonna benefit to a greater degree and
other retailers would because of their
ability to be open when everybody else
had to be closed but does that mean two
things
does that mean the ones that weren’t
that has that I have nots don’t have a
chance and two this is not part of your
question but this is interesting to
think about it’s not only the big hat
that benefited your local grocery store
also benefited because it was essential
retail or the your local drugstore thing
or a local hardware store some of those
stores that were allowed to be opened
benefited from the restricted
environment on everybody else so another
question you might ask is will they be
able to retain their advantages in the
future so if we look at all sorts of
have-nots so ones that had to be closed
and now have to open in a new world the
ones that were open but were in a the
right place at the right time can they
control their advantages and the answer
is we’ll see you know but yes there is a
possibility if they focus on creating
customer value if they focus on taking
away the pain in the shopping process
there is a way for small businesses to
go forward and be successful in the
future but probably they’re going to
have to pivot and they’re not going to
be able to do just what they did in the
past and still win yeah I think those
are some fantastic points Barbara
especially I think across the board I’m
glad you brought up small businesses
though I think across the board we’re
gonna have to see a level up of the
customer experience because there’s been
this reset so to speak around how
consumers shop in and of itself but also
you know a few shake ups in terms of who
they decide to shop with I mean of
course due to closures like you said
just the situation itself may have
forced them to pivot their
decision-making process or the brands
they turn to so there’s a bit of a bit
of a new world of how do we re win the
customer if say they’re an existing
customer so it’ll be interesting to see
how this all shakes out but I do want to
dig into a few different verticals
within the retail world most notably I
think a lot of people have been thinking
about talking about the state of the
department store just given all the
shake ups that have been happening and
in a recent article appropriately called
from apocalypse to supernova how the
pandemic is changing US retail you said
a lot of people are talking about the
death of the department store I predict
the death of bad department stores
this kind of goes into you again the gap
between the folks that are really
emphasizing experience versus those who
have not so I mean in your own words
kind of break down what that difference
between the good department store versus
the bad department store what does that
mean in your mind what does that mean
from a customer experience standpoint
especially in context of the now right I
mean we’re kind of a new ground
altogether yeah well a bad department
store is one that doesn’t give the
customer a reason to go into the store
that’s just the very fundamental you
know if I don’t see any value and going
into that department store then I’m not
gonna go into that department store in
that department store won’t make it in
the future obviously so what does that
mean why won’t I go in well if I care
about price and I can get products
cheaper at Target or t.j.maxx why would
I go to the department store if I care
about having a good time we’re seeing
luxury products and I can get better
products somewhere else why would I go
into a department store that doesn’t
offer anything that’s better
departments or as many of them were just
really not responding to the changing
environment they would have frequent
sales which would make people not
believe that they were ever getting a
good deal unless they bought something
on sale they wouldn’t refresh their
inventory often enough they were
forecasting demand very poorly as the
situation got worse during the retail
apocalypse and they were worried about
their survival
they fired employees within the stores
and made the customer experience even
more frustrating and so they gave a
customer less and less reason to go into
that department store at all in
particular ones like Sears and JC
Penney’s were really floundering you
know there just wasn’t a good reason to
go into the store the product wasn’t
exciting the prices weren’t the best the
customer service was poor at best what’s
the reason to go into those stores and
then that same thing happened to Macy’s
a lot they were Macy’s had over the
years bought up all these really fun
regional and department stores that had
long long regional histories and they
turned them all into me
and a lot of people at the time we’re
very sad to see their old fat stores go
out of business and here there was a
Wanamaker’s that turned into a Macy’s
and some of these other Marshalls I
think or whatever the ones and I forget
what they were called in Chicago a lot
of the long legacy of regional dominance
was taken away and homogenized by Macy’s
and then it just made the department
store what I would call stuck in the
middle and neither offered a better
experience or a better price or any real
reason to come into the store and that
that’s very damning for the future the
other thing that a lot of department
stores did were they very slow to pick
up on this omni-channel trend so
historically the department stores
typically had their in-store experience
very separate from their online
experience and so they had very separate
legacy systems and it took them a long
time to merge that data and as a result
of that they were not it’s the right
place at the right time when
omni-channel retailing became the norm
the other thing that the department
stores opportunities that they missed
was they didn’t have very good loyalty
programs we know now that the very
sophisticated retailers have very
sophisticated data analytics and they
develop algorithms to optimize the
customer experience based on a lot of
data that they’ve collected over the
customer over a period of time they know
what customers want and they know what
customers don’t want and they can
personalize the experience for the
customer to be more fun or more
efficient but the loyalty programs at
these historic legacy department stores
work by nineteen and you’ll get the 20th
free or I’ll give you a discount or this
or that they weren’t really leveraging
all that information that they had about
the customer to give them a better
personalized experience so a lot of
these legacy department stores just
missed opportunities and when you get
into a very competitive world like the
retail apocalypse was forcing and now
COBIT 19 is is accelerating to use your
word again
can’t afford to not be doing the best to
compete against these very very smart
retailers like Walmart or Target or
Amazon so a lot of these department
stores I’d be surprised if they’re all
gonna make it I don’t know Macy’s is
very big and so they’ll be around for a
while and they have very good locations
and so perhaps they’ll stay JC Penney’s
and Sears have been on their last legs
for a very long time I think Nieman
filed for bankruptcy recently some of
the other ones that are more regional I
think are in big trouble so we’ll see
how many of those can make it some of
the more innovative ones I’m hopeful for
like I’m the big fan of Nordstrom and
Nordstrom’s has tried a lot of
interesting experiments some of them
have worked and some of them maybe not
as well but they keep trying new things
and they keep trying to maximize the
customer experience and delight the
customer and I’m very much in favor of
that yeah a lot of really great points
and I agree that Nordstrom has always
risen to the top like from a principled
standpoint that emphasis on the customer
always trying new things testing new
experience approaches new services
really stepping up their omni-channel
fulfillment offering so we’ll see how
everything kind of shakes out but I
agree norm kind of rises to the top in
terms of department store retailers that
are attempting to pivot and adapt but I
think you know that that breakdown of
what’s happening in the middle of the
the value range so to speak if we’re
looking at retail as a whole as you know
a sliding scale right department stores
are very much in the middle like you
said but let’s go to the other end of
the spectrum most notably that luxury
space because I feel like this is a very
interesting area to look into just based
on consumer sentiment consumer spending
patterns you know we see that side of
the data but then there is also you know
some signs of almost pent up demand so I
noticed that you know brands like Gucci
like they’re trying to digitize their
high-touch service by doing live
streaming I think I saw an article
recently
like with stores outside of or lines
outside of these luxury stores in China
one store started to reopen kind of
indicating that there’s this pent-up
demand or desire to go back into these
stores so would love love your take on
where you think the luxury category is
going as we look closely at the
reopening and recovery process again
because I feel like there are two very
very different sides to to this space
right now yeah I agree there are two
sides on one and suck in the middle is
not the good side on one side there’s
this emphasis on value good price and
then you’re seeing a lot of retailers
that are doing very well on that Costco
does well Walmart those are everyday low
price very good deals t.j.maxx the
treasure hunt kind of idea to get it
will be interesting TJ Maxx is a whole
other story we can talk about later
because they’re really doubling down on
their stores and their treasure hunt and
they’re not investing in the online so
that’s an interesting world but all of
those retailers historically have been
successful because they’ve offered low
price and low price will always be
attractive to some segments but on the
other side what you’re talking about
luxury and maybe more generally luxury
in particular and more generally some
really good brands like Nike I don’t
know if I would call Nike and Apple
necessarily luxury but they offer a very
good branded experience and luxury I
would call things like Louis Vuitton and
Gucci your Hermes it’s different than
just a strong brand but they both offer
something which is on the value side not
necessarily on the price side they offer
something that people just hunger for it
which is what you’re suggesting and I
completely agree people have been
talking for a long time about the death
of brands or the death of luxury and
luxury has been around for 300 years you
know there is something that luxury
offers that people really want if you
don’t have a lot of money now if you’re
in a tight economic situation maybe
you’ll just buy a little bit of luxury
like a Chanel let’s lipstick or burberry
scarf you know or something like that if
you can’t really afford to buy
everything luxury but people want a
little bit of special joy in their life
and people who can afford more want more
and I think there really will always be
a place for luxury but luxury is in a
difficult situation
after the recession in 2009 one of the
retail sectors that came back very
strongly and one of the first ones that
came back was luxury but a lot of that
came back because of a very strong China
market so the Chinese are very big
purchases of luxury around the world and
that market was strong even after the
recession in the United States and that
helps sustain luxury back at that time
in that economic recession now with the
pandemic China has some issues also so
it may not be able to bail out luxury as
well as it did in the past
but I agreed there still a hunger for
luxury and whether it comes back very
quickly or a little bit more slowly
I completely agree that luxury is here
to stay yeah and it’s definitely been
interesting to see the perception of
luxury among the different consumer
groups like I know Gucci is really big
with I think it’s consumers like 35 and
younger they make up a really large
share of their purchasing Group which is
a bit surprising and then on the other
end of the spectrum we’re seeing Chanel
increase the price of you know their
more notable designs because I almost
wonder if people are almost looking at
these items as investment so to your
point around brand equity and and value
people look at a Chanel bag you know a
Chanel classic chain bag as you know
something that they can pass down in
their family it’s more of like an
heirloom so it’ll definitely be
interesting to see that combination of
brand equity and like how our brand is
going to be innovating in light of these
new consumer behaviors that we’re all
trying to figure out right now well you
see that dimensionality and luxury
there’s some brands that are very much
fashion brands like Gucci is and there
the idea is to get the latest and the
greatest
and you want to buy Gucci or something
like that that’s luxury because you want
to stand out from the crowd you don’t
want to look like everybody else you do
want to have
that’s new and exciting and luxury can
offer you that the exclusivity and the
scarcity of it is very much what’s the
value of luxury in that case and those
fashion brands are turning around trying
to predict trends being the first one to
have the cool new luxury kind of thing
that’s one model the Chanel model as
you’re suggesting is classic and
traditional and there you want something
that will last for a long time like an
heirloom and that Texans value in that
sense because it’s always going to be in
style that bag that you were talking
about from Chanel and some of the other
classic fashion you know the little
black dress or whatever it is that’s
always in style that’s another advantage
of luxury you’re gonna get it because it
has very high quality it will last for a
long time and you can make that
investment but those are two different
reasons kind of divide the luxury
product yeah no I think that’s a good
point and I guess to add another layer
to the conversation because I do want to
get into this whole notion of
sustainability with you I felt like some
luxury brands more the earliest to move
in terms of rethinking the planning
cycle and you kind of talked about that
a little bit with departments towards
how you know the approach to inventory
planning an assortment planning has been
a bit flawed and you know we’ve always
been taking this seasonal approach we
know we’re you know companies are
starting to promote winter jackets in
the summer time so like everything is
kind of outside of the context of what
the consumer needs or is looking for in
that moment and we’re seeing luxury
brands be the first to move and say no
we’re not doing the traditional runway
shows we’re rethinking our planning
cycles we’re gonna go with the consumer
so I guess my question for you is do you
think that’s going to be a broader trend
that we’ll see
transcend through luxury and permeate
across retail as a whole or is there
still a lot of foundational rethinking
that needs to take place in retail for
us to get there yeah that’s a very
complicated question because well as you
are alluding to a lot of the luxury
market and the high-end fashion market
that fashion shows in the runways were
almost 18 months before
it’s gonna appear in the store and so
you would be buying things you know they
wouldn’t get to the store for a long
time you’d see things on the runway that
took a long time to get into the
ready-to-wear market and that’s what
Zarin took time there to reduce the time
from runway to store and that was a big
advantage that Sara’s did to get those
very in fashions into the stores much
more quickly but typically there’s a big
long cycle to get the fashion into the
store and it’s typically you’re buying
winter clothes in spring and you know
resort clothes and winter and all sorts
of the timing has been off so some of
the younger retail brands have suggested
just as you are saying to be more
customer focused and to put items in the
store or when customers want to wear it
and you can certainly imagine that would
be great from the customer point of view
because I would rather be shopping for
warm weather clothing when the weather
is in fact warm then trying to
anticipate what it would be like to feel
like I was warm when it’s freezing
outside
however this won’t work unless everybody
in the industry kind of agrees to do
that and there have been some holdouts
from what I understand Chanel did not
sign on to this there was like a some
kind of proposal that a lot of the
retailers and the young retailers in
particular signed to try to match more
closely when things were sold with the
season that they’re sold in and I don’t
believe that Chanel agree to that and
chanel of course is a very strong name
in the luxury fashion market so if they
don’t come aboard it’ll be interesting
to see what will happen with that
initiative some of the younger brands
can do it but we’ll see what will happen
on that then you bring up a whole other
issue which is the sustainability
initiatives and for sure we’re seeing a
huge trend particularly with younger
consumers like the gen Z and Millennials
who are really investing in
sustainability efforts and they totally
believe in it and they’ll put their
money where their mouth is and I think
that is more than a passing trend that
is going to be a change in the world and
people will more and more and more build
sustainability into their marketing and
until they’re offering it took a little
bit of a step back in kovat 19
because some of that notion of
reusability and trying to get rid of
excess packaging and things were kind of
abandoned and for health reasons so we
saw a little bit of a movement around
the sustainability issues when they
coincided with health concerns but that
aside I think the big trend of making
things more sustainable is something
we’re going to see continued into the
future now what does that mean like that
was some of the pushback against fast
fashion because the idea behind fast
fashion was dead something that wasn’t
that well made but that was very trendy
you’d wear it one or two times and then
kind of essentially throw it away that
is not a sustainable effort and so
you’re seeing some pushback against that
idea and some movement towards the idea
of buying classic items that last for a
longer time you don’t need to buy new
clothes every season you can wear them a
little bit longer that’s better for the
environment so there’s a lot of these
conflicting trends you know we’ll see
how they play out but I definitely agree
sustainability is something that people
care about that’s great and I think
another angle to that is the fulfillment
piece right I mean Amazon kind of set
the standard around crime next day to
day now same-day delivery and now we’re
seeing retailers tried to bolster their
offerings in order to you know reach
that high level but on the other hand
you know other end of the spectrum I’m
seeing some some rumblings among
consumers basically saying okay well do
we really need that right now so I think
it’s definitely an interesting conflict
of consumer expectations and preferences
because there are always going to be the
people that say hey I paid for Prime I
want that product as soon as possible
whereas others are almost thinking more
critically around not just their
purchase decisions in and of themselves
but you know do I want to do I want them
to pack this in a separate box and do I
want to rush this same day even though I
don’t necessarily need it so I feel like
all of these micro trends so to speak
come together under the sustainability
umbrella and
really really are changing things in a
way I mean we’ll see what kind of like
that long tail effect will be and have
sustainability can and will come to the
forefront over the coming months or a
year but I do think you know there’s a
lot of potential there so hopefully
it’ll rise to the top in the retail
boardroom right I guess it’s a whole
different layer to the conversation yeah
I mean the sustainability angle is one
aspect of the delivery you’re talking
about whether you deliver you know more
efficiently a sustainability is one
piece of that but another really big
piece of that is the cost structure of
it the problem with that last mile is
it’s very expensive and if we move more
to this delivery model that is gonna put
a lot of retailers out of the business
because they just can’t be profitable
like that so what they are trying to do
is to move people to be a little bit
more reasonable about their delivery
options and to bear some of the cost one
of the very successful initiatives and
Walmart’s done a really good job on this
and I think a lot of other retailers are
trying to do this too is buy online pick
up in the store kind of idea and so that
you do the last mile delivery yourself
and that will reduce some of the costs
in that bumpy delivery process that
you’re talking about so I think that the
delivery process and today one day
whatever it is is part a sustainability
initiative but very much a cost
initiative – and you can just take all
the profitability out of retail if you
don’t solve that problem like for
example from what I understand say with
restaurants when they get their products
delivered to the home they basically
make no money because the delivery
service takes a cut added that the
margins aren’t that high-end restaurant
to start with they’re just not going to
be in business if they have to keep
doing that kind of stuff so we are gonna
have to rethink that whole delivery
model in a way that makes it more
efficient yep absolutely and I guess you
know curbside kind of helps like you
said kind of eliminate the pain of that
last mile and then allows a customer to
fulfill it in a certain way so the
retailer does have to worry about you
know managing those costs and making
sure the product is getting to them
quickly and efficiently and effectively
for the business in and of itself this
has been fascinating opera and I know
we’ve peeled back a lot of layers too
you know this overall big picture of
what’s happening in the retail landscape
now so thank you so much for you know
walking through all of this with me
today but I think to close out our
conversation you know if we’re looking
at this new reality right everyone’s
saying the new reality the new normal
the next normal whatever whatever it is
I would love you to kind of close out
with where you think the customer is
going like if you were to kind of paint
a picture as far as you know how their
behaviors are going to change in the
long term and what retailers really need
to do to kind of set their plan in place
do you have any closing thoughts or
recommendations for the folks listening
you know the retail executives that are
trying to navigate all of this change
and really set their business up for
success well to go back to something we
said at the beginning you know use the
term accelerator I do think that kovat
has accelerated the customers
expectation on efficiency of purchasing
those who never shopped online have
experienced it for the first time those
who did shop online are shopping online
more people are saying pre kovat to post
kovat purchase behavior they expect to
see at least a 10% increase in
e-commerce that does not mean that
everybody’s gonna buy online and that’s
the only way to sell but I do think that
it sets up a customer expectation that
has changed on efficiency so I think
people will have little tolerance now
for inefficient purchase processes where
you have to sign a bunch of different
things and wait on the long line to buy
something we’re gonna go much faster to
these very fast efficient payment
processes they were already in place in
China they were way ahead of us on that
dimension and I think you’re going to
see an accelerated consumer demand for
those kinds of things so I think there’s
like two trends on one hand customers
just value efficiency they value
painless shopping they don’t want to
worry about stuff that they buy all the
time and the expectations for that will
be much higher and you just can’t clunk
along as a retailer and be inefficient
and keep your customers that won’t work
but on the other hand we also now all
have cabin fever and we’re tired of
being inside and we want the fun of
shopping and many of us love to shop
just for the fun of shopping and so the
idea that we’ll get to go back into
stores and play around and touch and
feel products someday we’ll get to do
that again and experience social
interaction and fun in the stores I
think that will be very much something
people belong for but they won’t put up
with boring not safe environments so
you’re going to have to have fun clean
efficient safe retail environments that
attract consumers into your stores so I
just think that kovat has accelerated
both ends of it efficiency and fun and
if you can do one or the other you will
attract the consumers of the future love
it Barbara thanks again so much for
taking the time out again just given
your depth of research and understanding
between your book and your day to day
work this is really an insightful
conversation I think especially in
context of just the bigger picture of
all the change our industry has
experienced and how Cova 19 has really
accelerated some of these new realities
for our listeners so thank you again so
much for breaking it all down for us and
for sharing some great tips and best
practices on the way I really appreciate
it sure my pleasure it was fun talking
with you likewise and thanks everyone
out there for listening as always if you
have any feedback for us on this or any
other episode of retail remix feel free
to reach out to us on social media and
of course subscribe you’ll be able to
get updates whenever new episodes are
available thanks again everyone for
joining us and we’ll see you next week
thanks for listening to this episode of
retail remix be sure to subscribe so you
never miss an episode you can find us on
your favorite podcast player until next
time you mixing it up

Subscribe:

Advertisement

Retail Remix

The rules of retail are constantly changing. Today, we're in an exciting new era where brands can differentiate through experience and use technology to connect with customers in new and exciting ways. Retail Remix is a new podcast series brought to you by Retail TouchPoints, the industry's leading source for news, insights and research for all things customer experience. Bi-monthly, we sit down with someone who is helping put a new spin on the retail experience. Hear from the top practitioners, analysts and innovators in retail, and see what new engagement opportunities await.

Access The Media Kit

Interests:

Access Our Editorial Calendar




If you are downloading this on behalf of a client, please provide the company name and website information below: